HAYNES INTERNATIONAL INC (Form: DEF 14A, Received: 01/21/2022 16:17:54)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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Haynes International, Inc.

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January 21, 2022

To My Fellow Stockholders,

Fiscal 2021 was an unprecedented year for Haynes. We began the year experiencing the full impact of the COVID-19 pandemic on our business, but concluded fiscal 2021 with significantly improved performance and a team focused on building on our successes and unlocking the potential of our company. I’m very proud of how our employees worked together to overcome the obstacles faced over this past year and to achieve our fiscal 2021 goals related to cash generation, improving our gross margins, reducing our breakeven volume and improving our safety processes and performance.

As we look back on fiscal year 2021, we not only effectively handled the ongoing impact of the pandemic, but we also fundamentally and significantly improved our business in many areas. Our team improved our safety processes, increased base pricing, reduced variable costs of manufacturing, implemented numerous ESG initiatives, became profitable well below previous breakeven points and continued to enhance our product and service differentiators. This transformation of the business operations, combined with the significant positive effect of our newly developed capital allocation strategy on our balance sheet, has resulted in a truly different company. We are now a company with impressive earnings potential and a strong transformed balance sheet, both of which provide a foundation for growth and continued value creation for our shareholders.

Haynes’ core strengths and key competitive advantages include inventing new alloys, providing outstanding technical and commercial service to our customers and developing new applications for our alloys. We believe our culture of innovation is our greatest strength and our competitive advantage. While we are not one of the large companies in our industry, I believe we are the industry leader in innovation. We continue to work closely with our end-users to help them find innovative solutions to their demanding needs.

In the aerospace market, two of our proprietary alloys are already specified into engines for the more fuel efficient Airbus and Boeing aircraft, and a third, our brand new HAYNES® 233™ alloy, is in the advanced stages of testing. We also have our proprietary alloys specified into the most advanced and efficient industrial gas turbines used for power generation. In addition, Haynes alloys are used in a wide array of diverse applications in chemical processing that require advanced materials, including the processing of fertilizers used in food production to feed the world’s growing population or acetic acid plants that produce the building block component for adhesives, paints and other industrial applications. In addition, our highly specialized alloys are used or are being considered for producing “green/clean energy” to protect the environment for our children and generations beyond.

As fiscal year 2021 progressed, we were successful in achieving many of our goals, including a return to quarterly profitability. Quantifying our fiscal year 2021 improvements:

•

We have continued our focus on our most important goal, which is protecting our employees. Our calendar year 2021 OSHA recordable rate dropped approximately 25% from our calendar year 2020 level;

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We generated $40.2 million in operating cash flow during the first nine months of the fiscal year and used that cash for a capital allocation strategy to increase the value of the business. The strategy included: continued commitment to funding our regular quarterly dividend; funding growth in our work-in-process inventory as order entry improved; repurchasing our stock in an open-market repurchase program; and investing in our U.S. pension assets as we worked to reduce what was the largest liability on our balance sheet;

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We reduced our U.S. pension net liability by $79.1 million from approximately $105.2 million to approximately $26.1 million over fiscal 2021 due to favorable market conditions combined with total

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company plan contributions of $21.0 million. In addition, our retiree medical liability was reduced by $10.4 million, and our U.K. pension liability improved by $3.0 million. All of the pension activities combined resulted in a net liability improvement of $92.5 million, an impactful value-creating balance sheet transformation;

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We finished the year with strong liquidity, an untapped credit facility and $47.7 million in cash on our balance sheet, which leaves sufficient capacity to fund the currently expected growth in the aerospace market;

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We improved our fourth quarter gross margin percentage by 1,260 basis points year-on-year, with a gross margin of 17.5% in the fourth quarter of fiscal 2021, compared to 4.9% in the fourth quarter of fiscal 2020. This was driven by volume increases as well as by our team’s relentless focus on both increased pricing to capture the value of the alloys, products and service we provide, and reduced variable costs of manufacturing;

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Based on the profits generated in both the third and fourth quarters of fiscal year 2021, we lowered our breakeven point, given the current mix of products, by an estimated 25%;

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Our backlog increased by 14.4% in fiscal 2021, driven by a 16.2% increase in the fourth quarter. We believe that, in fiscal 2022, our three core markets of aerospace, chemical processing and industrial gas turbines will be experiencing positive growth rates at the same time, which could accelerate our overall growth rate;

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Our ESG focus continues, with our latest milestone being the approval of a $1.8 million solar field installation in our Mountain Home, North Carolina wire facility. This new 1MW array is expected to generate half of that facility’s energy needs; and

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Finally, in the fourth quarter, as the fiscal year came to an end, we began to see the initial signs of a recovery in our aerospace market. Fourth quarter revenue from the aerospace market was up almost 15% sequentially and 16% year-on-year. We believe these numbers represent the beginning of the return of our largest market, however much more is expected. Aerospace volumes in fiscal 2021 were 31% below volumes of fiscal year 2020 and nearly 52% below volumes of fiscal 2019. Published build rates of single aisle aircraft show significant growth expected in fiscal year 2022 and generally a return to 2019 levels in fiscal year 2023.

We are a company prepared to continue to improve and strive to be best-in-class with our products, services and financial performance. The efforts of the Haynes team have changed the future of our company.

Finally, our sincere thank you to our shareholders. We look forward to showing our shareholders what Haynes is capable of achieving through our actions and increasingly favorable results in fiscal 2022.

Sincerely,

Michael L. Shor
President and Chief Executive Officer

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January 21, 2022

Dear Stockholders of Haynes International, Inc.:

You are cordially invited to attend the Annual Meeting of Stockholders of Haynes International, Inc. (“Haynes”) to be held Tuesday, February 22, 2022 at 10:00 a.m. (EST). As a result of continuing uncertainty around the COVID-19 pandemic and its variants, this year’s annual meeting will be a virtual meeting of stockholders. You may attend the meeting online, including submitting questions at www.virtualshareholdermeeting.com/HAYN2022 when you enter your 16 digit control number included with the proxy card. Instructions on how to attend and participate in the Annual Meeting via the webcast are posted at www.virtualshareholdermeeting.com/HAYN2022. You will be able to vote your shares while attending the Annual Meeting by following the instructions on the website.

Prior to the date of the virtual annual meeting, you will be able to vote at www.proxyvote.com or by telephone as described in the accompanying Notice of Annual Meeting. The proposals to be voted upon are described in the accompanying Notice of Annual Meeting and Proxy Statement. You may also submit questions before the annual meeting. Questions will be subject to standard screening criteria such as relevancy, tone and elimination of redundancy.

We hope you are able to attend the annual meeting virtually. Whether or not you attend, it is important that your stock be represented and voted at the meeting. I urge you to please complete, date and return the proxy card in the enclosed envelope, visit www.proxyvote.com to vote your shares electronically or vote by telephone as described in the attached Notice of Annual Meeting. The vote of each stockholder is very important. You may revoke your proxy at any time before it is voted at the annual meeting by giving written notice to the Corporate Secretary of Haynes, by submitting a properly executed paper proxy bearing a later date or by attending the annual meeting virtually and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the Internet or by telephone.

On behalf of the Board of Directors and management of Haynes, I thank you for your continued support.

Sincerely,
Haynes International, Inc.

Michael L. Shor
President and Chief Executive Officer

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HAYNES INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 22, 2022

Stockholders of Haynes International, Inc.:

The Annual Meeting of Stockholders of Haynes International, Inc. (“Haynes”) will be held virtually on Tuesday, February 22, 2022 at 10:00 a.m. (EST) for the following purposes:

To elect Donald C. Campion as a director of Haynes to serve for a one-year term;

To elect Robert H. Getz as a director of Haynes to serve for a one-year term;

To elect Dawne S. Hickton as a director of Haynes to serve for a one-year term;

To elect Michael L. Shor as a director of Haynes to serve for a one-year term;

To elect Larry O. Spencer as a director of Haynes to serve for a one-year term;

To ratify the appointment of Deloitte & Touche LLP as Haynes’ independent registered public accounting firm for the fiscal year ending September 30, 2022;

To approve Amendment No. 1 to the Haynes International, Inc. 2020 Incentive Compensation Plan;

To hold an advisory vote on executive compensation; and

To transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on January 7, 2022 are entitled to notice of, and to vote at, the annual meeting.

YOUR VOTE IS IMPORTANT. EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING VIRTUALLY, PLEASE DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD. A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE. YOU MAY ALSO VOTE YOUR PROXY BY VISITING WWW.PROXYVOTE.COM OR BY TELEPHONE AS DESCRIBED BELOW.

You can attend the meeting online and vote shares electronically during the annual meeting by visiting www.virtualshareholdermeeting.com/HAYN2022 at the time of the meeting. Online check-in will begin at 9:45 a.m. EST, and you should allow approximately 15 minutes for the online check-in procedure. Please have the control number on your proxy card available for check-in. Prior to the date of the annual meeting, you will be able to vote at www.proxyvote.com, and the proxy materials will be available at that site. You may also vote prior to the date of the meeting by telephone by calling 1-800-690-6903. Please consult your proxy card for additional information regarding these alternative methods. You may also submit questions before the annual meeting. Questions will be subject to standard screening criteria such as relevancy, tone and elimination of redundancy.

We hope you are able to attend the virtual annual meeting. Whether or not you attend, it is important that your stock be represented and voted at the meeting. I urge you to please complete, date and return the proxy card in the enclosed envelope, visit www.proxyvote.com to vote your shares electronically or vote by telephone using the information provided above. The vote of each stockholder is very important. You may revoke your written proxy at any time before it is voted at the annual meeting by giving written notice to the Corporate Secretary of Haynes, by submitting a properly executed paper proxy bearing a later date or by attending the annual meeting virtually and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the Internet or by telephone.

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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 22, 2022

GENERAL INFORMATION

This proxy statement is furnished in connection with the solicitation by the Board of Directors of Haynes International, Inc. (“Haynes” or the “Company”) of proxies to be voted at the Annual Meeting of Stockholders to be held at 10:00 a.m. (EST) on Tuesday, February 22, 2022, and at any adjournment thereof. As a result of continuing uncertainty around the COVID-19 pandemic and its variants, the meeting will be held virtually. This proxy statement and the accompanying form of proxy were first mailed to stockholders of the Company on or about January 21, 2022.

You may revoke your written proxy at any time before it is voted at the annual meeting by giving written notice to the Corporate Secretary of Haynes, by submitting a properly executed paper proxy bearing a later date or by attending the virtual annual meeting and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the Internet or by telephone.

All proxies returned prior to the annual meeting, and not revoked, will be voted in accordance with the instructions contained therein. Any executed proxy not specifying to the contrary will be voted as follows:

(1)

FOR the election of Donald C. Campion;

(2)

FOR the election of Robert H. Getz;

(3)

FOR the election of Dawne S. Hickton;

(4)

FOR the election of Michael L. Shor;

(5)

FOR the election of Larry O. Spencer;

(6)

FOR ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for its fiscal year ending September 30, 2022;

(7)

FOR the approval of Amendment No. 1 to the Haynes International, Inc. 2020 Incentive Compensation Plan;

(8)

FOR approval of the compensation of the Named Executive Officers described herein, in a non-binding, advisory capacity; and

(9)

IN the discretion of the proxy holders upon such other business as may properly come before the annual meeting.

The vote with respect to approval of the compensation of the Company’s Named Executive Officers is advisory in nature and will not be binding on the Company or the Board of Directors.

All stockholders of record as of January 7, 2022, the record date for the annual meeting, are entitled to notice of and to vote at the annual meeting. As of the close of business on January 7, 2022, there were outstanding and entitled to vote 12,455,839 shares of common stock of Haynes. Each outstanding share of common stock is entitled to one vote on each matter properly brought before the annual meeting and can be voted only if the record owner of that share, determined as of the record date, is present virtually or represented by a properly completed proxy or a vote by any of the other authorized voting methods described herein at the annual meeting. For beneficial owners who are not record holders, the brokers, banks or nominees holding shares for beneficial owners must vote those shares as instructed. If the broker, bank or nominee has not received instructions from the beneficial owner, the broker, bank or nominee generally has discretionary voting power only with respect to matters that are considered routine matters. If you are

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not the record holder of your shares and want to attend the virtual meeting and vote at the meeting, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspector of election with your ballot when you vote at the meeting. Haynes has no voting securities outstanding other than the common stock. Stockholders do not have cumulative voting rights.

A quorum will be present if holders of a majority of the outstanding shares of common stock are present, virtually or by proxy or other authorized voting method, at the annual meeting. Shares registered in the names of brokers or other “street name” nominees for which proxies are voted on some, but not all, matters will be considered to be present at the annual meeting for quorum purposes, but will be voted only as to those matters as to which a vote is indicated, and will not be voted as to the matters with respect to which no vote is indicated (commonly referred to as “broker non-votes”). If a quorum is present, the nominees for director will be elected by a majority of the votes cast. Abstentions and broker non-votes are treated as votes not cast and will have no effect on the election of directors. The affirmative vote of the majority of the shares present and entitled to vote on the matter is required for adoption of the proposal to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, the approval of Amendment No. 1 to the Haynes International, Inc. 2020 Incentive Compensation Plan and approval of the compensation of the Company’s Named Executive Officers. Accordingly, abstentions applicable to shares represented at the meeting will have the same effect as votes against these proposals. Broker non-votes will have no effect on the outcome of the proposal to approve Amendment No. 1 to the Haynes International, Inc. 2020 Incentive Compensation Plan or the advisory proposal with respect to the compensation of the Company’s Named Executive Officers because these are non-routine matters for which brokers, banks or other nominees may not vote absent instructions, but will have the same effect as votes against the proposal to ratify the appointment of Deloitte & Touche LLP because this proposal is a routine matter for which brokers, banks or other nominees have discretionary voting power. With respect to any other proposals which may properly come before the annual meeting, proposals will be approved upon the affirmative vote of a majority of the shares of common stock present virtually or represented by proxy or other authorized voting method and entitled to vote on such matters at the annual meeting.

A copy of the Haynes International, Inc. Fiscal Year 2021 Annual Report on Form 10-K, including audited financial statements and a description of operations for the fiscal year ended September 30, 2021, accompanies this proxy statement. The financial statements contained in the Form 10-K are not incorporated by reference in this proxy statement, but they do contain important information regarding Haynes.

This solicitation of proxies is being made by Haynes, and all expenses in connection with this solicitation of proxies will be borne by Haynes. Haynes expects to solicit proxies primarily by mail, but directors, officers and other employees of Haynes may also solicit proxies electronically, in person or by telephone.

PROPOSALS FOR 2023 ANNUAL MEETING

Stockholders desiring to submit proposals to be included in the Proxy Statement for the 2023 Annual Meeting pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be required to submit them to the Company in writing on or before September 23, 2022, provided that if the date of the 2023 Annual Meeting is more than 30 days from the anniversary of the 2022 Annual Meeting, then the deadline would be a reasonable time before Haynes begins to print and send its proxy materials. Any such stockholder proposal must also be proper in form and substance, as determined in accordance with the Exchange Act and the rules and regulations promulgated thereunder.

Stockholder proposals other than those to be included in the proxy statement for the 2023 Annual Meeting of Stockholders, pursuant to Rule 14a-8 must be submitted in writing to the Corporate Secretary of Haynes and received on or before November 24, 2022 and not earlier than October 25, 2022, provided however, that in the event that the 2023 Annual Meeting of Stockholders is called for a date that is not within twenty-five (25) days before or after the anniversary date of the 2022 Annual Meeting of Stockholders, notice by the stockholder in order to be timely must be submitted and received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the 2023 Annual Meeting of Stockholders was mailed or public disclosure of the date of the 2023 Annual Meeting is made, whichever first occurs. In addition, any such stockholder proposal must be in proper written form. To be in proper written form, a stockholder proposal (i) other than with respect to director nominations must set forth as to each matter the stockholder proposes to bring before the 2023 Annual Meeting of Stockholders (a) a brief

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description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and record address of the stockholder, (c) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the stockholder, (d) a description of all arrangements or understandings between the stockholder and any other person or persons (including their names) in connection with the proposal of such business by the stockholder and any material interest of the stockholder in such business and (e) a representation that the stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (ii) with respect to director nominations must set forth the information described under the heading “Governance Committee and Director Nominations” herein.

The mailing address of the principal executive offices of Haynes is 1020 West Park Avenue, P.O. Box 9013, Kokomo, Indiana 46904-9013.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Listed below are the only individuals and entities known by the Company to beneficially own more than 5% of the outstanding common stock of the Company as of January 7, 2022 (assuming that their holdings have not changed from such other date as may be shown below):

Name	Number		Percent(1)
BlackRock, Inc.(2)		1,966,666		15.8%
T. Rowe Price Associates, Inc.(3)		1,517,033		12.2%
Dimensional Fund Advisors LP(4)		1,022,316		8.2%
Edenbrook Capital(5)		776,977		6.2%
The Vanguard Group(6)		767,943		6.2%
Royce & Associates, LLC(7)		706,908		5.7%

(1)

The percentage is calculated on the basis of 12,455,839 shares of common stock outstanding as of January 7, 2022.

(2)

The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10022. Based solely on Schedule 13G/A, filed January 25, 2021 with the Securities and Exchange Commission. Represents sole voting power over 1,953,690 shares and sole dispositive power over 1,966,666 shares.

(3)

The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street, 10th floor, Baltimore, Maryland 21202. Based solely on Schedule 13G, filed February 16, 2021 with the Securities and Exchange Commission. Represents sole voting power over 359,774 shares and sole dispositive power over 1,517,0233 shares.

(4)

The address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746. Based solely on Schedule 13G, filed February 16, 2021 with the Securities and Exchange Commission. Represents sole voting power over 981,593 shares and sole dispositive power over 1,022,316 shares.

(5)

The address of Edenbrook Capital is 116 Radio Circle, Suite 202, Mount Kisco, New York 10549. Based solely on Schedule 13G, filed February 4, 2021 with the Securities and Exchange Commission. Represents shared voting and dispositive power over 776,977 shares.

(6)

The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Based solely on Schedule 13G, filed February 8, 2021 with the Securities and Exchange Commission. Represents sole voting power over 13,543 shares, shared voting power over 8,851 shares, sole dispositive power over 754,779 shares and shared dispositive power over 13,164 shares.

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(7)

The address of Royce & Associates, LLC is 745 Fifth Avenue, New York, New York 10151. Based solely on Schedule 13G, filed January 21, 2021 with the Securities and Exchange Commission. Represents sole voting power over 706,908 shares and sole dispositive power over 706,908 shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table shows the ownership of shares of the Company’s common stock as of January 7, 2022 (except as described in any associated footnote), by each director, the Chief Executive Officer, the Chief Financial Officer and the other three most highly compensated executive officers during fiscal year 2021 (the “Named Executive Officers”) and the directors and all executive officers as a group. Except as noted below, the directors and executive officers have sole voting and investment power over the shares of common stock shown in the table. The business address of each person indicated is c/o Haynes International, Inc., 1020 West Park Avenue, P.O. Box 9013, Kokomo, Indiana 46904-9013.

Name	Number		Percent(1)
Michael L. Shor(2)		192,864	1.5%
Robert H. Getz(3)		33,042	*
Donald C. Campion(4)		29,645	*
Dawne S. Hickton(5)		17,390	*
Larry O. Spencer(6)		9,604	*
Daniel W. Maudlin(7)		87,735	*
David L. Strobel(8)		47,230	*
Venkat R. Ishwar(9)		74,887	*
Marlin C. Losch III(10)		83,284	*
All directors and executive officers as a group (14 persons)(11)		831,517	6.4%

Represents beneficial ownership of less than one percent of the outstanding common stock.

(1)

The percentages are calculated on the basis of 12,455,839 shares of common stock outstanding as of January 7, 2022, plus the number of shares that such person or group has the right to acquire beneficial ownership of within sixty days of January 7, 2022, including applicable shares underlying stock options held by such person or group which may be exercised within sixty days of January 7, 2022.

(2)

Shares of common stock beneficially owned by Mr. Shor include 41,589 shares of time-vesting restricted stock subject to forfeiture, all of which Mr. Shor has the right to vote, 116,232 shares underlying stock options which may be exercised within sixty days of January 7, 2022, 32,293 shares owned with no restrictions and 2,650 shares of restricted stock the receipt of which has been deferred to a future year as elected by the participant.

(3)

Included in this amount are 9,328 shares of restricted stock the receipt of which has been deferred to a future year as elected by the participant.

(4)

Included in this amount are 5,150 shares of restricted stock the receipt of which has been deferred to a future year as elected by the participant.

(5)

Included in this amount are 5,069 shares of restricted stock the receipt of which has been deferred to a future year as elected by the participant.

(6)

Included in this amount are 9,604 shares of restricted stock the receipt of which has been deferred to a future year as elected by the participant.

(7)

Shares of common stock beneficially owned by Mr. Maudlin include 12,444 shares of time-vesting restricted stock subject to forfeiture, all of which Mr. Maudlin has the right to vote, 63,050 shares underlying stock options which may be exercised within sixty days of January 7, 2022 and 12,241 shares owned with no restrictions.

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(8)

Shares of common stock beneficially owned by Mr. Strobel include 10,001 shares of time-vesting restricted stock subject to forfeiture, all of which Mr. Strobel has the right to vote, 31,881 shares underlying stock options which may be exercised within sixty days of January 7, 2022 and 5,348 shares owned with no restrictions.

(9)

Shares of common stock beneficially owned by Dr. Ishwar include 8,268 shares of time-vesting restricted stock subject to forfeiture, all of which Mr. Ishwar has the right to vote, 55,902 shares underlying stock options which may be exercised within sixty days of January 7, 2022 and 10,717 shares owned with no restrictions.

(10)

Shares of common stock beneficially owned by Mr. Losch include 9,835 shares of time-vesting restricted stock subject to forfeiture, all of which Mr. Losch has the right to vote, 56,854 shares underlying stock options which may be exercised within sixty days of January 7, 2022 and 16,595 shares owned with no restrictions.

(11)

Includes 499,275 shares underlying stock options that may be exercised within sixty days of January 7, 2022, 121,561 shares of restricted stock and 31,801 shares of deferred restricted stock.

PROPOSALS TO BE VOTED UPON

1 through 5. ELECTION OF DIRECTORS

The Amended and Restated By-Laws of the Company provide that the number of directors constituting the whole board shall be fixed from time to time by resolutions of the Board of Directors, but shall not be less than three nor more than nine directors. By resolution, the Board of Directors has fixed the number of directors at five. The terms of all incumbent directors will expire at the annual meeting. Directors elected at the annual meeting will serve for a term ending at the 2023 annual meeting of stockholders and until their respective successors are elected and qualified.

Nominees

Upon the unanimous recommendation of the Corporate Governance and Nominating Committee (the “Governance Committee”), the Board of Directors has nominated the five directors who served in fiscal 2021 for election at the annual meeting. The Board of Directors believes that all of its nominees will be available for re-election at the annual meeting and will serve if re-elected. The directors nominated for election (the “Nominated Directors”) are:

Name	Age on 12/31/21		Current Position	Served as Director Since
Robert H. Getz		59	Chairman of the Board; Director		2006
Donald C. Campion		73	Director		2004
Dawne S. Hickton		64	Director		2017
Michael L. Shor		62	President and Chief Executive Officer; Director		2012
Larry O. Spencer		68	Director		2020

The Board of Directors recommends that stockholders vote FOR the election of all of the Nominated Directors. Unless authority to vote for any Nominated Director is withheld, the accompanying proxy or alternative method of voting will be voted FOR the election of all the Nominated Directors. However, the persons designated as proxies reserve the right to cast votes for another person designated by the Board of Directors in the event that any Nominated Director becomes unable to, or for any reason will not, serve. If a quorum is present, those nominees receiving a majority of the votes cast will be elected to the Board of Directors.

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Business Experience of Nominated Directors

Director Skills Summary

Michael Shor

Robert
Getz

Donald
Campion

Dawne
Hickton

Larry
Spencer

CEO/Equivalent Experience

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Financial Experience

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Metals Industry Experience

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☐

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Operational/Manufacturing Experience

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Global Operations Experience

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Strategy Experience

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Technology/Systems Experience

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Research & Development Experience

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Environmental, Social and Governance Experience

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Human Capital Management

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Robert H. Getz has been a director since March 31, 2006 and was elected as the Company’s Chairman of the Board effective September 1, 2018. Mr. Getz also serves as a member of the Compensation and Corporate Governance and Nominating Committees. Mr. Getz is Managing Partner and Founder of Pecksland Capital Partners, a private investment firm. Prior to 2016, Mr. Getz served as a Managing Director and Partner of Cornerstone Equity Investors, LLC, a private equity investment firm which he co-founded in 1996. Prior to the formation of Cornerstone, Mr. Getz served as a Managing Director and Partner of Prudential Equity Investors and Prudential Venture Capital. Mr. Getz has served on the boards of numerous public and private technology, manufacturing and metals and mining companies. Mr. Getz currently serves on the Board of Directors of Techtronic Industries (HKG:0669), a manufacturer of power tools and equipment. He also serves on the board of Ero Copper (TSX:ERO), a copper mining and exploration company. Mr. Getz formerly served as a Director of Jaguar Mining until 2019. He also served as a Director of NewMarket Gold Inc. until 2016 and as Chairman of Crocodile Gold Corp until its merger with NewMarket in 2015. The board believes that Mr. Getz’s experience as an investor and extensive record as a director of other domestic and international companies, as well as his wide variety of operating experience, enable him to lead the board with his valuable perspective on a variety of strategic issues.

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Donald C. Campion has been a director since August 31, 2004. Mr. Campion also serves as the Chairman of the Audit Committee and as a member of the Compensation Committee of the Board. Mr. Campion has also served on several company boards, both public and private. He currently serves on the board of MasterCraft Boat Holdings, Inc. (NASDAQ: MCFT), a public company, where he is Chairman of the Audit Committee and is a member of the Compensation Committee. Mr. Campion previously served as Chief Financial Officer of several companies, including VeriFone, Inc., Special Devices, Inc., Cambridge, Inc., Oxford Automotive, Inc. and Delco Electronics Corporation. The Board believes Mr. Campion’s substantial tax and accounting experience built through his career in finance at several significant corporations, his work in engineering, computer systems, human resources, global operations and lean manufacturing as well as his experience serving as a director of other companies make him well qualified to serve as a director. Mr. Campion’s tax and accounting acumen also qualify him as the Company’s Audit Committee financial expert.

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Dawne S. Hickton has been a director since July 1, 2017. Ms. Hickton also serves as Chair of the Compensation Committee and is a member of the Audit and Corporate Governance and Nominating Committees of the Board. Ms. Hickton is an Executive Vice President and President of the Critical Missions Solutions line of business at Jacobs Engineering Group, Inc. (NYSE: J), a technical professional services firm. Serving now in an advisory role, Ms. Hickton is a Founding Partner of Cumberland Highstreet Partners, Inc., an executive strategic consulting firm for manufacturing businesses. Ms. Hickton previously served as Vice Chair, President and Chief Executive Officer of RTI International Metals, Inc. from 2007 until its sale to Alcoa Corporation in 2015. She was Chair of the Board of the Federal Reserve Bank of Cleveland from 2018 to 2020 and was a Director of Triumph Aerospace Group (NYSE: TGI) from 2015 to 2019 and a Director of FNB Corporation (NYSE: FNB) from 2006 to 2013. In addition, she served on the University of Pittsburgh Board of Trustees from 2008 to June 2021 and is an Emeritus Board Member of the Smithsonian National Air & Space Museum. The Board believes that Ms. Hickton’s leadership experience in specialty metals, her extensive experience on public boards, as well as her knowledge of Haynes’ key markets are benefits to Haynes.

Michael L. Shor was elected as the Company’s President and Chief Executive Officer effective September 1, 2018. Prior to that, Mr. Shor served as the Company’s interim President and Chief Executive Officer from May 29, 2018 through August 31, 2018. Mr. Shor has been a director since August 1, 2012, and served as Chairman of the Board from February 2017 through August 2018. Mr. Shor retired as Executive Vice President—Advanced Metals Operations & Premium Alloys Operations of Carpenter Technology Corporation on July 1, 2011 after a thirty-year career with Carpenter Technology. At Carpenter, Mr. Shor held managerial positions in technology, marketing and operations before assuming full responsibility for the performance of Carpenter’s operating divisions. From November 2016 through February 2018, Mr. Shor was a member of the board of AG&E Holdings Inc. (OTC-QB: AGNU), a leading parts distributor and service provider to the casino and gaming industry. The Board believes Mr. Shor’s extensive management experience, and specific specialty materials experience, provide valuable insight to lead the Company in its strategic direction, operational excellence, growth initiatives and further development of its ESG activities.

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Larry O. Spencer, General, USAF (Ret.) has served as a director since January 1, 2020 and serves as Chairman of the Corporate Governance and Nominating Committee and a member of the Audit Committee. General Spencer currently serves as President of the Armed Forces Benefit Association and 5Star Life Insurance Company. General Spencer served until March 1, 2019 as President of the United States Air Force Association, a position he held since his retirement as a four-star general in 2015 after serving 44 years with the United States Air Force. General Spencer held positions of increasing responsibility with the Air Force, which included Vice Chief of Staff, the second highest-ranking military member in the Air Force. General Spencer served as Vice Commander of the Oklahoma City Logistics Center, where he led repair and overhaul operations for a myriad of Air Force aircraft and engines. General Spencer was also the first Air Force officer to serve as the Assistant Chief of Staff in the White House Military Office, and he served as Chief Financial Officer and Director of Mission Support at a major command. General Spencer has also been a board director of the Whirlpool Corporation since August 2016 and the Triumph Group, Inc. since February 2018. The Board believes it benefits from General Spencer’s experiences as a leader of large, complex organizations and global business operations and logistics and his knowledge of aerospace and insights into defense and government affairs.

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Board Diversity Matrix (as of 9/30/2021)
Total Number of Directors	5
		Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors		1	4	0	0
Part II: Demographic Background
African American or Black		0	1	0	0
Alaskan Native or Native American		0	0	0	0
Asian		0	0	0	0
Hispanic or Latino		0	0	0	0
Native Hawaiian or Pacific Islander		0	0	0	0
White		1	3	0	0
Two or More Races or Ethnicities		0	0	0	0
LGBTQ+	0
Did Not Disclose Demographic Background	0

The Governance Committee values diversity and considers it as one criteria evaluated as a part of the total package of attributes and qualifications a particular candidate possesses. The Governance Committee construes the notion of diversity broadly, considering differences in viewpoint, professional experience, education, skills and other individual qualities, including gender identity and similar matters, in addition to race, gender, age, ethnicity and cultural background as elements that contribute to a diverse Board. As of September 30, 2021, diverse persons constituted 50% of the independent members of the Board of Directors, and the same directors are nominees for 2022.

The Board of Directors unanimously recommends that stockholders vote FOR the election of each of the Nominated Directors.

Corporate Governance

Board Committee Structure

The Board of Directors has three standing committees: (i) an Audit Committee; (ii) a Compensation Committee; and (iii) a Corporate Governance and Nominating Committee.

The Audit Committee is currently composed of three members, Messrs. Campion (who chairs the Committee), Spencer and Ms. Hickton, all of whom are independent under the definitions and interpretations of NASDAQ. Under the Audit Committee Charter, adopted by the Board of Directors and available in the investor relations section of the Company’s website at www.haynesintl.com, the Audit Committee is primarily responsible for, among other matters:

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Appointment, retention, termination and oversight, including the approval of compensation, of the Company’s independent auditors;

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Pre-approving audit and non-audit services by the independent auditors;

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Reviewing the audit plan and the estimated fees;

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Reviewing and recommending approval to the full Board of securities disclosures and earnings press releases;

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Evaluating and making recommendations to the Board concerning the financial structure and financing strategy of the Company;

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Managing significant risks and exposures (including cybersecurity risks relating to financial reporting) and policies with respect to risk assessment and risk management relating to financial reporting;

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Reviewing operational and accounting internal controls, including any special procedures adopted in response to the discovery of material control deficiencies;

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Reviewing the action taken by management on the internal auditors’ and independent auditors’ recommendations;

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Reviewing and approving the appointment, reassignment and replacement of the senior internal audit executive;

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Reviewing the qualifications, performance and independence of the independent auditors;

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Reviewing the Company’s Code of Business Conduct and Ethics;

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Reviewing and approving the existence and terms of any transactions between the Company and any related party; and

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Performing such additional activities, and considering such other matters, within the scope of its responsibilities, as the Audit Committee or the Board deems necessary or appropriate.

The Compensation Committee is currently composed of three members, Ms. Hickton (who chairs the Committee), and Messrs. Campion and Getz, all of whom are independent under the definitions and interpretations of NASDAQ. Under the Compensation Committee Charter, adopted by the Board of Directors and available in the investor relations section of the Company’s website at www.haynesintl.com, the Compensation Committee is primarily responsible for, among other matters:

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Establishing the Company’s philosophy and policies regarding executive and director compensation, and overseeing the development and implementation of executive and director compensation programs;

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Setting the CEO’s compensation level and performance goals and approving awards for the CEO under incentive compensation plans based on the performance evaluation conducted by the Board;

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Reviewing and approving the individual elements of total compensation for the executive management of the Company;

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Reviewing and approving revisions to the Company’s executive officer salary range structure and annual salary increase guidelines;

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Assuring that the Company’s executive incentive compensation program is administered in a manner consistent with the Committee’s compensation philosophy and policies as to participation, target annual incentive awards, corporate financial goals and actual awards paid to executive officers;

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Reviewing the Company’s employee benefit programs and approving changes, subject, where appropriate, to stockholder or Board approval;

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Overseeing regulatory compliance with respect to compensation matters;

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Reviewing performance of executive officers other than the CEO and overseeing succession planning;

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Overseeing and making recommendations to the Board with respect to the Company’s incentive compensation plans and equity-based plans;

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Preparing and issuing compensation evaluations and reports; and

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Performing other duties or responsibilities expressly delegated by the Board from time to time relating to the Company’s executive compensation programs.

The Corporate Governance and Nominating Committee is currently composed of three members, Mr. Spencer (who chairs the Committee), Mr. Getz and Ms. Hickton, all of whom are independent under the definitions and interpretations of NASDAQ. Under the Governance Committee Charter, adopted by the Board of Directors and available in the investor relations section of the Company’s website at

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www.haynesintl.com, the Governance Committee is responsible for overseeing the performance and composition of the Board of Directors to ensure effective governance. The Governance Committee identifies and recommends the nomination of qualified directors to the Board of Directors as well as develops and recommends governance principles for the Company. The Governance Committee is primarily responsible for, among other things:

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Overseeing the search for qualified individuals to serve on the Board;

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Recommending to the Board those director nominees who, in the Committee’s opinion, the full Board should recommend for stockholder approval at the annual meeting or for election at such other times when vacancies exist or qualified candidates are identified and available;

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Assisting the Board in evaluating the continued suitability and effectiveness of incumbent director candidates, both individually and as a group;

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Overseeing the administration of the Board, including reviewing and recommending the appointment of directors to committees of the Board and monitoring and reviewing the functions of the committees;

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Developing, approving and reviewing the Company’s Corporate Governance Guidelines;

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Recommending the organization and structure of the Board;

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Overseeing and reviewing annually the structure and effectiveness of the Board’s committee system; and

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Performing any other duties assigned to it by the Board.

Meetings of the Board of Directors and Committees

The Board held ten meetings during the fiscal year ended September 30, 2021. During fiscal 2021, no member of the Board attended fewer than 75% of the aggregate of meetings of the Board and meetings of any committee of the Board of which he or she was a member. Meetings include those held in person, by telephone or by any available electronic means. Scheduled meetings are supplemented by frequent informal exchanges of information and, on occasion, actions taken by unanimous written consent without meetings. All of the members of the Board are expected to attend Haynes’ annual meetings of stockholders. All of the members of the Board attended Haynes’ 2021 annual meeting virtually. The following chart shows the number of meetings in fiscal 2021 of each of the standing committees of the Board at which a quorum was present:

Committee	Meetings in Fiscal 2021
Audit Committee		8
Compensation Committee		9
Corporate Governance and Nominating Committee		4

Meetings of Non-Management Directors

Consistent with NASDAQ governance requirements, the non-management members of the Board of Directors meet in an executive session at least twice per year, and usually in connection with every regularly-scheduled in-person, telephonic or electronic board meeting, to: (a) review the performance of the management team; (b) discuss their views on management’s strategic planning and its implementation; and (c) address any other matters affecting the Company that may concern individual directors. The executive sessions are designed to ensure that the Board of Directors is not only structurally independent, but also is given ample opportunity to exercise independent thought and action. In fiscal 2021, the non-management directors met in executive session six times. When meeting in executive session, the presiding person was the Chairman.

Independence of the Board of Directors and Committee Members

Except for Mr. Shor, all of the members of the Board of Directors, including each member of the Audit Committee, the Compensation Committee and the Governance Committee, meet the criteria for

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independence set forth in the rules and regulations of the Securities and Exchange Commission, including Rules 10A-3(b)(1) and 10C-1(b)(1) of the Exchange Act and the definitions and interpretations of NASDAQ. The Board of Directors has determined that Mr. Campion, the Chairman of the Audit Committee, is an “audit committee financial expert” (as defined by Item 407(d)(5)(ii) of Regulation S-K) and is “independent” (under the definitions and interpretations of NASDAQ).

The roles of Chairman and Chief Executive Officer are split into two positions. The Board of Directors believes that separating these roles aligns the Company with best practices for corporate governance of public companies and accountability to stockholders. The Board also believes that the separation of roles provides a leadership model that clearly distinguishes the roles of the Board and management. The separation of the Chairman and Chief Executive Officer positions allows the Company’s Chief Executive Officer to direct his or her energy toward operational and strategic issues while the non-executive Chairman focuses on governance, leadership and providing counsel and advice to the Chief Executive Officer. The Company believes that separating the Chairman and Chief Executive Officer positions enhances the independence of the Board, provides independent business counsel for the Company’s Chief Executive Officer and facilitates improved communications between Company management and Board members.

Family Relationships

There are no family relationships among the directors and executive officers of the Company.

Conflict of Interest and Related Party Transactions

It is the Company’s policy to require that all conflict of interest transactions between the Company and any of its directors, officers or 5% or greater beneficial owners (each, an “insider”) and all transactions where any insider has a direct or indirect financial interest, including related party transactions required to be reported under Item 404(a) of Regulation S-K, must be reviewed and approved or ratified by the Audit Committee of the Board of Directors. Management discloses the existence of any such transaction to the Audit Committee. In addition, the material terms of any such transaction, including the nature and extent of the insider’s interest therein, must be disclosed to the Audit Committee. The Audit Committee will then review the terms of the proposed transaction to determine whether the terms of the proposed transaction are fair to the Company and are no less favorable to the Company than those that would be available from an independent third party. Following the Audit Committee’s review and discussion, the proposed transaction will be approved or ratified only if it receives the affirmative votes of a majority of the members of the Audit Committee who have no direct or indirect financial interest in the proposed transaction, even though the disinterested directors may represent less than a quorum. Interested directors may be counted in determining the presence of a quorum at a meeting of the Audit Committee which authorizes the contract or transaction. Haynes did not enter into any transactions in fiscal 2021 with any insider.

Governance Committee and Director Nominations

Nominees for the Board of Directors are currently recommended for nomination to the Board of Directors by the Governance Committee. The Governance Committee bases its recommendation for nomination on criteria that it believes will provide a broad perspective and depth of experience in the Board of Directors. In general, when considering independent directors, the Governance Committee will consider the candidate’s experience in areas central to the Company, such as operational experience in a manufacturing environment, aerospace or specialty metals industry experience, general business management experience, finance and legal acumen and experience and demonstrated leadership capabilities as well as considering the candidate’s personal qualities and accomplishments and their ability to devote sufficient time and effort to their duties as directors. Important areas of experience and expertise include manufacturing, international operations, finance and the capital markets, accounting and experience as a director or executive of other companies, or similar experience in a governmental or non-profit setting. The Governance Committee considers diversity as one criteria evaluated as a part of the total package of attributes and qualifications a particular candidate possesses. The Governance Committee construes the notion of diversity broadly, considering differences in viewpoint, professional experience, education, skills and other individual qualities, including gender identity and similar matters, in addition to race, gender, age, ethnicity and cultural background as elements that contribute to a diverse Board. As of September 30, 2021, diverse persons

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constituted 50% of the independent members of the Board of Directors, and the same directors are nominees for 2022. The Governance Committee has adopted Corporate Governance Guidelines which establish, among other matters, a mandatory retirement age for Board members of 72, subject to exceptions that may be granted by the Board. An exception was granted for Mr. Campion. In recent years, two directors have retired pursuant to the Board’s retirement age policy, which the Board believes demonstrates the Board’s adherence to proper board refreshment. In keeping with its commitment to enhancing diversity of viewpoints and background on the Board, the two most recent directors appointed to the Board, each of whom brings substantial experience in the form of executive leadership in the specialty metals industry and the U.S. Air Force, respectively, further the Board’s goals of enhancing diversity of viewpoints and experience. The Company benefits from their valuable perspectives on the competitive landscape confronting the Company, emerging trends in the defense and aerospace industry as well as their general leadership skills.

Although the Governance Committee has no formal policy regarding the consideration of director candidates recommended by stockholders, the Governance Committee will consider candidates recommended by stockholders, provided the names of such persons, accompanied by relevant biographical information, are properly submitted in writing to the Secretary of the Company in accordance with the procedure described below for stockholder nominations. Candidates recommended by stockholders are evaluated in the same manner using the same criteria as candidates recommended by the Board or Governance Committee or individual directors or officers. In any case, the Governance Committee encourages the proposal of diverse candidates.

Stockholders may nominate directors by providing timely notice thereof in proper written form to the Secretary of Haynes. To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and received at Haynes’ principal executive offices (a) in the case of an annual meeting, not less than ninety days nor more than one hundred twenty days prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that the annual meeting is called for a date that is not within twenty-five days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting is mailed or public disclosure of the date of the annual meeting is made, whichever first occurs; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting is mailed or public disclosure of the date of the special meeting is made, whichever first occurs.

To be in proper written form, a stockholder’s notice to the Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being names as a nominee and to serving as a director if elected.

Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to its Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as well as to its directors and other officers

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and employees. This Code is posted on the Company’s website at https://haynesintl.com/investor-relations/corporate-governance/code-of-business-conduct-and-ethics. The Audit Committee of the Board annually reviews the Code of Business Conduct and Ethics and is informed of any whistleblower complaints provided thereunder. In addition, the Chief Executive Officer discusses the importance of ethical conduct and compliance with the Code in each quarterly employee meeting or update.

Board of Directors’ Role in Risk Oversight

As a part of its oversight function, the Board of Directors monitors how management operates the Company. The full Board is engaged in the Company’s Enterprise Risk Management program, including through regular reporting and discussion, and by working with management to identify and prioritize enterprise risks—the specific financial, operational, business, reputational and strategic risks that the Company faces, whether internal or external. These functions are distributed among the full Board, the committees of the Board and management, as appropriate. Certain strategic and business risks, such as those relating to the Company’s products, markets and capital investments (including environmental and social risks), are overseen by the entire Board of Directors. The Audit Committee oversees management of market and operational risks that could have a financial impact, such as those relating to internal controls or liquidity. The Corporate Governance and Nominating Committee manages the risks associated with governance issues, such as the independence of the Board of Directors, and the Compensation Committee manages risks relating to the Company’s compensation plans and policies, including analysis of appropriate incentives and measures.

In addition to the formal compliance program, the Board of Directors encourages management to promote a corporate culture that understands risk management and incorporates it into the overall corporate strategy and day-to-day business operations of the Company. The Company’s risk management structure also includes a standing enterprise risk management committee comprised of members of the executive team and led by the CEO, collectively undertaking an ongoing effort to assess and analyze the most likely areas of current and future risk for the Company and to address them in its short-term and long-term planning processes. This committee, or individual members thereof, periodically reports to the Board, and individual members of the committee may also do so on an informal basis.

Communications with Board of Directors

Stockholders may communicate with the full Board of Directors by sending a letter to Haynes International, Inc. Board of Directors, c/o Corporate Secretary, 1020 West Park Avenue, P.O. Box 9013, Kokomo, Indiana 46904-9013. The Company’s Corporate Secretary will review the correspondence and forward it to the chairman of the appropriate committee or to any individual director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening, illegal, does not reasonably relate to the Company or its business or is similarly inappropriate. In addition, interested parties may contact the non-management directors as a group by sending a written communication to the Corporate Secretary as directed above. Such communication should be clearly addressed to the non-management directors.

Director Compensation Program

Directors who are also Company employees do not receive compensation for their services as directors. Following is a description of the Company’s compensation program for non-management directors in fiscal 2021. In consultation with its independent compensation consultant, Total Rewards Strategies, the Compensation Committee reviews the cash and equity compensation paid to non-management directors and recommends changes to the Board of Directors, as appropriate.

Equity Compensation

In consultation with its compensation consultant, for fiscal 2021, the Compensation Committee established a target equity restricted stock grant amount of $105,000 for each non-employee Director and $125,000 for the Chairman of the Board. In establishing the grants, the Compensation Committee considered information provided by Total Reward Strategies on methods of encouraging long-term stock ownership by directors, as well as information regarding how comparator group companies utilize restricted or deferred stock.

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Members of the Board of Directors are granted shares of time-based restricted stock annually. The shares of restricted stock will vest in full on the earlier of (i) the first anniversary of the grant date, or (ii) the failure of the director to be re-elected at an annual meeting of the stockholders of the Company as a result of the director being excluded from the nominations for any reason other than “cause” as defined in the applicable incentive compensation plan.

Cash Compensation

In consultation with its compensation consultant, the Board kept the 2021 annual cash Director retainer and the Committee fees and Committee chairman fees unchanged from those in the prior year with an annual retainer of $60,000 for each non-employee Director and with the Chairman of the Board receiving an additional $45,000 retainer. Committee fees were $10,000 each for the Audit Committee members, $7,500 each for the Compensation Committee members and $5,000 each for the Corporate Governance and Nominating Committee members. Committee chairman fees were $17,500 for serving as chairman of the Audit Committee, $12,500 for serving as chairman of the Compensation Committee and $10,000 for serving as chairman of the Corporate Governance and Nominating Committee. All cash fees are paid in quarterly installments.

2021 Director Compensation

For the first half of fiscal 2021, the Board of Directors continued the temporary reduction of all its cash fees (including committee service-related fees) by 10% that initially took effect as of April 2020 in response to the economic impact of COVID-19. Such reductions remained in place until April 2021 at which time the fees were restored to previous levels.

2021 Director Compensation Table

The following table provides information regarding the compensation paid to the Company’s non-employee members of the Board of Directors in fiscal 2021, giving effect to the adjustments discussed above.

Name	Fees Earned or Paid in Cash ($)			Restricted Stock Awards ($)(1)			Dividends on Stock Awards ($)			Total ($)
R. H. Getz, Chairman		$	110,188		$	124,995		$	9,390		$	244,573
D. C. Campion, Director		$	90,250		$	105,004		$	8,613		$	203,868
D. S. Hickton, Director		$	90,250		$	105,004		$	9,268		$	204,522
L. O. Spencer, Director		$	80,750		$	105,004		$	6,354		$	192,109

(1)

Represents restricted stock with a grant date fair value equal to $22.64 per share, which was the closing price of the Company’s common stock on the trading day prior to the date of the grant of November 19, 2020 computed in accordance with FASB ASC Topic 718. The shares of restricted stock are subject to vesting as described more fully under “Director Compensation Program—Equity Compensation”.

Director Deferred Compensation Plan

The Company has a deferred compensation plan for directors and executives that permits directors to defer up to 100% of their cash retainers and up to 100% of their annual equity grant. Several non-employee directors elected to defer the receipt of shares upon vesting to a later date. Any deferral election also results in deferral of the receipt of dividends on the relevant restricted stock throughout the deferral period.

Director Stock Retention Guidelines

The Board of Directors approved stock ownership guidelines for non-employee members of the Board of Directors effective January 1, 2014. The guidelines provide that directors own common stock equal to 400% of their annual cash retainer within five (5) years of their date of election to the Board. For purposes of this calculation, shares owned by an individual include shares or other equity interests owned directly or

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indirectly, including those subject to risk of forfeiture (but not forfeited) under the Company’s 2009 Restricted Stock Plan, the 2016 Incentive Compensation Plan or the 2020 Incentive Compensation Plan, as applicable, and shares subject to a deferral election. The guidelines also provide that directors retain a certain amount of stock (based upon the value of shares owned) after meeting the ownership goal. As of January 7, 2022 all of the directors met the guideline.

The share ownership amount for each non-employee director as of January 7, 2022 is summarized below and is based on the closing price of the Company’s stock as of January 7, 2022.

Name	Number of Non-vested Shares		All Other Shares		Total Share Ownership		Ownership Value as of 1/7/2022
R. H. Getz		2,836		30,206		33,042		$	1,415,519
D. C. Campion		1,418		28,227		29,645		$	1,269,992
D. S. Hickton		2,383		15,007		17,390		$	744,988
L. O. Spencer		2,383		7,221		9,604		$	411,435

Expenses

The Company reimburses directors for their reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors or any committee thereof and other expenses incurred by directors in connection with their service to the Company.

Indemnification Agreements

Pursuant to individual written agreements, the Company indemnifies all of its directors against loss or expense arising from such individuals’ service to the Company and its subsidiaries and affiliates and advances attorneys’ fees and other costs of defense to such individuals in respect of claims that may be eligible for indemnification under certain circumstances.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee as of September 30, 2021 were Ms. Hickton, Mr. Campion and Mr. Getz. None of the members of the Compensation Committee are now serving or previously have served as employees or officers of the Company or any subsidiary, and none of the Company’s executive officers serve as directors of, or in any compensation related capacity for, companies with which members of the Compensation Committee are affiliated.

Executive Compensation

Compensation Committee Report

The Compensation Committee of the Board of Directors has reviewed and discussed the following Compensation Discussion and Analysis with management and, based on such review and discussion, has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

SUBMITTED BY THE COMPENSATION COMMITTEE

Dawne S. Hickton, Chair
Donald C. Campion
Robert H. Getz

Compensation Discussion and Analysis

2021 Business Summary

In fiscal 2021, the Company results, which reflected the beginning of the recovery from the COVID-19 pandemic, were as follows.

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Net revenues of $337.7 million in fiscal 2021 as compared to $380.5 million in fiscal 2020 and net loss of $8.7 million in fiscal 2021 compared to a net loss of $6.5 million in fiscal 2020. The Company returned to quarterly profitability in the second half of fiscal 2021 with a significantly lower volume breakeven point driven by price increases, cost reductions and efficiency improvements.

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Backlog increased to $175.3 million at the end of fiscal 2021, up $22.0 million from $153.3 million at the end of fiscal 2020. The Company believe that, in fiscal 2022, its three core markets of aerospace, chemical processing and industrial gas turbines will be experiencing positive growth rates at the same time, which could accelerate its overall growth rate.

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Net cash provided from operating activities of $23.3 million in fiscal 2021 compared to net cash provided from operating activities of $36.2 million in fiscal 2020, a decrease of $12.9 million. The Company generated $40.2 million in operating cash flow during the first nine months of the fiscal year and used that cash for a capital allocation strategy to increase the value of the business. The strategy included: continued commitment to funding the regular quarterly dividend; funding growth in the Company’s work-in-process inventory as order entry improved; repurchasing stock in an open-market repurchase program; and investing in the Company’s U.S. pension assets in an effort to reduce what was the largest liability on the Company’s balance sheet.

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The Company reduced its U.S. pension net liability by $79.1 million from approximately $105.2 million to approximately $26.1 million over fiscal 2021 due to favorable market conditions combined with total Company plan contributions of $21.0 million. In addition, the Company’s retiree medical liability was reduced by $10.4 million, and its U.K. pension liability improved by $3.0 million. All of those pension activities combined resulted in a net liability improvement of $92.5 million, an impactful value-creating balance sheet transformation. In addition, with the changes to the asset allocation, including a customized liability-driven investing strategy, the Company expects significantly reduced volatility going forward related to pension funding percentage (U.S. pension currently approximately 93% funded) and reduced pension expense (fiscal year 2022 expense expected to decline $6 million).

Overview

This Compensation Discussion and Analysis describes the key principles and approaches used to determine the compensation in fiscal 2021 for Michael L. Shor, the Company’s principal executive officer; Daniel W. Maudlin, the Company’s principal financial officer; and David L. Strobel, Venkat R. Ishwar and Marlin C. Losch III, the Company’s other three most highly compensated executive officers in fiscal 2021, as well as other senior executives. Detailed information regarding the compensation of these named executive officers, who are referred to as “Named Executive Officers” or “NEOs”, appears in the tables following this Compensation Discussion and Analysis. This Compensation Discussion and Analysis should be read in conjunction with those tables.

This Compensation Discussion and Analysis consists of the following parts:

Responsibility for Executive Compensation Decisions

Role of Executive Officers in Compensation Decisions

Executive Compensation Philosophy and Principles

Committee Procedures

Setting Named Executive Officer Compensation in Fiscal 2021

Responsibility for Executive Compensation Decisions

The Compensation Committee of the Board of Directors, whose membership is limited to independent directors, acts pursuant to a Board-approved charter. The Compensation Committee is responsible for approving the compensation programs for all executive officers, including the Named Executive Officers (other than the Chief Executive Officer), and making decisions regarding specific compensation to be paid or awarded to them. The Compensation Committee also recommends compensation for the Chief Executive

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Officer to the full Board for its approval. The Compensation Committee has responsibility for establishing and monitoring adherence to the Company’s compensation philosophies and objectives. The Compensation Committee aims to ensure that the total compensation paid to the Company’s executives, including the NEOs, is fair, reasonable and competitive. Although the Compensation Committee approves all elements of an executive officer’s compensation, it approves equity grants and certain other incentive compensation subject to approval by the full Board of Directors.

Role of Executive Officers in Compensation Decisions

No Named Executive Officer participates directly in the determination of his or her compensation. For Named Executive Officers other than himself, the Company’s Chief Executive Officer provides the Compensation Committee with performance evaluations and presents individual compensation recommendations to the Compensation Committee, as well as compensation program design recommendations. The Chief Executive Officer’s performance is evaluated by the Board of Directors. Mr. Shor’s salary was initially established by the Executive Employment Agreement between Mr. Shor and the Company entered into on September 1, 2018 (as reduced by the 10% temporary salary reduction put in place in April 2020 for the Named Executive Officers and other executive officers of the Company and reinstated in April 2021 (discussed below)) and is adjusted on an annual basis by the Board upon recommendation of the Compensation Committee. The Chief Executive Officer and the Chief Financial Officer work closely with the Compensation Committee on the development of the financial targets and overall compensation awardable to the Named Executive Officers under the Company’s Management Incentive Plan (“MIP”) as those amounts are determined by reference to the Company’s annual operating budget. The Compensation Committee retains the full authority to modify, accept or reject all compensation recommendations provided by management.

Executive Compensation Philosophy and Objectives

The Company’s compensation program is designed to attract, motivate, reward and retain key executives who drive the Company’s success and enable it to consistently achieve corporate performance goals in the competitive high-performance alloy business and increase stockholder value. The Company seeks to achieve these objectives through a compensation package that:

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Pays for performance: The MIP provides incentives to the Company’s executive officers based upon meeting or exceeding specified short-term financial goals, taking into consideration the ability of the Company’s executives to influence financial results. In addition, grants of restricted stock, performance shares and stock options provide an appropriate incentive to produce stockholder returns through long-term corporate performance, including through the attainment of performance targets applicable to performance share grants. Executive officers are further incentivized by compensation that recognizes and rewards management for its efforts and perseverance during extraordinary business or other conditions, including the COVID-19 pandemic.

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Supports the Company’s business strategy: The annual bonus provided by the MIP focuses the Company’s executive officers on short-term goals, while the Company’s equity compensation plans aim to engage management in the Company’s long-term performance. The Company believes both of those elements serve to align management interests with creating stockholder value.

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Pays competitively: The Company sets compensation levels so that they are in line with those of individuals holding comparable positions and producing similar results at other multi-national corporations of similar size, value and complexity.

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Values stockholder input: In setting compensation levels, the Company takes into account the outcome of stockholder advisory votes regarding executive compensation.

In addition to aligning management’s interests with the interests of the stockholders, a key objective of the Company’s compensation plan is mitigating the risk in the compensation package by ensuring that a significant portion of compensation is based on the long-term performance of the Company. This reduces the risk that executives will place too much focus on short-term achievements to the detriment of the long-term sustainability of the Company. The Compensation Committee also values and seeks diversity in the executive team, including the Named Executive Officers. As of September 30, 2021, the ten-person executive team included three diverse members.

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As part of its oversight responsibilities, the Compensation Committee, along with a cross-functional team with representatives from Human Resources, Legal and Finance, annually evaluates the risks arising from the Company’s compensation policies and practices, with the assistance of its independent compensation consultant. The Committee considered, among other factors, the design of the incentive compensation programs, which are closely linked to corporate performance, the mix of short-term and long-term compensation, the maximum payout levels for short- term and long-term incentives, the distribution of compensation between equity and cash and other factors that mitigate risk. The Committee concluded that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

At the Company’s 2021 annual meeting of stockholders, the stockholders voted on a non-binding advisory proposal to approve the compensation of the Named Executive Officers. Approximately 96.27% of the shares voted on the proposal were voted in favor of the proposal. In light of the approval by a substantial majority of stockholders of the compensation programs described in the Company’s 2020 proxy statement, the Compensation Committee did not implement material changes to the executive compensation programs as a result of the stockholders’ advisory vote.

2021 Compensation Plan Highlights

The design of the Company’s executive compensation program for 2021 was generally consistent with the design of the 2020 program. The following table highlights the features of the program:

	• Pay-for-performance philosophy, including rewarding management for performance under extraordinary circumstances			• Performance share awards to enhance the balance of the long-term incentive program, together with stock options and restricted stock
	• Pay positioning philosophy relative to comparator group and mix of base salary and annual and long-term incentive compensation			• Relative total shareholder return (TSR) as performance share metric to ensure alignment with shareholders
	• Annual incentive compensation metrics			• Clawback policy consistent with SEC proposed regulations mandated by Dodd Frank
	• Change-in-control agreements with best practice features (double-trigger severance, less than three times base salary and target bonus, no tax gross-up, no enhanced retirement benefits)			• Share ownership and retention requirement for management and directors
	• Compensation risk assessment

Committee Procedures

The Compensation Committee retains the services of Total Rewards Strategies, an independent compensation consulting firm, to analyze the compensation and financial data of a comparator group of companies. Total Rewards Strategies also provides the Compensation Committee with alternatives to consider when making compensation decisions and provides opinions on compensation recommendations the Compensation Committee receives from management. Total Rewards Strategies provided analyses and opinions regarding executive compensation trends and practices to the Compensation Committee during fiscal 2020 and fiscal 2021. Total Rewards Strategies did not provide any services to the Company other than compensation consulting to the Compensation Committee in fiscal 2020 or fiscal 2021. Total Rewards Strategies’ work for the Company in fiscal 2021 did not raise any conflicts of interest.

Comparator Group

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The Company uses the comparator group as a reference for its executive compensation program. The Compensation Committee believes the comparator group is representative of the labor market from which the Company recruits executive talent. Factors used to select the comparator group companies include industry segment, market capitalization, revenue, profitability, labor markets, business model, customer markets, institutional ownership and number of employees.

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The Compensation Committee reviews and approves the composition of the comparator group annually. For the 2021 fiscal year, the Committee approved the fiscal 2021 comparator group which is comprised of 23 companies, including industrial metals, mineral and manufacturing companies.

Ampco-Pittsburgh	L.B. Foster	Shiloh Industries
CECO Environmental	Lindsay Corp.	Skyline Champion
CIRCOR International	LSB Industries	Stoneridge
Columbus-McKinnon	Materion	Synalloy Corp.
Core Molding Technologies	Myers Industries	Timken Steel
CTS	NN	Titan International
Ducommun	Northwest Pipe	Universal Stainless & Alloy Products
Insteel Industries	Olympic Steel

Market Rates

Among other analyses, Total Rewards Strategies provides the 50th percentile, or median, of the comparator group for base salary, cash bonus, long-term incentives and total overall compensation, or the Median Market Rate. The Compensation Committee uses the Median Market Rate as a primary reference point when determining compensation targets for each element of pay. When individual and targeted company financial performance is achieved, the objective of the executive compensation program is to provide overall compensation near the Median Market Rate of pay practices in the comparator group of companies. Actual target pay for an individual may be more or less than the Median Market Rate based on the Compensation Committee’s evaluation of the individual’s performance, experience and potential.

Consistent with the Compensation Committee’s philosophy of pay for performance, incentive payments can exceed target levels only if overall Company financial targets are exceeded and will fall below target levels if overall financial goals are not achieved.

Setting Named Executive Officer Compensation in Fiscal 2021

Michael L. Shor was appointed President and Chief Executive Officer of the Company on September 1, 2018, after serving as interim President and Chief Executive Officer since May 29, 2018. The disclosures regarding Mr. Shor’s fiscal 2021 compensation within this section should be read with that background and in conjunction with the disclosures provided under the “CEO Compensation” section and the notes to the “Summary Compensation Table” provided herein.

Components of Compensation

The chief components of each Named Executive Officer’s compensation in fiscal 2021 were:

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base salary;

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a performance-based annual incentive award under the MIP;

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long-term compensation awards that include a combination of stock options, time-based restricted stock and performance shares; and

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employee benefits, such as life, health and disability insurance benefits, and a qualified savings (401(k)) plan.

Each element of compensation is designed to achieve a specific purpose and to contribute to a total package that is competitive, appropriately performance-based and valued by the Company’s executives. The Compensation Committee reviews information provided by Total Rewards Strategies and the Company’s historical pay practices to determine the appropriate level and mix of compensation. This may include consideration of compensating executives, whether in cash or any form of equity, for the additional time, effort and flexibility required to continue to operate the business under extraordinary circumstances, including, without limitation, the COVID-19 pandemic. In allocating compensation among elements, the Company believes the compensation of the Company’s most senior executives, including the Named Executive

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Officers, who have the greatest ability to influence Company performance, should be predominately performance-based. As a result of this strategy, 63% of the Named Executive Officers’ total target compensation, including the Chief Executive Officer’s compensation, was allocated to performance-based pay in fiscal 2021.

Fiscal 2021 Target Compensation

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Base Salary

The Company provides executives with a base salary that is intended to attract and retain the quality of executives needed to lead the Company’s complex businesses. Base salaries for executives are generally targeted at the Median Market Rate of the comparator group, although individual performance, experience, internal equity, compensation history and contributions of the executive are also considered. The Committee reviews base salaries for Named Executive Officers annually and may make adjustments based on individual performance, experience, market competitiveness, internal equity and the scope of responsibilities.

The base salaries of the Named Executive Officers at the beginning of fiscal 2021 were held constant with the levels established after the implementation of a 10% temporary salary reduction in April 2020 for the Named Executive Officers and other executive officers of the Company in response to the adverse financial impacts of the COVID-19 pandemic. These reductions were reversed effective as of January 1, 2021 for all of the Named Executive Officers other than the Chief Executive Officer, whose salary remained at the reduced amount until April 1, 2021. Other than the reversal of previous reductions, no Named Executive Officer (or other executive officer of the Company) received any salary increase during fiscal 2021. More widely across the Company, temporary furloughs occurred in early fiscal 2021. Most employees were required to take a week of unpaid furlough in the fourth quarter of fiscal 2020 and were required to choose between a 7.7% reduction in pay or a week of unpaid furlough in the first quarter of fiscal 2021. The furlough requirement did not apply to the Named Executive Officers, or any other executive officer of the Company, due to the previous 10% reduction of their base salaries in April 2020.

The following table provides annualized base salary information, giving effect to the salary reductions described herein for the Named Executive Officers effective July 1, 2020 and base salary as of July 1, 2021 as a percentage of the Median Market Rate for 2021:

Named Executive Officer	Base Salary as of July 1, 2020			Base Salary as of July 1, 2021			Base Salary as a Percentage of Median Market Rate for 2021
Michael L. Shor		$	573,750		$	637,500		94%
Daniel W. Maudlin		$	280,800		$	312,000		82%
David L. Strobel		$	265,500		$	295,000		91%
Venkat R. Ishwar		$	263,700		$	293,000		101%
Marlin C. Losch III		$	256,500		$	285,000		95%

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Management Incentive Plan—Annual Cash Incentive

The purpose of the MIP is to provide an annual cash bonus based on the achievement of specific operational and financial performance targets, tying compensation to the creation of value for stockholders. Target cash bonus awards are determined for each executive position by competitive analysis of the comparator group. In general, the median annual cash bonus opportunity of the comparator group is used to establish target bonus opportunities, but consideration is given to the individual executive’s responsibilities and contributions to business results and internal equity. The MIP allows the Board of Directors discretion to administer the plan, including not paying out any compensation thereunder, accounting for unforeseen one-time transactions or adjusting the performance measures based on external economic factors. During fiscal 2021, the Board used its discretion to allow for an increase to the MIP as a result of the Company’s lump sum contribution to the U.S. pension fund and increasing its working capital requirements as business levels improved, each of which had an adverse impact on the operating cash flow results. Based upon fiscal 2020’s net income and 2021’s net loss and positive operating cash flow, no MIP payment was made for fiscal 2020, and MIP payments in excess of the target but less than the maximum were made for fiscal 2021. MIP payments are made on a sliding scale in accordance with established performance targets and are earned as of the end of the applicable fiscal year. MIP payments are sometimes referred to herein as a “bonus”.

For fiscal 2021, the target performance level was established by reference to the Company’s consolidated annual operating budget. The annual operating budget is developed by management and presented by the CEO and the CFO to the Board of Directors for its review and approval. The bonus target was intended to represent corporate performance which the Board of Directors believed was more likely than not to be achieved based upon management’s presentation of the annual operating budget. For fiscal 2021, the Compensation Committee established targets by reference to the Company’s net income (loss) and operating cash flow as the financial goals for MIP payouts.

The table below lists the 2021 MIP incentive awards that could have been earned at the minimum, target and maximum levels by each Named Executive Officer as a percentage of his base salary:

	MIP Incentive as % of Base Salary
Named Executive Officer	Minimum		Target		Maximum
Michael L. Shor		40.0%		80.0%		120.0%
Daniel W. Maudlin		32.5%		65.0%		97.5%
David L. Strobel		30.0%		60.0%		90.0%
Venkat R. Ishwar		25.0%		50.0%		75.0%
Marlin C. Losch III		30.0%		60.0%		90.0%

The Compensation Committee and the Board of Directors changed the MIP structure for fiscal 2021 by replacing net income as the sole financial metric with a dual metric of net income and operating cash flow. The following table sets forth the targets for net income (loss), as well as actual net income (loss) for fiscal 2021:

($ in thousands)	Net Income
Threshold		$	(32,698)
Target		$	(25,152)
Maximum		$	(15,091)
Fiscal 2021 Actual Net Loss		$	(8,026)

The following table sets forth the targets for operating cash flow, as well as actual operating cash flow for fiscal 2021:

($ in thousands)	Operating Cash Flow
Threshold		$	23,344
Target		$	33,349

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($ in thousands)	Operating Cash Flow
Maximum		$	46,689
Fiscal 2021 Actual Operating Cash Flow (adjusted for lump sum pension payment)		$	38,265

Long-Term Incentives

Stockholders approved the 2016 Incentive Compensation Plan on March 1, 2016, and the 2020 Incentive Compensation Plan on February 25, 2020. In fiscal 2021, grants were made under the 2020 Plan. The plans provide the Company with a means to grant compensation awards designed to attract and retain key management, including the Named Executive Officers. The Compensation Committee administers the plans and believes awards available under the plans provide an appropriate incentive to produce superior returns to stockholders over the long term by offering participants an opportunity to benefit from stock appreciation through stock ownership.

Competitive benchmarking to the comparator group, the executive’s responsibilities and the individual’s contributions to the Company’s business results determine the level of long-term compensation for each NEO and other executive officers. In general, the median value of long-term compensation in the comparator group is used to determine the approximate value of long-term incentives. Fair value methodologies, which are consistent with the Company’s expensing of equity awards under Financial Accounting Standards Board ASC Topic 718 Compensation—Stock Compensation, were used in fiscal 2021 to determine the value of stock options.

The Company currently does not have any formal plan requiring it to grant equity compensation on specified dates. With respect to newly hired or promoted executives, the Company’s practice is typically to consider stock equity grants at the first meeting of the Compensation Committee and Board of Directors following such executive’s hire date. The recommendations of the Compensation Committee are subsequently submitted to the Board of Directors for approval. The Company’s policy is to issue equity grants at a time when the Company is in an “open window” for trading purposes, which customarily begins two days after the filing of the Company’s required quarterly and annual reports with the Securities and Exchange Commission, and that the grant value of all equity awards is equal to the fair market value on the date of grant, which is determined using the closing price on the trading day prior to the grant date. The Compensation Committee considers whether or not to grant additional equity awards to the management team on an annual basis. This may include compensating executives for the additional time, effort and flexibility required to continue to operate the business under any extraordinary circumstances, including the COVID-19 pandemic. In addition, a pool of shares (initially in the amount of 5,000 shares but decreasing over time as grants are made) is available for management to provide “spot grants” to employees based upon performance.

The amount of equity compensation for the Named Executive Officers and other executive officers is determined by the Committee as part of the total mix of compensation, including base salary, long-term incentive compensation and short-term incentive compensation, provided that the Chief Executive Officer’s compensation is subject to approval by the full Board. The Committee uses information provided by its compensation consultant regarding the composition and median value of equity compensation for equivalent executive officers in the comparator group as a reference point in its analysis of appropriate equity compensation for the CEO and the other Named Executive Officers. The Committee then applies its judgment and experience to balance the following factors in determining equity compensation for the CEO and the other Named Executive Officers:

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responsibilities and duties of the relevant officer;

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individual performance;

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Company performance;

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stockholder return;

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internal pay equity;

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individual potential; and

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retention risk.

The Committee believes that a combination of performance shares, time-based restricted stock and stock options aligns the executives’ interests with those of the stockholders and provides an appropriate balance between long-term stock price appreciation and executive retention. In fiscal 2021, the regular annual equity grants to the NEOs consisted of one-third stock options, one-third performance shares and one-third time-based restricted stock.

Clawback Policy

The Board of Directors has adopted a clawback policy that is consistent with the proposed, but not yet finalized, SEC regulations mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The clawback policy provides for recoupment of performance-based executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under federal securities laws. The policy applies to current and former executives and requires reimbursement or forfeiture of any excess performance-based compensation received by an executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.

If needed to comply with the final regulations when issued, the Board of Directors will make changes to that policy.

Anti-Pledging and Anti-Hedging Policies

Pledging is the practice in which a director or executive secures a loan by using equity compensation obtained from the Company as collateral to secure the loan (“Pledging”). Any director, executive officer or other employee of the Company is prohibited from Pledging. In addition, directors, executive officers and key employees of the Company are prohibited from trading in any interest or position relating to the future price of the Company’s securities, such as a put, call or short sale.

Stock Ownership and Retention Guidelines

The Board of Directors has approved stock ownership guidelines applicable to executive officers and members of the Board of Directors. The guidelines established the goal that, within five (5) years from the date of hiring, promotion or election, executive officers and directors each own an amount of the Company’s common stock determined based upon a multiple of base salary, in the case of executive officers, or annual retainer, in the case of board members. The multiples are as follows: in the case of the Chief Executive Officer, 300% of base salary; in the case of all other Named Executive Officers, 200% of base salary; in the case of other executive officers, 100% of base salary; and in the case of non-employee members of the Board of Directors, 400% of annual cash retainer. The calculation of shares owned by an individual includes shares or other equity interests owned directly or indirectly, including those subject to risk of forfeiture (but not forfeited) under the Company’s 2016 or 2020 Incentive Compensation Plan, as applicable, including performance shares at target amount, whether or not then earned, shares subject to a deferral election and shares subject to exercisable stock options with exercise prices lower than then current market value. The guidelines also require that executive officers and directors retain at all times the required amount of stock (based upon value of shares owned) after first meeting the ownership goal. As of September 30, 2021, given the five (5) year accumulation period permitted by the guidelines, all of the executive officers of the Company, including the Named Executive Officers, to whom the guidelines are applicable were in compliance with the guidelines.

Stock Options

All options granted to the Company’s NEOs vest in three equal annual installments on the first, second and third anniversaries of the grant date. The Company currently grants stock option awards under the 2020 Incentive Compensation Plan. Upon departure from the Company, executives retain the options; provided that, in the event of termination of employment due to death, disability (for options granted under the 2016 and 2020 Plans) and retirement (for options granted under the 2016 and 2020 Plans), the options remain exercisable for five years following the date of the event; in the case of termination for cause (as defined in

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the 2016 and 2020 Plans), the options are forfeited and no longer exercisable; and in the case of termination of employment for any reason other than those noted above, the options remain exercisable for a period of, in the case of the CEO, six months following the date of termination, or in the case of any other NEO, ninety days following the date of termination.

On November 24, 2020, executives, including the Named Executive Officers, were granted stock options that expire after ten years. In determining the number of shares underlying the options to be granted to the Named Executive Officers, the Compensation Committee established the value of such shares underlying the options at $5.91 for the November 2020 grant using a fair value methodology. The options vest one-third per year over three years from the date of grant.

Restricted Stock and Performance Shares

Grants of restricted stock and performance shares vest in accordance with the terms and conditions established by the Compensation Committee. In fiscal 2021, the Compensation Committee set restrictions on the vesting of the performance share grants based on the achievement of specific performance goals, while vesting of the restricted stock grants is time-based.

Subject to certain exceptions, restricted stock and performance share grants are subject to forfeiture if employment or service terminates prior to the end of the vesting period and, in the case of performance shares, if performance goals are not met. The Company assesses, on an ongoing basis, the probability of whether performance criteria will be achieved. The Company will recognize compensation expense over the performance period if it is deemed probable that the goal will be achieved. The fair value of the Company’s restricted stock is determined based upon the closing price of the Company’s common stock on the trading day before the grant date. The plans provide for the adjustment of the number of shares covered by an outstanding grant and the maximum number of shares for which awards may be granted in the event of a stock split, extraordinary dividend or distribution or similar recapitalization event. Outstanding shares of restricted stock are entitled to receive dividends on shares of common stock after the grant date, but no other type of equity compensation award is entitled to receive dividends until after vesting or exercise, as applicable.

2019 Fiscal Year Performance Share Awards

On November 21, 2018, executives, including the Named Executive Officers, were granted awards of a target amount of performance shares. The actual number of shares that were ultimately earned, as well as the number of shares of common stock that would be distributed in settling those performance shares, was determined at the end of a three-year performance period starting on October 1, 2018 and ending on September 30, 2021, based on the relative total shareholder return (TSR) of the Company compared to the 2018 TSR Peer Group. The total number of performance shares earned and shares of common stock distributed could range from 0% to 200% of the target amount of performance shares granted to each participant. Participants are required to be employees at the end of the performance period to receive a payout, except in the event of death, disability or a change in control (in addition to other limited circumstances). Participants received shares equal to 86.11% of the performance share target award amount based upon the Company’s stock performance versus the stock of other companies in the TSR Peer Group.

The TSR Peer Group for the 2019 fiscal year performance share granted consisted of the following companies: Allegheny Technologies, Carpenter Technology, Commercial Metals, Howmet Aerospace Inc. (formerly named Arconic, Inc.); Insteel Industries, Kaiser Aluminum, Materion Corporation, Olympic Steel, and Universal Stainless & Alloy Products.

2021 Fiscal Year Grants

On November 24, 2020, executives, including the Named Executive Officers, were granted awards of time-based restricted stock. Participants must be employees at the end of the three year vesting period to have continuing rights to the awarded stock, except in the event of death, disability or a change in control (in addition to other limited circumstances).

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On November 24, 2020, executives, including the Named Executive Officers, were also granted awards of a target number of performance shares. The actual number of shares that may ultimately be earned, as well as the number of shares of common stock that may be distributed in settling those performance shares, will be determined at the end of a three-year performance period starting October 1, 2020 and ending September 30, 2023, based on the relative TSR of the Company compared to the 2021 TSR Peer Group. The total number of performance shares earned and shares of common stock distributed can range from 0% to 200% of the target amount of performance shares granted. Participants must be employees at the end of the performance period to receive a payout, except in the event of death, disability or a change in control (in addition to other limited circumstances).

Relative TSR compares the results of investing in common stock of the Company versus the stock of other companies in the TSR Peer Group, considering both the appreciation or depreciation in share price as well as the value of dividends distributed during the three-year time period. Share price is calculated at the beginning and end of the period using the average closing price for the twenty (20) business days immediately prior to the start of the performance period (October 1) and immediately prior to the end of the performance period (September 30).

The relative TSR performance metric for the fiscal 2021 to 2023 performance period is determined as follows:

	Haynes TSR Versus TSR Peer Group			Payout % of Target Award
	50th %ile to 100th %ile			2.0x Haynes Percentile Ranking
	30th %ile to 49th %ile			50% + (2.5x {Haynes Percentile Ranking—30%})
	<30th percentile			0.0%

The 2021 TSR Peer Group is comprised of the following companies: Allegheny Technologies Incorporated; Arconic Corporation; Carpenter Technology Corporation; Commercial Metals Company; Insteel Industries Inc.; Kaiser Aluminum Corporation; Materion Corporation; Olympic Steel, Inc.; and Universal Stainless & Alloy Products, Inc.

Benefits

The Named Executive Officers are eligible for the same level and offering of benefits made available to other employees, including the Company’s 401(k) plan (which provides for a matching contribution to be made by the Company), health care plan, life insurance plan and other welfare benefit programs. The Company pays premiums for life insurance for each of the Named Executive Officers and other executive officers. The Company’s benefits are designed to be competitive with other employers in the central/ northern Indiana region to enable it to compete for and retain employees.

In addition, the Company maintains the Haynes International, Inc. Pension Plan, a defined benefit pension plan for the benefit of certain eligible domestic employees, including certain of the Named Executive Officers who were hired prior to December 31, 2005. As of December 31, 2005, the Pension Plan was closed to new salaried employees and, as of December 31, 2007, the benefits of all salaried participants in the Pension Plan were frozen, and no further benefits will accumulate.

Perquisites

The Company historically provided limited perquisites to certain executives to allow those executives to increase their efficiency in business and community development opportunities. In recent years, the Company determined that those perquisites were not required and decided to eliminate them over time. All perquisites were eliminated before or during fiscal 2020. In fiscal 2021, no single perquisite exceeded $10,000 per person.

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Non-Qualified Deferred Compensation Plan

The Compensation Committee approved implementation of a non-qualified deferred compensation plan for independent directors and executive officers effective November 20, 2017. The plan provides the opportunity to defer current compensation and taxes until a future date, and to receive tax deferred investment returns on deferred amounts. The plan allows directors to defer up to 100% of their annual cash retainers and up to 100% of their annual equity grants. The plan allows eligible employees to defer up to 80% of their base salary, up to 100% of MIP and up to 100% of long term incentive awards.

CEO Compensation

The Company entered into an Employment Agreement on September 1, 2018, as amended, under which Mr. Shor agreed to serve as the President and Chief Executive Officer of the Company on a full-time basis for an initial term ending on September 30, 2020, provided that the initial employment term automatically extends for additional one-year periods commencing on October 1, 2020 and on each anniversary thereafter, unless the Board or Mr. Shor provides written notice to the other to the contrary at least 90 days prior to the end of the then current term.

Under the terms of Mr. Shor’s Employment Agreement, Mr. Shor is (a) entitled to receive a base salary at a rate of $637,500 per year, subject to adjustment as approved by the Compensation Committee (b) eligible to receive an annual bonus ranging from 40% to 120% of Mr. Shor’s base salary (with the target amount set at 80%), based upon the achievement by the Company of specific performance requirements measured over the Company’s fiscal year, as determined by the Compensation Committee, (c) eligible for grants of equity awards under the Company’s equity incentive plans in the sole and absolute discretion of the Board and (d) entitled to reimbursement for certain travel and relocation expenses. Mr. Shor is also entitled to participate in the Company’s benefit plans and programs provided to Company executives generally, subject to eligibility requirements and other terms and conditions of those plans. In addition, the Company must use reasonable efforts to secure term life insurance coverage for Mr. Shor in an amount not less than four times his annual salary, subject to certain stipulations. The September 1, 2018 Employment Agreement terminated Mr. Shor’s interim Employment Agreement, provided that the equity awards granted to Mr. Shor pursuant to his interim Employment Agreement dated May 29, 2018, remained outstanding on the terms of the relevant award agreements and, to the extent earned, Mr. Shor remained entitled to payment of the MIP bonus provided under the interim agreement. All of the incentive compensation payable pursuant to the September 1, 2018 Employment Agreement is subject to recoupment under the terms of the Company’s Clawback Policy.

Mr. Shor’s salary, as well as those of the other Named Executive Officers, was reduced by 10% as of April 2020. The salaries of the other Named Executive Officers were reinstated to their previous levels as of January 1, 2021, and Mr. Shor’s salary was reinstated to his previous salary as of April 1, 2021.

Tax Implications of the Compensation Committee’s Compensation Decisions

Section 162(m) of the Internal Revenue Code (“Code”) generally limits tax deductibility of compensation paid by a public company to its chief executive officer and certain other executive officers in any year to $1 million in the year compensation becomes taxable to the executive. Prior to the 2017 Tax Cuts and Jobs Act, certain compensation was exempt from the deduction limit to the extent it met the requirements to be considered “qualified performance-based compensation” as previously defined in Section 162(m). The 2017 Tax Cuts and Jobs Act eliminated that exemption. Certain arrangements entered into prior to November 2, 2017 are considered “grandfathered” and compensation paid under such arrangements will continue to be deductible until the arrangements are materially modified.

The Compensation Committee has historically considered Section 162(m) in the design of incentive plans to preserve the corporate tax deductibility of compensation. However, in light of the changes to Section 162(m), the Committee anticipates that a larger portion of future compensation paid to the Company’s NEOs will be subject to a tax deduction disallowance under Section 162(m). The Compensation Committee recognizes that factors other than tax deductibility should be considered in determining the forms and levels of executive compensation most appropriate and in the best interests of the Company and

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its stockholders. Annually, the Compensation Committee reviews all compensation programs and payments, including the tax impact on the Company.

Compensation Tables and Narrative Disclosure

The following tables, footnotes and narratives provide information regarding the compensation, benefits and equity holdings in the Company for the persons who acted as CEO, CFO and the other Named Executive Officers in fiscal 2021.

Summary Compensation Table

The narrative and footnotes below describe the total compensation disclosed in the below Summary Compensation Table for fiscal 2019, 2020 and 2021 to the Named Executive Officers. For information on the role of each element of compensation within the total compensation package, please see the discussion above under “Compensation Discussion and Analysis”.

Salary—This column represents the base salary earned during fiscal 2019, 2020 and 2021, including any amounts invested by the Named Executive Officers in the Company’s 401(k) plan. Base salary for fiscal 2020 and 2021 reflects the 10% reduction in salary effective as of April 2020 until January 2021.

Stock Awards—This column represents the fair value of the restricted stock and performance share grants, computed in accordance with FASB ASC Topic 718.

Option Awards—This column represents the compensation expense the Company recognized for financial statement reporting purposes, computed in accordance with Financial Accounting Standards Board ASC Topic 718, with respect to stock options granted in fiscal 2019, 2020 and 2021. For options issued in fiscal 2019, 2020 and 2021, compensation expense was calculated using a fair value methodology and recognized over the vesting period of the stock option.

Non-Equity Incentive Plan Compensation—This column represents cash bonuses earned in fiscal 2019, 2020 and 2021 by the Named Executive Officers under the 2019, 2020 and 2021 MIP.

Change in Pension Value and Nonqualified Deferred Compensation Earnings—This column represents the actuarial increase during fiscal 2019, 2020 and 2021 in the pension value for the Named Executive Officers under the Haynes International, Inc. Pension Plan. A description of the Pension Plan can be found below under “Pension Benefits”.

All Other Compensation—This column represents all other compensation paid or provided to the Named Executive Officers for fiscal 2019, 2020 and 2021 not reported in previous columns, such as the Company’s matching contributions to 401(k) plans, payment of insurance premiums and costs of providing certain limited perquisites and benefits.

Name and Principal Position	Year		Salary			Stock Awards(2)			Options(3)			Non-Equity Incentive Plan Compensation(4)			Change in Pension			All Other Comp(5)			Total
M. L. Shor(1)		2021		$	603,663		$	763,966		$	340,002		$	714,000			—		$	70,051		$	2,491,682
President & CEO		2020		$	606,750		$	1,049,958		$	339,964			—			—		$	46,459		$	2,043,131
		2019		$	579,616		$	718,341		$	659,292		$	352,971			—		$	108,898		$	2,419,118
D. W. Maudlin		2021		$	303,120		$	210,297		$	93,603		$	283,920			—		$	44,862		$	935,802
VP of Finance & CFO		2020		$	297,438		$	325,140		$	93,586			—		$	13,421		$	26,072		$	755,657
		2019		$	304,530		$	212,460		$	210,240		$	150,812		$	18,645		$	24,843		$	921,530
D. L. Strobel		2021		$	286,604		$	154,645		$	68,834		$	247,800			—		$	30,240		$	788,124
VP of Manufacturing		2020		$	281,039		$	270,864		$	68,828			—			—		$	22,514		$	643,244
		2019		$	279,903		$	151,744		$	209,072			—			—		$	14,893		$	655,612

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Name and Principal Position	Year		Salary			Stock Awards(2)			Options(3)			Non-Equity Incentive Plan Compensation(4)			Change in Pension			All Other Comp(5)			Total
V. R. Ishwar		2021		$	284,660		$	153,627		$	68,367		$	205,100		$	40,797		$	39,585		$	792,136
VP Marketing and Technology		2020		$	279,315		$	242,178		$	68,364			—		$	117,399		$	26,684		$	733,940
		2019		$	285,865		$	154,979		$	185,476		$	108,782		$	142,969		$	34,905		$	912,976
M. C. Losch III		2021		$	277,888		$	149,405		$	66,499		$	239,400			—		$	40,552		$	773,744
VP Sales and Distribution		2020		$	271,615		$	265,753		$	66,490			—		$	65,173		$	30,885		$	699,916
		2019		$	274,867		$	149,016		$	207,905		$	104,598		$	93,517		$	33,972		$	863,875

(1)

Mr. Shor became interim President and Chief Executive Officer on May 29, 2018 and became permanent President and Chief Executive Officer on September 1, 2018.

(2)

The amounts listed in the table include restricted stock and performance share awards (PSA’s) as valued in accordance with FASB ACS Topic 718. PSA’s are valued based on the target number of share awards at grant date which is less than the maximum potential share awards that may be granted at the end of the performance period. If the maximum number of share awards is granted, the stock award amount granted in fiscal 2021 will be $1,187,924 for M. Shor, $326,999 for D. Maudlin, $240,464 for D. Strobel, $232,317 for M. Losch III, and $238,882 for V. Ishwar.

(3)

The options issued in fiscal 2019, 2020 and 2021 were valued pursuant to FASB ASC Topic 718 using a fair value methodology.

(4)

No amounts were earned in fiscal 2020 under the 2020 MIP. Please see the discussion of the MIP under “Compensation Discussion and Analysis”.

(5)

Amounts shown in the “All Other Compensation” column include the following:

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Name	Year		Dividends On Restricted Stock			Life Insurance			Disability Insurance			401(k) Company Match			401(m) Company Match			Other			Total
M. L. Shor		2021		$	46,168		$	3,960		$	8,166		$	11,757			—			—		$	70,051
		2020		$	22,062		$	3,960		$	8,697		$	11,740			—			—		$	46,459
		2019		$	12,544		$	3,960		$	6,368		$	13,480		$	2,326		$	70,220(1)		$	108,898
D. W. Maudlin		2021		$	25,935		$	2,191		$	6,155		$	10,581			—			—		$	44,862
		2020		$	8,534		$	2,135		$	5,657		$	9,746			—			—		$	26,072
		2019		$	6,792		$	2,196		$	5,497		$	10,358			—			—		$	24,843
D. L. Strobel		2021		$	12,605		$	2,072		$	5,246		$	10,318			—			—		$	30,240
		2020		$	5,640		$	2,020		$	4,870		$	9,984			—			—		$	22,514
		2019		$	2,572		$	1,764		$	1,623		$	8,934			—			—		$	14,893
V. R. Ishwar		2021		$	20,757		$	2,057		$	6,523		$	10,248			—			—		$	39,585
		2020		$	6,655		$	2,005		$	6,045		$	9,579			—		$	2,400		$	26,684
		2019		$	5,578		$	2,059		$	5,886		$	9,536		$	204		$	11,642		$	34,905
M.C. Losch III		2021		$	21,616		$	2,002		$	6,966		$	9,968			—			—		$	40,552
		2020		$	6,787		$	1,951		$	6,452		$	11,436			—		$	4,259		$	30,885
		2019		$	5,380		$	1,980		$	6,281		$	5,668		$	2,133		$	12,530		$	33,972

(1)

Included, in the case of Mr. Shor only, relocation expenses of $68,013 as well as rent reimbursement of $2,206.

Grants of Plan-Based Awards in Fiscal 2021

During fiscal 2021, the Named Executive Officers received four types of plan-based awards:

Management Incentive Plan—On November 24, 2020, the Named Executive Officers were awarded grants under the Company’s 2020 MIP. Under the plan, certain employees of the Company, including the Named Executive Officers, were eligible for cash awards if the Company met certain net income targets established by the Compensation Committee for fiscal 2021. The amount of the cash awards could range between 40% and 120% of base salary for Mr. Shor, 25% and 75% of base salary for Messrs. Ishwar and Losch; 32.5% and 97.5% for Mr. Maudlin and 30% and 90% for Mr. Strobel, depending on the level of net income earned or operating cash flow generated by the Company compared to the targeted amounts.

Stock Options—Non-qualified options were granted to the Named Executive Officers on November 24, 2020 under the Haynes International, Inc. 2020 Incentive Compensation Plan. Each option vests in three equal installments on the first, second and third anniversaries of the grant date, remains exercisable for ten years and has an exercise price equal to the closing stock price on the trading day prior to the date of grant.

Restricted Stock—On November 24, 2020, executives, including the Named Executive Officers, were granted restricted stock under the Haynes International, Inc. 2020 Incentive Compensation Plan which are subject to time-based vesting and will vest on the third anniversary of the date of grant, if the participant is then employed by the Company, except in the event of death, disability or a change in control and certain other circumstances.

Performance Share Awards—On November 24, 2020, executives, including the Named Executive Officers, were granted awards of a target amount of performance shares. The actual number of performance shares that may ultimately be earned, as well as the number of shares of common stock that may be distributed in settling those performance shares, are determined at the end of a three-year performance period and will depend on the calculated total shareholder return of the Company at the end of the performance period as compared to the total shareholder return of a peer group of ten companies. The total performance shares earned and shares of common stock distributed can range from 0% to 200% of the target amount granted. Participants must be employees at the end of the performance period to receive a payout, except in the event of death, disability or a change in control and certain other circumstances.

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Grants of Plan-Based Awards Table

Name and Principal Position	Grant Type	Date		Estimated Future Pay Under MIP. Plan									Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock		All Other Options		Ex or Base Price of Option(2)			Grant Date FV of Stock & Option(3)
Name and Principal Position	Grant Type	Date		Threshold			Target			Max			Threshold		Target		Max		All Other Stock		All Other Options		Ex or Base Price of Option(2)			Grant Date FV of Stock & Option(3)
M. L. Shor	MIP		11/24/20		$	255,000		$	510,000		$	765,500
	Option		11/24/20																			57,530		$	22.64		$	340,002
	Restr. Stock-Time based		11/24/20																	15,018							$	340,008
	Performance Share Awards(1)		11/24/20											—		15,018		30,036		—							$	423,958
D. Maudlin	MIP		11/24/20		$	101,400		$	202,800		$	304,200
	Option		11/24/20																			15,838		$	22.64		$	93,603
	Restr. Stock-Time based		11/24/20																	4,134							$	93,594
	Performance Share Awards(1)		11/24/20											—		4,134		8,268									$	116,703
D. L. Strobel	MIP		11/24/20		$	88,500		$	177,000		$	265,500
	Option		11/24/20																			11,647		$	22.64		$	68,834
	Restr. Stock-Time based		11/24/20																	3,040							$	68,826
	Performance Share Awards(1)		11/24/20											—		3,040		6,080									$	85,819
V. R. Ishwar	MIP		11/24/20		$	73,250		$	146,500		$	219,750
	Option		11/24/20																			11,568		$	22.64		$	68,367
	Restr. Stock-Time based		11/24/20																	3,020							$	68,373
	Performance Share Awards(1)		11/24/20											—		3,020		6,040									$	85,255
M. C. Losch III	MIP		11/24/20		$	85,500		$	171,000		$	256,500
	Option		11/24/20																			11,252		$	22.64		$	66,499
	Restr. Stock-Time based		11/24/20																	2,937							$	66,494
	Performance Share Awards(1)		11/24/20											—		2,937		5,874									$	82,912

(1)

Target number of performance shares that have not vested. This column represents the target number of performance share to be earned over a three-year performance period and settled in shares of common stock.

(2)

The exercise price of each option is equal to the closing market price of shares of common stock on the trading day prior to the grant date.

(3)

Represents the grant date fair value calculated in accordance with FASB ASC Topic 718, but excludes any forfeiture assumptions related to service-based vesting conditions as prescribed by SEC rules.

Outstanding Equity Awards at Fiscal Year-End

The table below provides information on the Named Executive Officers’ outstanding equity awards as of September 30, 2021. The equity awards consist of stock options, shares of restricted stock (with time-based vesting) and performance share awards. The table includes the following:

Number of Securities Underlying Unexercised Options (Exercisable)—This column represents options to buy shares of common stock which are fully vested and subject to forfeiture only with respect to a break in service.

Number of Securities Underlying Unexercised Options (Unexercisable)—This column represents options to buy shares of common stock which are not fully vested. All options vest in three equal annual installments on the first, second and third anniversaries of the grant date.

Option Exercise Price—All outstanding option exercise prices are equal to the closing market price of shares of common stock on the day prior to grant date.

Option Expiration Date—This is the date upon which an option will expire if not yet exercised by the option holder. In all cases, this is ten years from the date of grant.

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Number of Shares or Units of Stock that Have Not Vested and Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested—All shares of restricted stock and performance share awards granted to the Named Executive Officers in fiscal 2021 are unvested.

Market Value of Shares or Units of Stock that Have Not Vested and Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested—The market value of unvested shares of restricted stock is based upon the September 30, 2021 closing price of the Company’s common stock of $37.25 and is calculated in accordance with FASB ASC Topic 718.

	Option Awards											Restricted Stock Awards					Performance Share Awards
Name	Grant Date		Number of securities underlying unexercised options (Exercisable)(1)		Number of securities underlying unexercised options (Unexercisable)		Option Exercise Price			Option Expiration Date		Number of Shares that Have Not Vested		Market Value of Shares That Have Not Vested			Number of Awards Not Vested(4)		Market Value of Shares that Have Not Vested
M. L. Shor		06/01/18		15,000		—		$	42.58		06/01/28							—			—
		11/21/18		19,435		9,717		$	33.98		11/21/28		9,105(2)		$	339,161		—			—
		05/24/19(a)		8,889		4,444		$	30.54		05/24/29		—			—		—			—
		05/24/19(b)		9,795		4,898		$	33.59		05/24/29		—			—		—			—
		05/24/19(c)		10,757		5,379		$	36.65		05/24/29		—			—		—			—
		11/19/19		11,731		23,462		$	37.00		11/19/29		9,191(2)		$	342,365		9,188		$	294,718
		9/15/20		—		—							8,250(3)		$	307,313		—			—
		11/24/20		—		57,530		$	22.64		11/24/30		15,018(2)		$	559,421		15,018		$	870,210
D. W. Maudlin		11/25/11		1,200		—		$	55.88		11/25/21		—			—		—			—
		11/20/12		3,300		—		$	47.96		11/20/22		—			—		—			—
		11/26/13		4,000		—		$	52.78		11/26/23		—			—		—			—
		11/25/14		7,500		—		$	46.72		11/25/24		—			—		—			—
		11/24/15		7,300		—		$	37.75		11/24/25		—			—		—			—
		11/22/16		4,800		—		$	40.86		11/22/26		—			—		—			—
		11/21/17		5,800		—		$	31.76		11/21/27		—			—		—			—
		11/21/18		5,749		2,874		$	33.98		11/21/28		2,693(2)		$	100,314		—			—
		05/24/19(a)		3,016		1,508		$	30.54		05/24/29		—			—		—			—
		05/24/19(b)		3,323		1,662		$	33.59		05/24/29		—			—		—			—
		05/24/19(c)		3,650		1,825		$	36.65		05/24/29		—			—		—			—
		11/19/19		3,229		6,459		$	37.00		11/19/29		2,530(2)		$	94,243		2,529		$	81,121
		9/15/20		—		—							3,250(3)		$	121,063		—			—
		11/24/20		—		15,838		$	22.64		11/24/30		4,134(2)		$	153,992		4,134		$	239,542
D. L. Strobel		09/17/18		5,000		—		$	35.34		9/17/28		—			—		—			—
		11/21/18		4,105		2,052		$	33.98		11/21/28		1,923(2)		$	71,632		—
		05/24/19(a)		3,651		1,825		$	30.54		05/24/29		—			—		—			—
		05/24/19(b)		4,023		2,012		$	33.59		05/24/29		—			—		—			—
		05/24/19(c)		4,418		2,209		$	36.65		05/24/29		—			—		—			—
		11/19/19		2,375		4,750		$	37.00		11/19/29		1,861(2)		$	69,322		1,860		$	59,662
		9/15/20		—									3,250(3)		$	121,063		—
		11/24/20		—		11,647		$	22.64		11/24/30		3,040(2)		$	113,240		3,040		$	176,151
V. R. Ishwar		11/25/11		1,900		—		$	55.88		11/25/21		—			—		—			—
		11/20/12		3,500		—		$	47.96		11/20/22		—			—		—			—
		11/26/13		4,000		—		$	52.78		11/26/23		—			—		—			—
		11/25/14		7,200		—		$	46.72		11/25/24		—			—		—			—
		11/24/15		7,100		—		$	37.75		11/24/25		—			—		—			—

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	Option Awards											Restricted Stock Awards					Performance Share Awards
Name	Grant Date		Number of securities underlying unexercised options (Exercisable)(1)		Number of securities underlying unexercised options (Unexercisable)		Option Exercise Price			Option Expiration Date		Number of Shares that Have Not Vested		Market Value of Shares That Have Not Vested			Number of Awards Not Vested(4)		Market Value of Shares that Have Not Vested
		11/22/16		4,200		—		$	40.86		11/22/26		—			—		—			—
		11/21/17		5,050		—		$	31.76		11/21/27		—			—		—			—
		11/21/18		4,193		2,096		$	33.98		11/21/28		1,964(2)					73,159			—
		05/24/19(a)		3,016		1,508		$	30.54		05/24/29		—			—		—			—
		05/24/19(b)		3,323		1,662		$	33.59		05/24/29		—			—		—			—
		05/24/19(c)		3,650		1,825		$	36.65		05/24/29		—			—		—			—
		11/19/19		2,359		4,718		$	37.00		11/19/29		1,848(2)		$	68,838		1,848		$	59,277
		9/15/20		—									2,500(3)		$	93,125		—
		11/24/20		—		11,568		$	22.64		11/24/30		3,020(2)		$	112,495		3,020		$	174,992
M. C. Losch II		11/25/11		1,900		—		$	55.88		11/25/21		—			—		—			—
		11/20/12		3,400		—		$	47.96		11/20/22		—			—		—			—
		11/26/13		4,000		—		$	52.78		11/26/23		—			—		—			—
		11/25/14		7,200		—		$	46.72		11/25/24		—			—		—			—
		11/24/15		6,900		—		$	37.75		11/24/25		—			—		—			—
		11/22/16		4,025		—		$	40.86		11/22/26		—			—		—			—
		11/21/17		4,850		—		$	31.76		11/21/27		—			—		—			—
		11/21/18		4,031		2,016		$	33.98		11/21/28		1,889(2)		$	70,365		—			—
		05/24/19(a)		3,651		1,825		$	30.54		05/24/29		—			—		—			—
		05/24/19(b)		4,023		2,012		$	33.59		05/24/29		—			—		—			—
		05/24/19(c)		4,418		2,209		$	36.65		05/24/29		—			—		—			—
		11/19/19		2,294		4,589		$	37.00		11/19/29		1,798(2)		$	66,976		1,797		$	57,641
		9/15/20		—									3,250(3)		$	121,063		—
		11/24/20		—		11,252		$	22.64		11/24/30		2,937(2)		$	109,403		2,937		$	170,183

(1)

Except as noted, vest in three equal annual installments on the first, second and third anniversaries of the grant date.

(2)

Vest on the third anniversary of the grant date.

(3)

Vested in two equal annual installments on the first and second anniversaries of the grant date.

(4)

Vest on the third anniversary of the grant date if the Company has met a relative total shareholder return goal.

Option Exercises and Stock Vested

The following table provides information concerning the exercise of stock options and vesting of restricted stock awards for the Named Executive Officers in fiscal 2021.

Option Exercises and Stock Vested

The following table provides information concerning the exercise of stock options and vesting of restricted stock awards for the Named Executive Officers in fiscal 2021.

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	Option Awards					Stock Awards					Performance Share Awards
Name	Number of Shares Acq. on Exercise		Value realized on Exercise			Number of Shares Acq. on Vesting		Value realized on Vesting(1)			Number of Shares Acq. on Vesting		Value realized on Vesting
M. L. Shor		—		$	—		8,250		$	311,933		7,838		$	291,966
D. W. Maudlin		—		$	—		6,100		$	187,350		2,318		$	86,346
D. L. Strobel		—		$	—		4,250		$	159,453		1,656		$	61,686
V. R. Ishwar		—		$	—		5,000		$	151,075		1,691		$	62,990
M. C. Losch III		—		$	—		5,650		$	177,171		1,626		$	60,569

(1)

This column is calculated by multiplying the number of shares acquired by the closing price of a share of Common Stock on the vesting date. The Named Executive Officers had the following stock awards vest in fiscal 2021:

Name	Type of Award		Vesting Date		Number of Shares Acquired on Vesting (#)		Closing Price on Vesting Date ($/Share)			Value Realized on Vesting ($)
M.L. Shor		Time-BasedRestrictedStock		—		—			—			—
		Time-BasedRestrictedStock		9/15/2021		8,250		$	37.81		$	311,933
D.W. Maudlin		Time-BasedRestrictedStock		11/21/2020		2,850		$	22.62		$	64,467
		Time-BasedRestrictedStock		9/15/2021		3,250		$	37.81		$	122,833
D.L. Strobel		Time-BasedRestrictedStock		—		—			—			—
		Time-BasedRestrictedStock		9/15/2021		3,250		$	37.81		$	122,833
		Time-BasedRestrictedStock		9/17/2021		1,000		$	36.57		$	36,570
V.R. Ishwar		Time-BasedRestrictedStock		11/21/2020		2,500		$	22.62		$	56,550
		Time-BasedRestrictedStock		9/15/2021		2,500		$	37.81		$	94,525
M.C. Losch II		Time-BasedRestrictedStock		11/21/2020		2,400		$	22.62		$	54,288
		Time-BasedRestrictedStock		9/15/2021		3,250		$	37.81		$	122,883

Pension Benefits

The Company maintains a defined benefit pension plan for the benefit of eligible domestic employees designated as the Haynes International, Inc. Pension Plan. The pension plan is qualified under Section 401 of the Internal Revenue Code, permitting the Company to deduct for federal income tax purposes all amounts the Company contributes to the pension plan pursuant to funding requirements. The following table sets forth the present value of accumulated benefits payable in installments after retirement, based on retirement at age 65. As of December 31, 2005, the Pension Plan was closed to new salaried employees and, as of December 31, 2007, the benefits of all salaried participants in the Pension Plan were frozen, and no further benefits will accumulate. No payments were made to any of the Named Executive Officers pursuant to the Pension Plan in fiscal 2021.

	Year		Plan Name		Number of Years Credited Service		Present Value of Accumulated Benefit
M. L. Shor		2021		DefinedBenefit		N/A			—
D. W. Maudlin		2021		DefinedBenefit		3		$	89,018
D. L. Strobel		2021		DefinedBenefit		N/A			—
V. R. Ishwar		2021		DefinedBenefit		26		$	982,529
M. C. Losch III		2021		DefinedBenefit		20		$	575,950

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Participants in the pension plan are eligible to receive an unreduced pension annuity upon the first to occur of (i) reaching age 65, (ii) reaching age 62 and completing ten years of benefit service or (iii) completing 30 years of benefit service. The final option is available only for salaried employees who were plan participants in the pension plan on March 31, 1987. For salaried employees who retire on or after July 2, 2002 under option (i) or (ii) above, the normal monthly pension benefit provided under the pension plan is the greater of (i) 1.6% of the employee’s average monthly earnings multiplied by years of benefit service, plus an additional 0.5% of the employee’s average monthly earnings, if any, in excess of Social Security covered compensation multiplied by years of benefit service up to 35 years, or (ii) the employee’s accrued benefits as of September 30, 2002. For salaried employees who retire on or after July 2, 2002 under option (iii) above (with 30 years of benefit service), the normal monthly pension provided under the pension plan is equal to one of the following as elected by the participant: (i) the accrued benefit as of March 31, 1987 plus any supplemental retirement benefit payable to age 62; (ii) the accrued benefit as of March 31, 1987 plus any supplemental retirement benefit payable to any age elected by the participant (prior to 62) and thereafter the actuarial equivalent of the benefit payable for retirement under options (i) and (ii) above; or (iii) if the participant is at least age 55, the actuarial equivalent of the benefit payable for retirement under options (i) and (ii) above. There are provisions for delayed retirement, early retirement benefits, disability retirement, death benefits, optional methods of benefits payments, payments to an employee who leaves after five or more years of service and payments to an employee’s surviving spouse. Participants’ interests are vested and they are eligible to receive pension benefits after completing five years of service. However, all participants as of October 1, 2001 became 100% vested in their benefits on that date. Vested benefits are generally paid to retired employees beginning at or after age 55.

In addition, the Company’s 2020 Incentive Compensation Plan provides for the vesting of restricted stock, restricted stock units, performance shares and performance units in the case of “retirement” or involuntary severance of service other than for “cause” or other terminations of employment not specifically covered in the 2020 Plan. During fiscal 2021, time-based restricted stock was granted under the 2020 Plan, and one of the Named Executive Officers was retirement-eligible. Had a Named Executive Officer’s employment been terminated on September 30, 2021 involuntarily for any reason other than “cause” or other terminations of employment not specifically covered in the 2020 Plan, the restricted stock granted to such Named Executive Officer on November 24, 2020 would have vested as of that termination date.

Non-Qualified Deferred Compensation Plan

The Compensation Committee approved implementation of a non-qualified deferred compensation plan for independent directors and executive officers effective November 20, 2017. The plan provides the opportunity to defer current compensation and taxes until a future date, and to receive tax deferred investment returns on deferred amounts. The plan allows directors to defer up to 100% of their annual cash retainer, annual committee cash retainers and annual equity grants. The plan allows eligible employees to defer up to 80% of their base salaries, up to 100% of MIP and up to 100% of long term incentive awards.

Mr. Shor deferred 2,650 shares in 2017 while serving as an independent director.

Executive			Executive Contributions in 2021						Haynes Contributions in 2021						Aggregate Earnings from Deferred Shares in 2021						Aggregate Withdrawals Distributions in 2021						Aggregate Balance at 09/30/2021
M.L. Shor					—						—					$	55,756						—					$	108,041

Potential Payments Upon Termination of Employment

As described in this Compensation Discussion and Analysis, Mr. Shor has an Employment Agreement, and the other Named Executive Officers have termination benefits agreements, that provide for payments to the Named Executive Officers at, following or in connection with a termination of their employment in the circumstances described in those agreements.

Conditions and Obligations Applicable to Receipt of Termination Payments Under All Circumstances

Under the applicable compensation agreements, each Named Executive Officer has agreed not to compete with, or solicit the employees of, the Company during and for a one-year period (two years for

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Mr. Shor) after termination of employment. Further, each Named Executive Officer is obligated to maintain the confidentiality of Company information and to assign all inventions, improvements, discoveries, designs, works of authorship, concepts or ideas or expressions thereof to the Company. The Company is entitled to cease making payments or providing benefits due under the applicable agreement if the Named Executive Officer breaches the confidentiality, non-competition or non-solicitation provisions of the agreement.

As a condition to the receipt of the payments and other benefits to be received by the Named Executive Officers under the applicable agreements upon termination of employment, each Named Executive Officer must execute and deliver to the Company a release of all claims against the Company, including claims arising out of his or her employment with the Company. Certain payments to Mr. Shor are required to be made or commence on the date that the release executed by him in connection with the termination of his employment becomes effective (generally seven days following execution thereof by Mr. Shor). In addition to the release, Named Executive Officers may be asked to sign letter agreements reaffirming their applicable confidentiality, non-competition and non-solicitation obligations and may enter into extended non-competition agreements with the Company.

Payments Made Upon Death or Disability

Upon death or total disability, the Company’s compensation plans and arrangements for the Named Executive Officers provide as follows:

•

Each Named Executive Officer, or his or her heirs, estate, personal representative or legal guardian, as appropriate, is entitled to receive a lump sum payment equal to the sum of (i) the Named Executive Officer’s earned but unpaid base salary and bonus through the termination date; (ii) any reimbursable expenses incurred by the Named Executive Officer and not reimbursed as of the termination date and (iii) a bonus for the fiscal year in which the termination date occurs in an amount equal to his or her target bonus for such fiscal year pro-rated based upon the number of days he or she worked in the fiscal year in which the termination date occurs.

•

All unvested stock options held by the Named Executive Officer will vest immediately and all options will remain exercisable for six months from the termination date in the case of options granted under the 2009 Restricted Stock Plan or five years in the case of options granted under the 2016 or 2020 Incentive Compensation Plans, but in no event later than the expiration date of such stock options as specified in the applicable option agreement.

•

All restrictions on transfer of any shares of restricted stock held by the Named Executive Officer on the termination date, including vesting conditions, will lapse as of the termination date and performance-based restricted stock and performance shares will be deemed earned in the case of performance shares at target level, so long as the Named Executive Officer has been continuously employed by the Company between the grant date and the termination date.

•

In the case of death, the Named Executive Officer’s designated beneficiary is entitled to receive the death benefit under a Company-provided life insurance policy in the amount of the Named Executive Officer’s base salary (four times base salary for Mr. Shor).

•

In the case of total disability, the Named Executive Officer will be entitled to disability benefits under the Company’s executive long-term disability plans. Each Named Executive Officer is entitled to disability benefits under a group plan and an individual plan. The group plan provides for a monthly benefit equal to 50% of monthly base salary, subject to a maximum benefit of $10,000 per month. The individual plan provides for a monthly benefit equal to 70% of monthly base salary, subject to a maximum benefit of $5,000 per month. Benefits under the plan are payable monthly beginning 90 days after the employee becomes disabled and continuing until age 65.

Potential Payments Upon Termination In Connection With A Change of Control

The information below generally describes payments or benefits payable to the Named Executive Officers (including Mr. Shor) under agreements between the Named Executive Officers and the Company or under the Company’s compensation plans and arrangements in the event of a change of control of the Company or the termination of the Named Executive Officer’s employment, whether prior to or following a

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change of control of the Company. Any such payments or benefits that a Named Executive Officer has elected to defer would be provided in accordance with the requirements of Internal Revenue Code Section 409A. Payments or benefits under other plans and arrangements that are generally available to the Company’s employees on similar terms are not described. Certain capitalized terms used in this discussion are defined under the caption “Certain Definitions” below.

In the case of all Named Executive Officers, the Company’s 2009 Restricted Stock Plan and the 2016 and 2020 Incentive Compensation Plans provide that all restrictions imposed on shares of restricted stock subject to restricted stock awards under the plan, including vesting conditions, lapse upon a change of control and performance based restricted stock and performance shares will be deemed earned, in the case of performance shares, at target level. Similarly, all unvested stock options issued pursuant to the Company’s stock option plans vest automatically upon the occurrence of a “change of control” (as defined below), provided that an Award shall be treated, to the extent determined by the Committee to be appropriate and permitted under Section 409A of the Code, in accordance with one of the following methods as determined by the Committee in its sole discretion: (i) upon at least ten (10) days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per Share received or to be received by other stockholders of the Company in the event or (ii) provide for the assumption of or the issuance of substitute awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted under the Plan. In addition, in the case of all Named Executive Officers, upon termination in connection with a change of control as described in this section, the maximum compensation that any such Named Executive Officer would be entitled to receive is equal to the greater of (i) the safe harbor amount under Section 280G of the Internal Revenue Code, as amended, or (ii) the total change of control compensation to which such individual is entitled under the applicable agreement less any excise tax payable under Section 4999 of the Internal Revenue Code, as amended.

In the event that the employment of a Named Executive Officer (other than Mr. Shor) is terminated by the Company without “cause” (as defined below) or by the Named Executive Officer for “good reason” (as defined below) within 12 months following a change of control,

•

The Named Executive Officer is entitled to receive a lump sum cash payment equal to the sum of (i) the Named Executive Officer’s earned but unpaid base salary through the termination date; (ii) the Named Executive Officer’s base salary that would be payable for the period from the termination date through the first anniversary thereof; (iii) any accrued but unpaid compensation, including any unpaid bonus compensation; and (iv) any reimbursable expenses incurred by the Named Executive Officer and not reimbursed as of the termination date.

•

The Named Executive Officer is entitled to a bonus for the fiscal year in which termination occurs equal to the Named Executive Officer’s target bonus, calculated as if one hundred percent of the target amount had been earned, subject to proration based upon the number of days worked during the applicable fiscal year.

•

Any unvested stock options held by the Named Executive Officer will vest immediately and all options will remain exercisable for one year from the termination date, but in no event later than the expiration date of such stock options as specified in the applicable option agreement.

•

The Named Executive Officer and his or her dependents may be entitled to elect medical, hospitalization and dental insurance benefits that he or she received immediately prior to termination for a period of one year following the termination date, unless the Named Executive Officer obtains comparable benefits from another employer.

•

The Named Executive Officer is entitled to receive a lump sum cash payment in an amount equal to the cost the Company would have incurred for non-voluntary life insurance coverage under its life insurance plan for the twelve months following the termination date in excess of the then current aggregate premium or other amount payable generally by similarly situated plan participants for such coverage and an additional amount equal to the taxes on such payment.

If Mr. Shor’s employment is terminated by the Company without “cause” or by Mr. Shor for “good reason” prior to or within 24 months after a change of control,

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•

Mr. Shor is entitled to a bonus for the fiscal year in which termination occurs equal to his target bonus, calculated as if one hundred percent of the target amount had been earned, subject to proration based upon the number of days worked during the applicable fiscal year.

•

Mr. Shor is entitled to a cash payment equal to two times his annual salary as in effect immediately prior to the termination date, payable in equal monthly installments of one-twenty- fourth of the total amount of the cash payment.

•

Any unvested stock options held by Mr. Shor as of the termination date will become vested and exercisable and will remain exercisable after the termination date for a period equal to the lesser of (i) one year following the termination date or (ii) the expiration of the original exercise period of such option.

•

Mr. Shor and his dependents are entitled to medical, hospitalization and life insurance benefits that he received immediately prior to termination through and including the termination date.

Payments Upon Termination Not Related to a Change of Control

If the employment of any of the Named Executive Officers is terminated by the Company for “cause”, or is terminated by the Named Executive Officer without “good reason”, the Named Executive Officer would be entitled to receive a lump sum cash payment equal to the sum of (i) the Named Executive Officer’s earned but unpaid base salary through the termination date; (ii) any accrued but unpaid compensation, including any unpaid bonus compensation and (iii) any reimbursable expenses or permitted health and welfare expenses incurred by the Named Executive Officer and not reimbursed as of the termination date.

If, prior to or more than 24 months after a change of control, Mr. Shor’s employment is terminated by the Company without “cause” or by Mr. Shor for “good reason”:

•

Mr. Shor is entitled to receive a lump sum payment equal to the sum of (i) his earned but unpaid base salary through the termination date; (ii) any bonus earned prior to the termination date that remains unpaid on the termination date; (iii) any reimbursable expenses incurred by Mr. Shor and not reimbursed as of the termination date and (iv) if not otherwise included above, an amount equal to his target bonus for such fiscal year prorated based upon the number of days he worked during the fiscal year. He would also be entitled to continuation of health and welfare benefits through the termination date.

•

Mr. Shor is entitled to a continuation of his annual salary as in effect immediately prior to such termination date through the end of the then current employment term, payable in accordance with the then prevailing payroll practices of the Company.

•

All unvested stock options held by Mr. Shor will terminate immediately and all vested options will remain exercisable for six months from the termination date but in no event later than the expiration date of such stock options as specified in the applicable option agreement.

If, prior to or more than 12 months after any change of control, the employment of any Named Executive Officer (other than Mr. Shor) is terminated by the Company without “cause” or is terminated by the Named Executive Officer with “good reason”:

•

Each Named Executive Officer, or his or her heirs, estate, personal representative or legal guardian, as appropriate, is entitled to receive a lump sum payment equal to the sum of (i) the Named Executive Officer’s earned but unpaid base salary and bonus through the termination date; (ii) any reimbursable expenses incurred by the Named Executive Officer and not reimbursed as of the termination date; (iii) a bonus for the fiscal year in which the termination date occurs in an amount equal to his target bonus for such fiscal year pro-rated based upon the number of days he or she worked in the fiscal year in which the termination date occurs.

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•

All unvested stock options held by the Named Executive Officer will terminate immediately and all vested options will remain exercisable for six months from the termination date but in no event later than the expiration date of such stock options as specified in the applicable option agreement.

Certain Definitions

A termination for “cause”, as defined in the Termination Benefits Agreements and Mr. Shor’s Employment Agreement, means a termination by reason of the good faith determination of the Company’s Board of Directors that the Named Executive Officer (1) continually failed to substantially perform his duties to the Company (other than a failure resulting from his medically documented incapacity due to physical or mental illness), including, without limitation, repeated refusal to follow the reasonable directions of the Company’s Chief Executive Officer (or, in Mr. Shor’s case, the Board), knowing violation of the law in the course of performance of his duties with the Company, repeated absences from work without a reasonable excuse or intoxication with alcohol or illegal drugs while on the Company’s premises during regular business hours, (2) engaged in conduct which constituted a material breach of the confidentiality, non-competition or non-solicitation provisions of the applicable agreement, (3) was indicted (or equivalent under applicable law), convicted of or entered a plea of nolo contendere to the commission of a felony or crime involving dishonesty or moral turpitude, (4) engaged in conduct which is demonstrably and materially injurious to the financial condition, business reputation, or otherwise of the Company or its subsidiaries or affiliates or (5) perpetuated a fraud or embezzlement against the Company or its subsidiaries or affiliates, and in each case the particular act or omission was not cured, if curable, in all material respects by the Named Executive Officer within thirty (30) days (or by Mr. Shor within 15 days) after receipt of written notice from the Board. Under the 2020 Incentive Compensation Plan, the term “cause” is defined by reference to the Termination Benefits Agreements, in the case of the Named Executive Officers other than Mr. Shor, and, in Mr. Shor’s case, by reference to his Employment Agreement.

The term “change of control” has varying definitions under the different plans and agreements, but generally means the first to occur of the following: (i) any person becomes the beneficial owner, directly or indirectly, of securities of the Company representing a majority of the combined voting power of the Company’s then outstanding securities (assuming conversion of all outstanding non-voting securities into voting securities and the exercise of all outstanding options or other convertible securities); (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the effective date, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2∕3) of the directors then still in office who either were directors on the effective date or whose appointment, election or nomination for election was previously so approved or recommended; (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, a majority of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing a majority of the combined voting power of the Company’s then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, or to an entity a majority of the combined voting power of the voting securities of which is owned by substantially all of the stockholders of the Company immediately prior to such sale in substantially the same proportions as their ownership of the Company immediately prior to such sale.

The term “good reason” means the occurrence of any of the following actions or failures to act if it is not consented to by the Named Executive Officer in writing: (a) a material adverse change in the Named Executive Officer’s duties, reporting responsibilities, titles or elected or appointed offices; (b) a material

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reduction by the Company in the Named Executive Officer’s base salary or annual bonus opportunity, not including any reduction resulting from changes in the market value of securities or other instruments paid or payable to the Named Executive Officer; or (c) solely with respect to Mr. Shor, any change of more than 50 miles in the location of the principal place of Mr. Shor’s employment. None of the actions described in clauses (a) and (b) above shall constitute “good reason” if it was an isolated and inadvertent action not taken in bad faith by the Company and if it is remedied by the Company within 30 days after receipt of written notice thereof given by the Named Executive Officer (or, if the matter is not capable of remedy within 30 days, then within a reasonable period of time following such 30-day period, provided that the Company has commenced such remedy within said 30-day period); provided that “good reason” ceases to exist for any action described in clauses (a) and (b) above on the 60th day following the later of the occurrence of such action or the Named Executive Officer’s knowledge thereof, unless the Named Executive Officer has given the Company written notice thereof prior to such date.

Quantification of Payments and Benefits

The following tables quantify the potential payments and benefits upon termination or a change of control of the Company for each of the Named Executive Officers assuming the Named Executive Officer’s employment terminated on September 30, 2021, given the Named Executive Officer’s compensation and service level as of that date and, if applicable, based on the Company’s closing stock price of $37.25 on that date. Other assumptions made with respect to specific payments or benefits are set forth in applicable footnotes to the tables. Information regarding the present value of pension benefits for each of the Named Executive Officers is set forth above under the caption “Pension Benefits” on page 36. Due to the number of factors that affect the nature and amount of any payments or benefits provided upon a termination or change of control, including, but not limited to, the date of any such event, the Company’s stock price and the Named Executive Officer’s age, any actual amounts paid or distributed may be different. None of the payments set forth below would be grossed-up for taxes.

M. L. Shor

Executive Benefits and Payments Upon Termination	Death			Disability			Voluntary or For Cause Term.		Invol. Term. Not for Cause or Term. for Good Reason			Change of Control
Performance-based Cash Payment(1)		$	510,000		$	510,000		—		$	510,000		$	510,000(3)
Cash Severance			—			—		—		$	637,500(2)		$	1,275,000(3)
Stock Options(4)		$	929,217		$	929,217		—		$	929,217		$	929,217
Restricted Stock—Time(5)		$	1,548,259		$	1,548,259		—		$	1,548,259		$	1,548,259
Performance share awards(6)		$	1,240,723		$	1,240,723		—			—		$	1,240,723
Life, Long-Term Disability and Health Insurance Benefits		$	2,550,000(7)		$	675,121(8)		—			—		$	16,425
Reduction due to 280G(10)			—			—		—			—		$	717,306

D. W. Maudlin

Executive Benefits and Payments Upon Termination	Death			Disability			Voluntary or For Cause Term.		Invol. Term. Not for Cause or Term. for Good Reason			Change of Control
Performance-based Cash Payment(1)		$	202,800		$	202,800		—		$	202,800		$	202,800(9)
Cash Severance			—			—		—			—		$	312,000(9)
Stock Options(4)		$	259,703		$	259,703		—		$	259,703		$	259,703
Restricted Stock—Time(5)		$	469,611		$	469,611		—		$	469,611		$	469,611
Performance share awards(6)		$	348,474		$	348,474		—			—		$	348,474
Life, Long-Term Disability and Health Insurance Benefits		$	624,000(7)		$	1,700,604(8)		—			—		$	14,656

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D.L. Strobel

Executive Benefits and Payments Upon Termination	Death			Disability			Voluntary or For Cause Term.		Invol. Term. Not for Cause or Term. for Good Reason			Change of Control
Performance-based Cash Payment(1)		$	177,000		$	177,000		—		$	177,000		$	177,000(9)
Cash Severance			—			—		—			—		$	295,000(9)
Stock Options(4)		$	198,995		$	198,995		—		$	198,995		$	198,995
Restricted Stock—Time(5)		$	375,257		$	375,257		—		$	375,257		$	375,257
Performance share awards(6)		$	254,157		$	254,157		—			—		$	254,157
Life, Long-Term Disability and Health Insurance Benefits		$	590,000(7)		$	987,331(8)		—			—		$	14,537

V. R. Ishwar

Executive Benefits and Payments Upon Termination	Death			Disability			Voluntary or For Cause Term.		Invol. Term. Not for Cause or Term. for Good Reason			Change of Control
Performance-based Cash Payment(1)		$	146,500		$	146,500		—		$	146,500		$	146,500(9)
Cash Severance			—			—		—			—		$	293,000(9)
Stock Options(4)		$	194,339		$	194,339		—		$	194,339		$	194,339
Restricted Stock—Time(5)		$	347,617		$	347617		—		$	347,617		$	347,617
Performance share awards(6)		$	254,492		$	254,492		—			—		$	254,492
Life, Long-Term Disability and Health Insurance Benefits		$	586,000(7)			—(8)		—			—		$	14,523

M. C. Losch III

Executive Benefits and Payments Upon Termination	Death			Disability			Voluntary or For Cause Term.		Invol. Term. Not for Cause or Term. for Good Reason			Change of Control
Performance-based Cash Payment(1)		$	171,000		$	171,000		—		$	171,000		$	171,000(9)
Cash Severance			—			—		—			—		$	285,000(9)
Stock Options(4)		$	193,066		$	193,066		—		$	193,066		$	193,066
Restricted Stock—Time(5)		$	367,807		$	367,807		—		$	367,807		$	367,807
Performance share awards(6)		$	246,670		$	246,670		—			—		$	246,670
Life, Long-Term Disability and Health Insurance Benefits		$	570,000(7)		$	833,249(8)		—			—		$	14,467

(1)

Represents base salary as of September 30, 2021, multiplied by the target percentage of the fiscal year 2021 MIP.

(2)

In the case of termination by the Company without cause, Mr. Shor would be paid through the end of his Employment Agreement which expires on September 30, 2022.

(3)

Represents the amount payable to Mr. Shor if his employment is terminated within 24 months after a change of control by the Company without “cause” or by Mr. Shor for “good reason”.

(4)

Represents market value of $37.25 per share minus the exercise price for all unvested options (but not less than zero). The number of unvested options for each Named Executive Officer is set forth in the Outstanding Equity Awards at Fiscal Year End table on page 34 above.

(5)

Represents the market value of $37.25 of all time-based restricted stock awards at target in the case of

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death or disability and in the case of a change of control. The number of time-based restricted stock awards for each Named Executive Officer is set forth in the Outstanding Equity Awards at Fiscal Year End table on page 34 above.

(6)

Represents the market value at $37.25 of all unvested performance share awards at target in the case of death or disability and in the case of a change of control. The number of unvested performance share awards for each Named Executive Office is set forth in the Outstanding Equity Awards at Fiscal Year End table on page 34 above.

(7)

Represents death benefit under a life insurance policy, the premiums on which are paid by the Company, equal to four times base salary for Mr. Shor and two times base salary for the other Named Executive Officers.

(8)

Represents the present value of benefits payable under the Company’s executive long-term disability plans, determined using the same discount rate used to determine the Company’s funding obligation under the pension plan.

(9)

Represents the amount payable to the Named Executive Officer if his or her employment is terminated within 12 months (24 months for Mr. Shor) after a change of control by the Company without “cause” or by the Named Executive Officer for “good reason”.

(10)

Code Section 280G provides guidelines that govern payments triggered by a change in control. If such payments exceed 2.99 times the average annual compensation (safe harbor limit) for certain individuals, the payments may result in adverse tax consequences and excise taxes. The Company does not provide any gross-up payments for such tax consequences or excise taxes. If the change in control compensation exceeds the safe harbor limit, the severance value will be reduced to the safe harbor limit. This amount represents the severance reduction for Mr. Shor.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company is providing the following information about the relationship of the annual total compensation of Michael Shor, President and Chief Executive Officer of the Company, to the annual total compensation of the “median” Company employee, determined as described below (the “CEO Pay Ratio”):

For fiscal 2021:

•

the annual total compensation of the employee identified as the median employee of the Company (other than the Chief Executive Officer) was $66,477; and

•

the annual total compensation of the Chief Executive Officer for purposes of determining the CEO Pay Ratio was $2,491,682.

Based on this information, the ratio of the annual total compensation of the Chief Executive Officer to the median employee’s annual total compensation was estimated to be 37.5 to 1 for fiscal 2021.

The increase from the prior year’s ratio is primarily attributable to the fact that Mr. Shor’s annual total compensation increased as a result of higher incentive compensation earned in fiscal 2021 as operating results of the Company improved.

This CEO Pay Ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the Company’s payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the CEO Pay Ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

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To identify the median of the annual total compensation of all of the Company’s employees, as well as to determine the annual total compensation of the “median employee”, the methodology and the material assumptions, adjustments and estimates used were as follows:

The Company determined that, as of September 30, 2020, the Company’s employee population consisted of approximately 1,037 individuals globally. The Company selected September 30, 2020, which was the last day of fiscal 2020, as the date upon which the Company would identify the “median employee”. The “median employee” is required to be updated only after the passage of three years or if recalculation would cause a material change in the ratio.

In accordance with the “de minimis exemption” adjustment permitted by SEC rules, which allows the exclusion of certain employees working in jurisdictions outside of the United States of America in an aggregate maximum equal to less than five percent of the Company’s total employees, all employees of the Company’s affiliates located in China (ten employees) and Singapore (four employees) and Japan (two employees) were excluded from the calculation used to determine the median employee. To identify the median employee from the employee population, the Company collected actual salary, bonus paid, other lump sums, life insurance premiums and 401(k) plan matches paid by the Company during the 12-month period ended September 30, 2020. In making this determination, the Company annualized the compensation of all newly hired employees during this period.

Environmental, Social and Governance Matters

In addition to the information set forth below, further information regarding the Company’s environmental, social and governance activities can be found under the Sustainability tab on the Company’s website at https://haynesintl.com/company-information/sustainability.

Governance and Social Matters

The Company is committed to a culture of openness, trust and integrity in all aspects of its business. It is critical that all employees, vendors and customers understand and accept that, in everything it does, the Company will conduct itself from the perspective of “doing the right thing for the right reason” at all times.

The Company has a number of policies in place governing social and ethical issues, including, without limitation:

•

Code of Business Conduct and Ethics

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Anti-Harassment Policy

•

Human Rights Policy

•

Human Trafficking Policy

•

Anti-Corruption Policy

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Conflict Minerals Policy

•

Gift Policy

•

Supplier Code of Conduct

•

Business Continuity Plan

All Company employees must certify compliance with the Code of Business Conduct and Ethics annually, and regular training is provided to employees regarding these and other policies. In addition, the Company maintains a whistleblower hotline with access available on an anonymous basis online or by telephone.

Environmental Matters

The Company is conscious of its environmental impact and is actively working to lighten its carbon footprint including projects to measure greenhouse gas emissions and develop goals of reduction. Consistent with that effort, the Company is in the process of installing a 1MW solar fixed ground mount array system

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to reduce the dependence on nonrenewable energy sources at its wire facility located in Mountain Home, North Carolina. This solar system should provide over 50% of the electricity needs for the facility. In addition, since fiscal year 2010, the Company has invested more than $2.0 million in energy conservation programs, and as a result, the Company now saves approximately $1.6 million in energy costs per year. The Company has specific targets in place for reducing electricity and natural gas consumption in its energy conservation programs.

The Company has an enterprise level environmental policy, which focuses on fostering a safe workplace, while protecting the environment and complying with laws and health and safety management systems. The Company maintains an environmental management system certified to the ISO 14001:2015 standard, and Kokomo operations are ISO 50001:2018 certified. The Company’s facilities are subject to periodic inspection by various regulatory authorities. The Company utilizes available resources to improve quality, environmental and health and safety management systems, as well as set objectives and targets for each. This policy is communicated to contractors and vendors who provide services on site, and the Company periodically audits selected suppliers from an environmental compliance perspective.

In addition, the ever-increasing demand for clean energy generation has led to the development of several emerging technologies that require high-temperature alloys that can withstand demanding operating conditions. The Company is in the process of adopting industrial acoustic imagers to identify oil leaks, temperature losses and other issues. The Company is also in the final process of installing a compressed air control system designed to minimize excess energy use. Since the invention of HASTELLOY® X alloy in 1954, the Company’s alloys have made it possible for aerospace engines to run at high temperatures for long periods of time. This has been further enhanced with alloys used in new generation engines such as HAYNES 282®. Engines being placed in service today reportedly consume 15% less fuel, produce 50% less pollutants and reduce the noise footprint near airports compared to the previous generation of airplane engines. The environmental related improvements stem in part from the increased use of alloys, such as HASTELLOY® X, HAYNES® 188, 230®, 282®, 242®, 244® and other Haynes invented alloys.

In addition to the Company’s alloys for energy production and powering modern aircraft in a more environmentally friendly manner, the Company’s alloys are used in chemical plants that produce ecologically safe agrichemicals which help to feed the world’s growing population. Company-invented HASTELLOY® G‑35®, HYBRID-BC1® and C-276 alloys are commonly used in these applications. In addition, HASTELLOY® C-22®, C-2000® and B-3® alloys are used by the pharmaceutical companies for production of chemicals.

Renewable power generation offers the promise of producing power from nature’s resources, such as wind, sun, rivers and oceans, with minimal depletion to the Earth’s resources and damage to the environment. Many renewable energy technologies require the capture of energy at very high temperatures in extreme environments for which the Company’s alloys are well suited. For example, the Company’s materials withstand intense heat in concentrated solar power plants to facilitate storable thermal power to generate electricity after the sun sets.

Safety Matters

Safety is the Company’s top priority. Listed below are certain improvement efforts the Company has implemented in order to reduce occurrences of injuries, occupational diseases and work-related fatalities.

•

Each year, employees receive emergency preparedness training.

•

The Company conducts severe weather and fire drills periodically.

•

Employees attend refresher training annually. This training includes coverage of the following items: Lock Out Tag Out, Confined Spaces, First Aid and Bloodborne Pathogens, Fire Prevention and Emergency Action Plan, Hearing Conservation, Hand Safety, Personal Protective Equipment requirements, Working Around Mobile Equipment and Walking and Working Surfaces.

•

All of the Company’s manufacturing sites have a volunteer Emergency Response Team (ERT). The ERT members are state-certified trained in first aid and HAZMAT response.

•

Company supervisors receive OSHA-10 Hour and Incident Investigation training.

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•

The Company conducts routine departmental safety audits.

The Company extends its health and safety policies to suppliers, visitors and contractors. When suppliers, visitors and contractors come on site, they receive safety training. The training includes a review of relevant policies, required personal protection.

Human Capital Resources

The Company values its workforce as one of its most important assets. Accordingly, the Company has adopted and maintains a number of programs and practices designed to attract and retain the best available personnel.

Succession and Recruitment

The Company has an organizational development and succession planning process in place for human capital strategic planning. The strategic development process is continually updated and often consists of multi-year succession and development plans for individuals. Such succession plans have been utilized throughout the Company to prepare employees for future roles and leadership opportunities.

In response to the COVID-19 pandemic and other market forces that have altered, and are expected to continue to alter, the workforce and the manner in which it functions, the Company is redefining the way in which many roles within the Company may be performed. For example, through experience with the COVID-19 pandemic, the Company has learned that a portion of its non-production employees are able to perform many of their job functions outside of the office. In addition, virtual meetings have been used to substantially reduce travel as well as in-person contact. The Company is evaluating the effects of these and other changes on its current and future workforce, including their potential to provide the Company access to a broader recruiting pool for potential new employees, including workers in specialized areas such as metallurgy and others with specialties relating to the Company’s products, flexible role descriptions and/or working arrangements and other matters.

The Company attempts to promote from within when opportunities occur, given employee growth and progression. The Company also utilizes outside recruiters due to the challenging and competitive hiring environment. In order to encourage development of a future workforce for the Company, the Company continues to sponsor a Ph.D. candidate and Senior Metallurgical Engineers Research Project from Purdue University, as well as providing internships in various departments and locations throughout the Company.

COVID-19 Pandemic

Economic conditions have limited hiring and succession planning implementation in some areas. In fiscal 2020 and 2021, the Company predominantly hired new personnel in order to backfill crucial positions. Hiring for succession planning or bench strength has subsided during the economic downturn in business related to the COVID-19 pandemic and other factors.

COVID-19 and the ongoing economic downturn created additional risk related to key person retention and succession planning. In response to the economic conditions created by the COVID-19 pandemic, previously implemented voluntary retirement incentives, reductions-in-force, and compensation reductions, created additional challenges to developing and retaining staff. This creates higher risk of turnover of key employees. In addition, other industries did not experience the same downturn as the Company did, and alternative opportunities are available for current employees and potential candidates.

Strong competition and limited workforce issues challenge the Company’s acquisition and retention of employees with specific skill sets. Limited dedicated resources and commitment for developmental positions may also impact the success and rate of succession and development efforts. Nonetheless, the Company has established formal and informal development activities to promote employee retention and position the Company for success in the long term.

Retirement and Exit Programs

The Company has established a phased retirement program to sustain the Company’s access to institutional knowledge of employees with specialized skill sets who would like to phase into retirement. At

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the same time, the program is designed to facilitate a smooth transition for their successors. This program has been limited in its use but strategically beneficial.

The Company also utilizes exit interviews and on-boarding interviews to provide feedback regarding turnover and employee desires for growth and development. Both have recently been strengthened and expanded. These interviews are also utilized to identify drivers of voluntary turnover and departures from the Company. Employee turnover rate and reasons, including voluntary and involuntary departures, are monitored annually. The global turnover rate in fiscal 2021 was 14%, compared to 22% in fiscal 2020 and an average of 14% in the previous two fiscal years. Both voluntary and involuntary terminations, including retirements, are used to calculate the turnover rate. The reduction-in-force resulting from the COVID-19 pandemic accounted for most of the increased turnover rate in fiscal 2020, however turnover was more normalized in fiscal 2021.

Compensation Equity

The Company conducts inflation-adjusted compensation analysis to promote competitive compensation. This analysis takes into account ranges for the geographical area, education level and job title under consideration. The Company’s Human Resources Department develops offers for new salaried employees and also develops and administers promotions to maintain the internal integrity of the compensation levels for comparable positions. The Company works with managers to ensure that high potential employees and those individuals with unique talents are appropriately developed and compensated. For example, the Board of Directors authorized a pool of restricted stock that can be used to compensate high potential employees and for retention purposes. Further, bonus programs have been implemented at the LaPorte and Mountain Home facilities, as well as those in Europe and Asia, for retention and recognition purposes, and all salaried employees who are not eligible to participate in the Management Incentive Plan were given bonuses in fiscal 2021. The Compensation Committee, with the recommendation of the full Board in the case of incentive compensation, determines annual salaries and other elements of compensation of the Company’s executive management team, taking into account similarly situated executives employed by a peer group of companies while also considering input of the Compensation Committee’s independent compensation consultant.

Diversity and Inclusion

The Company considers diversity as a criteria evaluated as a part of the attributes and qualifications a candidate possesses. The Company construes the notion of diversity broadly, considering differences in viewpoint, professional experience, education, skills and other individual qualities, in addition to race, gender, age, ethnicity and cultural backgrounds as elements that contribute to a diverse Company.

Management also considers similar broad concepts of diversity in its selection of vendors, contractors and other service providers. As a federal government subcontractor, the Company follows applicable federal rules and regulations relating to diversity and other matters, including reporting requirements.

Company Culture

The Company has controls in place relating to compliance with the Company’s Code of Business Conduct and Ethics, including a requirement for annual employee certification of that code as well as an established whistleblower hotline and related procedures. In addition, human capital management, and more specifically employee hiring and retention, are included within the Company’s Enterprise Risk Management program, which is subject to Board oversight through regular reporting.

Community Involvement

The Company has used internships and partnerships with universities to enrich recruiting efforts, particularly for technical roles such as research, alloy development and engineering. The Company has also utilized outreach and partnerships with local community resources at all major locations such as community and technical colleges, workforce development agencies, industry groups and other entities to strengthen the Company’s hiring process and expand the future workforce candidate pool.

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Employee Engagement and Wellness

The Company has a long-standing tuition reimbursement program to assist employees with the continuation of their education. In addition, employee assistance programs offer counseling for emotional, financial and family issues. Continuing financial planning education is provided by the Company’s 401(k) plan administrator to assist employees in financial and retirement planning. For many years, the Company’s investment in human capital has involved commitments to worker training, apprenticeship programs and funding college scholarships.

Management and Board Oversight

Management is engaged in the Company’s efforts regarding management of human capital resources at all levels through regular informational meetings, the Company’s Enterprise Risk Management program and organized succession planning. The Board oversees these activities through regular reports by senior management regarding new or altered programs and as part of the Enterprise Risk Management process. In addition, the Corporate Governance and Nominating Committee of the Board is actively engaged in monitoring and encouraging diversity at the Board level while the Compensation Committee also focuses on achieving and maintaining internal and external pay equity for the executive team and the Board members while overseeing incentive compensation more broadly throughout the organization. In promoting external pay equity, the Board and the Compensation Committee make use of peer comparisons and benchmarking measures.

Audit Committee Report

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited financial statements contained in the Annual Report on Form 10-K for the year ended September 30, 2021 with the Company’s management and the independent auditors. These reviews included quality, not just acceptability, of accounting principles, reasonableness of significant judgments and clarity of disclosures in financial statements. Management is responsible for the financial statements and the reporting process, including administering the systems of internal control. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles, as well as expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the PCAOB and the Commission. In addition, the Audit Committee has discussed with the independent registered public accounting firm the auditors’ independence from the Company and its management, including the matters in the written disclosures and letter received by the Audit Committee, as required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended, and considered the compatibility of non-audit services with the auditors’ independence.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 for filing with the SEC, and the Board of Directors has so approved the audited financial statements.

Respectfully submitted,

Donald C. Campion, Chair
Dawne S. Hickton
Larry O. Spencer

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

In accordance with its charter, the Audit Committee has selected the firm of Deloitte & Touche LLP (“Deloitte”), an independent registered public accounting firm, to be the Company’s auditors for the fiscal

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year ended September 30, 2022, and the Board of Directors is asking stockholders to ratify that selection. The Company is not required to have the stockholders ratify the selection of Deloitte as the independent auditor. The Company nonetheless is doing so because the Company believes it is a matter of good corporate practice. If the stockholders do not ratify the selection, the Audit Committee will reconsider the retention of Deloitte, but ultimately may decide to retain Deloitte as the Company’s independent auditor. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time if it determines that such a change would be in the best interests of the Company and its stockholders. Before selecting Deloitte, the Audit Committee carefully considered that firm’s qualifications as an independent registered public accounting firm for the Company. This included a review of its performance in prior years, including the firm’s efficiency, integrity and competence in the fields of accounting and auditing. The Company has been advised by Deloitte that neither it nor any of its associates has any direct or material indirect financial interest in the Company.

Deloitte has acted as the independent registered public accounting firm for Haynes and its predecessors since 1998. Its representatives are expected to be present at the annual meeting and will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions concerning the audit of the Company’s financial statements.

Audit Fees—The Company has paid, or expects to pay, audit fees (including cost reimbursements) to Deloitte for the fiscal years ended September 30, 2020 and 2021, including fees for an integrated audit which included the Sarbanes-Oxley attestation audit and reporting to the Securities and Exchange Commission (SEC), of $1,030,052 and $1,080,884, respectively.

Audit-Related Fees—The Company has paid, or expects to pay, fees (including cost reimbursements) to Deloitte for audit-related services during fiscal 2020 and 2021 of $7,105 and $7,613, respectively. These services related primarily to benefit plan audits and special projects.

Tax Fees—The Company has paid, or expects to pay, fees (including cost reimbursements) to Deloitte for services rendered related to tax compliance, tax advice and planning during fiscal 2020 and 2021 of $378,419 and $290,788, respectively. Services included preparation of federal and state tax returns, tax planning and assistance with various business issues including correspondence with taxing authorities.

All Other Fees—The Company did not incur any additional fees for services rendered by Deloitte in the fiscal years ended September 30, 2020 and 2021.

The Audit Committee reviewed the audit and non-audit services rendered by Deloitte and concluded that such services were compatible with maintaining the auditors’ independence. All audit and non-audit services performed by the Company’s independent registered public accounting firm are approved in advance by the Board of Directors or the Audit Committee to ensure that such services do not impair the auditors’ independence.

The Company’s policies require that the scope and cost of all work to be performed for the Company by its independent registered public accounting firm must be pre-approved by the Audit Committee. Prior to the commencement of any work by the independent registered public accounting firm on behalf of the Company, the independent registered public accounting firm provides an engagement letter describing the scope of the work to be performed and an estimate of the fees. The Audit Committee and the Chief Financial Officer must review and approve the engagement letter and the fee estimate before authorizing the engagement. The Audit Committee pre-approved 100% of the services rendered by Deloitte in fiscal 2020 and 2021.

The Board of Directors unanimously recommends that stockholders vote FOR this proposal.

APPROVAL OF AMENDMENT NO. 1 TO HAYNES INTERNATIONAL, INC. 2020 INCENTIVE COMPENSATION PLAN

The stockholders are being asked to approve an amendment (the “Amendment”) to the Haynes International, Inc. 2020 Incentive Compensation Plan (the “2020 Plan”) and the reservation of 375,000 additional shares of common stock (or common stock equivalents) for issuance thereunder.

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On January 11, 2022, upon recommendation of the Compensation Committee, the Board of Directors approved the Amendment and submittal of the Amendment to the stockholders for their consideration and approval. The Amendment will become effective if, and as of the date, approved by the stockholders. The Amendment would amend the current 2020 Plan, and awards would continue to be issued thereunder. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.

The Amendment is intended to promote the interests of the Company and its stockholders by enabling the Company to continue to provide its directors, executive officers and other management employees with appropriate incentives and rewards to encourage them to enter into and continue in the employ of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling their personal responsibilities for long range and annual achievements.

Under applicable NASDAQ rules, stockholder approval is required in order to make awards under the 2020 Plan, as amended by the Amendment, to directors and executive officers of the Company. In addition, stockholder approval is required to grant incentive options to employees under Section 422 of the Code.

Description of the Amendment

The following is a summary of the principal features of the Amendment and its operation. The summary is qualified in its entirety by reference to the 2020 Plan as amendment by the Amendment, which is set forth in Appendix A.

•

Committee Discretion. The 2020 Plan provides for significant Committee discretion in the interpretation and administration of the 2020 Plan. The Amendment supplements existing language by clarifying that the Committee is empowered to use its discretion to accelerate vesting of Awards under circumstances the Committee determines appropriate.

•

Adjustment of 2020 Plan Limits. Subject to customary adjustments for changes in the Company’s corporate structure (e.g. a reorganization, stock split or merger), the Amendment increases the number of Shares in the aggregate pools available for grant under the 2020 Plan to (i) 575,000 shares for Restricted Stock, Restricted Stock Units and Performance Shares and (ii) 400,000 shares for Options and Stock Appreciation rights. These numbers include the remaining shares available for issuance under the 2020 Plan in effect as of the date hereof, plus an additional amount added to those existing pools for grants going forward. The additional amounts are 325,000 shares for Restricted Stock, Restricted Stock Units and Performance Shares and 50,000 shares for Options and Stock Appreciation Rights. In addition, the Amendment increases the number of Shares available to be granted to an employee in any calendar year pursuant to an Award of Shares (or Share equivalents) in the form of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units from 40,000 to 60,000. The Amendment clarifies the existing cap on annual cash Awards to an individual employee by specifying that MIP payments are not included in calculating the cap of $1,500,000. The Amendment also caps annual compensation to individual non-management directors at (i) any combination of equity awards with a maximum aggregate value of $350,000 per person per year, which represents a $100,000 increase from the 2020 Plan maximum limitation, and (ii) total maximum compensation, including cash and equity, of $500,000 per person per year, which represents an increase of $150,000 from the 2020 Plan maximum limitation.

The proposed increases in Shares under the 2020 Plan supplement, but do not replace, the Shares remaining in the pools established in the original 2020 Plan. The Company wishes to increase the number of Shares available for grant under the 2020 Plan in order to have Shares available to assist in recruiting, retaining and motivating employees as well as to continue to align employee and shareholder interests. The proposed increase would also allow the Company to manage affordability to prevent dilution and facilitate disciplined annual Share granting practices.

•

Revision of Certain Service Termination Provisions. The Amendment adjusts the treatment of Performance Share Awards upon Retirement, as follows: upon Retirement, Performance Share Awards and associated Dividend Equivalents will be paid out as if the target level of performance had been achieved, prorated based upon time served during the Performance Period, each to be paid as soon as reasonably possible after termination, subject to certain restrictions. Pursuant to the

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2020 Plan prior to giving effect to the Amendment, upon Retirement, Performance Shares were paid in full at target level of performance without proration.

Description of the 2020 Plan

The following is a summary of the principal features of the 2020 Plan and its operation. The summary is qualified in its entirety by reference to the 2020 Plan itself which is set forth in Appendix A to the Company’s Proxy Statement for its 2020 annual meeting of shareholders.

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2020 Plan Limits. Subject to customary adjustments for changes in the Company’s corporate structure (e.g. a reorganization, stock split or merger), in the aggregate no more than (i) 250,000 shares (or share equivalents) may be awarded under the 2020 Plan in the form of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, and (ii) 350,000 shares underlying Options and Stock Appreciation Rights may be granted under the 2020 Plan. These numbers include securities authorized but not awarded under the Haynes International, Inc. 2016 Incentive Compensation Plan. In addition, the 2020 Plan caps annual awards (i) to employees at any combination of (a) $1,500,000 in cash awards, including Performance Units, (b) 40,000 Restricted Stock shares or units or Performance Shares or (c) 100,000 Options or Stock Appreciation Rights, and (ii) to non-management directors at any combination of awards with a maximum aggregate value of $250,000. In addition, total maximum compensation to non-management directors, including cash and equity, may not exceed $350,000 per person per year. The 2020 Plan contains additional restrictions pertaining to incentive Options to provide for their qualification as such. Certain shares, including those subject to awards that are forfeited, cancelled or terminated, will be eligible for reissuance under the 2020 Plan and shares shall not be deemed to have been issued pursuant to the 2020 Plan with respect to any portion of an award settled in cash. See Section 4.6 of the 2020 Plan.

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Eligibility. All of the Company’s executive officers and non-management directors and such other management employees of the Company and its subsidiaries as are selected by the Compensation Committee are eligible to participate in and receive awards under the 2020 Plan, except that incentive options may be granted only to employees. Subject to limitations under the 2020 Plan, the Compensation Committee is authorized to determine the timing and amounts of grants made to participants. Non-management directors may not receive any performance-based awards under the 2020 Plan.

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Administration. The Compensation Committee has the authority and responsibility to administer the 2020 Plan. The Compensation Committee consists solely of members who are “non-management directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and “independent directors” under the NASDAQ rules. The Compensation Committee may exercise broad discretionary authority in the administration of the 2020 Plan, including the authority to determine the recipients of awards and, so long as not inconsistent with the 2020 Plan, the terms and conditions of such awards.

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Amendments and Termination. No awards may be made under the 2020 Plan after March 1, 2030. The 2020 Plan may be terminated at any time prior to that date by the Board of Directors, in its sole discretion, and the Board may also amend the 2020 Plan or any award made thereunder at any time, provided that no termination, amendment or modification of the 2020 Plan or any award made thereunder (other than with respect to performance share or performance unit awards) may adversely affect in any material way any award previously granted under the 2020 Plan, without the written consent of the participant of such award. Furthermore, stockholder approval will be required for any amendment to the extent necessary to comply with applicable law and the regulations, rules or requirements of NASDAQ or any other stock exchange on which the Company’s common stock is listed or traded. Currently, NASDAQ rules would require stockholder approval for a material revision of the 2020 Plan, which would generally include: (i) any material increase in the number of shares to be issued under the 2020 Plan (other than to reflect a reorganization, stock split, merger, spinoff or similar transaction), (ii) any material increase in benefits to participants, including any material change to (a) permit a repricing (or decrease in exercise price) of outstanding options, (b) reduce the price at which shares or options to purchase shares may be offered, or (c) extend the duration of the 2020 Plan, (iii) any material expansion of the class of participants eligible to participate in the 2020 Plan and (iv) any expansion in the types of options or awards provided under the 2020 Plan.

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Types of Awards. Six different types of equity awards may be made under the 2020 Plan; which awards may be free-standing or granted in tandem. They are as follows:

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Options. Options entitle the participant to elect to purchase up to a specified number of shares of the Company’s common stock at a specified price (the exercise price). The exercise price cannot be less than the fair market value of the common stock when the options are granted. Under the 2020 Plan, Options may be incentive options (unavailable to non-management directors) or non-qualified Options. No Options may be exercised more than ten years from the date of grant. Unless another vesting schedule is provided, one-third of the options granted will vest on each of the first three anniversaries of the grant date.

As detailed in the 2020 Plan, Options are generally payable at the time of exercise via any of the following methods: (i) personal or bank cashier’s check, (ii) subject to Compensation Committee approval, delivery of unrestricted shares of common stock owned by the participant having a value at the time of exercise equal to the option price, (iii) subject to Compensation Committee approval, the participant surrendering such number of vested options sufficient in value to cover the option price, or (iv) any combination of the foregoing.

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Stock Appreciation Rights. A stock appreciation right entitles the participant to receive, for each share as to which the award is granted, payment, in cash, in shares of common stock, or in some combination of both, of an amount equal in value to the excess of the fair market value of a share of the Company’s common stock on the date of exercise over the specified purchase price designated at the grant date (which may not be less than the fair market value of a share of common stock on the date of grant). Unless otherwise provided, a stock appreciation right shall not vest more rapidly than ratably over a period of three years from the grant date, beginning on the first anniversary of the grant date. Participants holding Stock Appreciation Rights have no dividend rights with respect to the shares subject to such rights.

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Restricted Stock. Restricted Stock represents shares of the Company’s common stock actually issued in the name of the participant, but which the participant has no right to sell, pledge or otherwise transfer until it is determined in the future how many shares the participant is entitled to retain, free of such restrictions, and how many shares, if any, must be forfeited back to the Company. Unless otherwise provided, the participant has beneficial ownership of the shares of Restricted Stock, including the right to vote the shares and to receive dividends thereon. In general, restrictions on the transfer of shares received as a Restricted Stock award lapse no sooner than (i) in the case of employees, the first anniversary of the date of grant and (ii) in the case of non-management directors, the earlier of such time as may be determined by the Compensation Committee and the failure of such director to be re-elected at an annual meeting of stockholders or the removal of a Non-Employee Director from office by any other means by action of the stockholders of the Company.

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Restricted Stock Units. In lieu of or in addition to awarding shares of Restricted Stock, the Compensation Committee may award Restricted Stock Units. Restricted Stock Units constitute a promise by the Company to issue up to a fixed number of shares of Common Stock to the award participant or the cash equivalent thereof at some point in the future, with the number of such shares that are actually issued and the number of shares that are forfeited or the amount of cash paid, as applicable, determined by the number of shares underlying the Restricted Stock Units and relevant conditions attached to the award by the Compensation Committee. Unlike Restricted Stock awards, Restricted Stock Units have no voting rights and do not entitle participants to dividends, but shall, unless otherwise provided by the Compensation Committee receive dividend equivalents at the time and at the same rate as dividends are paid on shares with the same record and pay dates.

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Performance Shares/Units. Performance Shares or units represent the right to payment of shares or cash subject to the achievement of relevant performance goals during a performance period. Under the original 2020 Plan, upon Retirement, Performance Shares and associated dividends were paid in full without proration. Upon achievement of relevant performance goals, Performance Units are distributed to participants in the form of cash, while Performance

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Shares are distributed to participants in the form of cash, stock or some combination of both, generally at the Compensation Committee’s discretion. Unless otherwise provided by the Compensation Committee or prohibited by the 2020 Plan (such as in the case of a change in control), the Compensation Committee has the authority to reduce or eliminate the number of Performance Units or Performance Shares to be converted and distributed, or to cancel any part or all of a grant of Performance Shares or units. If determined by the Compensation Committee, a cash payment in an amount equal to the dividend payable on one share may be made to a participant for each performance share held by such participant on the record date for the dividend.

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Change in Control. Unless, prior to a grant, the Compensation Committee provides otherwise, upon a change in control of the Company (as defined in the 2020 Plan) (i) any and all options and Stock Appreciation Rights would immediately vest and be exercisable for a one year period, but in no event exercisable later than the expiration date of such options or Stock Appreciation Rights, (ii) Restricted Stock and Restricted Stock Units would immediately fully vest and (iii) outstanding Performance Shares or Performance Units will vest automatically, with payment made or Shares issued based upon actual performance of the Company in the period prior to the Change in Control, but in no event less than the amount that would have been paid or issued if the target level of performance established by the Committee prior to the occurrence of the Change in Control had been achieved.

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Other Acceleration of Vesting or Forfeiture of Awards. The exercisability of Options and the vesting or forfeiture of Restricted Stock, restricted units, performance stock and Performance Units under the 2020 Plan, would also be impacted as described below. In addition, under the 2020 Plan, the Compensation Committee has discretion to accelerate the vesting of Stock Appreciation Rights upon the occurrence of events that are specified in the applicable award agreement.

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Options (other than Incentive Options) and Stock Appreciation Rights: Upon the death, disability (as defined in the 2020 Plan) or retirement (as defined in the 2020 Plan) of a participant, all non-incentive Options and Stock Appreciation Rights granted under the 2020 Plan would vest immediately and remain exercisable for five years, but in no event later than the expiration date of such options or Stock Appreciation Rights. If a participant is terminated for cause (as defined in the 2020 Plan) all non-incentive Options and Stock Appreciation Rights granted under the 2020 Plan, whether vested or not, would immediately be forfeited. Upon a termination for any other reason, unless otherwise provided in an award agreement, all unvested non-incentive Options and Stock Appreciation Rights would terminate immediately and vested non-incentive Options would remain exercisable for a period of 90 days (six months in the case of the Chief Executive Officer of the Company).

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Incentive Options: Upon the death, disability or retirement of a participant, all incentive Options granted under the 2020 Plan would vest immediately and remain exercisable for 90 days, in the case of death or retirement, and one year, in the case of disability. If a participant is terminated for cause all incentive Options granted under the 2020 Plan, whether vested or not, would immediately be forfeited. Upon a termination for any other reason, unless otherwise provided in an award agreement, all unvested incentive Options would terminate immediately and vested incentive Options would remain exercisable for a period of 90 days (including for the Chief Executive Officer of the Company).

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Restricted Stock and Restricted Stock Units: Upon a participant’s death or disability, Restricted Stock and Restricted Stock unit awards would fully vest. If a participant retires prior to vesting of any Restricted Stock or Restricted Stock unit, all unvested awards would fully vest; provided that, in the case of awards subject to performance criteria, the number of shares that will vest will be determined as if target performance criteria had been achieved with the remainder of such shares being forfeited and returned to the Company. If the employment or directorship of an employee or a non-employee director is terminated involuntarily for any reason other than for cause, then all unvested awards would fully vest on the day of such event as to all shares subject to the award; provided that, in the case of awards subject to a performance criteria, the number of shares that vest will be determined as if target performance criteria had been achieved, subject to proration determined by multiplying the amount of the shares subject to the award by the number of months the participant worked at least one day during the applicable performance period. If employment is terminated voluntarily or for cause, all unvested shares would be forfeited.

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Performance Shares and Performance Units: Upon a participant’s death, retirement or disability, performance share or unit awards would be paid out in a lump sum without proration as if all unfinished performance periods had ended with one hundred percent (100%) of the performance goals achieved at target level. If the participant is not retirement eligible and terminates employment voluntarily during the performance period, Performance Units or Performance Shares would be forfeited upon such termination. If a participant’s employment is terminated for cause during the performance period, then Performance Shares or performance unit awards would also be forfeited. If employment is otherwise involuntarily terminated, Performance Shares or performance unit awards would be paid out based upon target performance, but pro-rated with respect to the period of the participant’s service during the performance period.

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Performance-Based Awards. The 2020 Plan provides that Performance Shares and Performance Units will be earned based on the attainment of performance goals established by the Compensation Committee. The Compensation Committee also has discretion to tie vesting of other awards under the 2020 Plan to the achievement of performance objectives. Performance objectives may be based on one or more of the following criteria, in each case applied to the Company on a consolidated basis and/or to a subsidiary, affiliate or business unit of the Company, and which the Compensation Committee may use as an absolute measure, or as a measure of comparable performance relative to a peer group of companies: (1) return on total stockholder equity; (2) earnings per share; (3) income before taxes; (4) earnings before any or all of interest, taxes, minority interest, depreciation and amortization; (5) economic profit; (6) sales or revenues; (7) return on assets, capital or investment; (8) market share; (9) cost reduction goals; (10) implementation or completion of critical projects or processes; (11) operating cash flow; (12) free cash flow; (13) net income; (14) accounts receivable; (15) costs; (16) debt to equity ratio; (17) diversity; (18) economic value added; (19) index comparisons; (20) inventory; (21) operating margin; (22) peer company comparisons; (23) production levels; (24) productivity; (25) profit margin; (26) return on sales; (27) safety; (28) sales growth; (29) stock price; (30) succession planning and talent development; (31) sustainability; (32) total segment profit; (33) total stockholder return (actual or relative); (34) working capital and (35) any combination of, or a specified increase or decrease in, any of the foregoing. The 2020 Plan provides flexibility to establish additional criteria, or modify or amend existing criteria, subject to certain limitations, as well as individualized goals for employees. In the Compensation Committee’s reasonable discretion, measurement of achievement of performance goals may be calculated excluding the impact of extraordinary or non-recurring items during any applicable performance period to the extent set forth in the applicable award agreement.

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Transferability of Awards. Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units and Stock Appreciation Rights granted under the 2020 Plan will not be transferable by a participant. During a participant’s lifetime, options granted under the 2020 Plan are not transferrable and may only be exercised by the participant or his or her guardian or legal representative.

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Federal Income Tax Consequences. The following discussion is limited to a summary of the U.S. federal income tax consequences of the grant, exercise, and vesting of awards under the 2020 Plan. The tax consequences of the grant, exercise, or vesting of awards may vary depending upon the particular circumstances, and it should be noted that income tax laws, regulations, and interpretations change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local, and foreign tax laws.

Tax Consequences to Participants.

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Non-Qualified Options. In general, the Company anticipates that (i) a participant will not recognize income at the time a non-qualified option is granted, (ii) a participant will recognize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares on the date of exercise over the option exercise price paid for the shares and (iii) at the time of sale of shares acquired pursuant to the exercise of the non-qualified option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.

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Incentive Options. The Company anticipates that a participant will not recognize income at the time an incentive option is granted or exercised. However, the excess of the fair market value of the shares on the date of exercise over the option exercise price paid may constitute a preference item for the alternative minimum tax. If shares are issued to the optionee pursuant to the exercise of an incentive option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of the grant or within one year after the issuance of such shares to the optionee, then upon the sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss. If shares acquired upon the exercise of an incentive option are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares as of the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the option price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.

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Stock Appreciation Rights. In general, the Company anticipates that a participant will not recognize income upon the grant of Stock Appreciation Rights. The participant generally will recognize ordinary income when the Stock Appreciation Rights are exercised in an amount equal to the cash and the fair market value of any unrestricted shares received on the exercise.

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Restricted Stock. In general, the Company anticipates that a participant will not be subject to tax until the shares of Restricted Stock are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code. At that time, the participant will be subject to tax at ordinary income rates on the fair market value of the restricted shares (reduced by any amount paid by the participant for such restricted shares). However, a participant who so elects under Section 83(b) of the Code within 30 days of the date of award of the shares will have taxable ordinary income on the date of award of the restricted shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions) over the purchase price, if any, of such restricted shares. Any appreciation (or depreciation) realized upon a later disposition of such shares will be treated as long-term or short-term capital gain depending upon how long the shares have been held. If a Section 83(b) election has not been made, any dividends received with respect to restricted shares that are subject to forfeiture and transfer restrictions generally will be treated as compensation that is taxable as ordinary income to the participant.

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Restricted Stock Units and Performance Shares or Units. In general, the Company anticipates a participant will not recognize income upon the grant of a Restricted Stock unit award or a performance share or unit award. Upon settlement of the awards, the participant generally will recognize ordinary income in an amount equal to the cash and the fair market value of any unrestricted shares received.

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Dividends or Dividend Equivalents. Any dividend or dividend equivalents awarded with respect to awards granted under the 2020 Plan and paid in cash or unrestricted shares will be taxed to the participant at ordinary income rates when such cash or unrestricted shares are received by the participant.

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Section 409A. The 2020 Plan permits the grant of various types of awards that may or may not be exempt from Section 409A of the Internal Revenue Code. In general, if an award is subject to Section 409A, and if the requirements of Section 409A are not met, the award could be subject to tax at an earlier time than described above and could be subject to additional taxes and penalties. All awards granted under the 2020 Plan will be designed either to be exempt from, or to comply with the requirements of, Section 409A.

Tax Consequences to the Company.

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To the extent that a participant recognizes ordinary income in the circumstances described above, the Company will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, and is not an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code.

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The Board of Directors unanimously recommends that stockholders vote FOR the approval of the Amendment.

ADVISORY VOTE ON EXECUTIVE COMPENSATION

As described in detail under the heading “Executive Compensation” the Company’s executive compensation programs are designed to attract, motivate and retain talented executives. In addition, the programs are structured to create an alignment of interests between the Company’s executives and stockholders so that a significant portion of each executive’s compensation is linked to maximizing stockholder value. Under the programs, the Named Executive Officers are provided with opportunities to earn rewards for the achievement of specific annual and long-term goals that are directly relevant to the Company’s short-term and long-term success. Accordingly, as a result of the Company’s financial performance in recent years MIP payments for fiscal 2018 and 2019 were made at levels between the minimum and target payment levels, and no MIP payouts were made for fiscal 2020. Similarly, equity awards for which vesting depended upon achievement of a measurement of income for those periods were forfeited. The effectiveness of this alignment is demonstrated by the fact that financial underperformance by the Company and underperformance of its stock price in recent years has resulted in only partial or no payouts under the Company’s management incentive plan and forfeiture of equity incentive awards that did not meet required performance targets, as well as the lack of value creation due to stock option exercise prices being above the trading price of the Company’s common stock. The Company believes it has undertaken significant efforts to improve its operational and financial performance, which did improve during fiscal 2021. Operating margins and financial results in the second half of fiscal 2020 and the first half of fiscal 2021 were significantly adversely affected by the economic and other impacts of the COVID-19 pandemic.

Please read the “Compensation Discussion and Analysis” beginning on page 18 for additional details about the Company’s executive compensation philosophy and programs, including information about the Fiscal Year 2021 compensation of the Named Executive Officers.

The Compensation Committee of the Board of Directors continually reviews the Company’s compensation programs to ensure they achieve the desired objectives. As a result of its review process, in fiscal year 2021 the Compensation Committee took the following actions with respect to the Company’s executive compensation practices:

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established corporate performance goals under the MIP based on the Company’s attainment of certain net income and operating cash flow levels, creating a clear and direct relationship between executive pay and corporate performance;

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made grants of Restricted Stock subject to time-based vesting and Performance Shares subject to the achievement of performance conditions, in order to reward executive officers for the achievement of both long-term and strategic goals;

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established base salary and overall compensation at levels that are in line with those of individuals holding comparable positions and producing similar results at other multi-national corporations of similar size, value and complexity; and

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designed the elements of the compensation program to retain and incentivize the Named Executive Officers and align their interests with those of the stockholders.

The Company seeks your advisory vote on the compensation of the Named Executive Officers. The Company asks that you support the compensation of the Named Executive Officers as described in this proxy statement by voting in favor of this proposal. This proposal, commonly known as a “say-on-pay” proposal, gives the Company’s stockholders the opportunity to express their views on the compensation of the Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Named Executive Officers and the philosophy, policies and practices described in this proxy statement. The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board of Directors. The Board of Directors and the Compensation Committee will review the voting results and consider them, along with any specific insight gained from stockholders of Haynes and other information relating to the stockholder vote on this proposal, when making future decisions regarding executive compensation.

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APPENDIX A

AMENDMENT NO. 1

TO HAYNES INTERNATIONAL, INC.

2020 INCENTIVE COMPENSATION PLAN

This Amendment No. 1 (this “Amendment”) to the Haynes International, Inc. 2020 Incentive Compensation Plan (the “Plan”) shall become effective as of the date approved by the stockholders of Haynes International, Inc. (the “Company”).

WHEREAS, on February 25, 2020, the stockholders of the Company approved the Plan;

WHEREAS, Haynes desires to amend certain provisions of the Plan as set forth herein;

NOW, THEREFORE, the following amendments shall be made to the Plan:

1. The second paragraph of Article III of the Plan is hereby amended and replaced in its entirety with the following:

In furtherance, and not in limitation, of the above, the Committee shall have the authority in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted, the number of Shares to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; to accelerate vesting of any Award under appropriate circumstances, as determined by the Committee in its sole discretion; to determine Performance Goals no later than ninety (90) days after the start of the applicable Performance Period; to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged, or surrendered; and to make adjustments in the terms and conditions of, and the Performance Goals (if any) included in, Awards. The Committee shall certify as to whether any Performance Goals were met prior to the payment of any Performance Unit or Performance Share. For the avoidance of doubt, the Committee may exercise its discretion to accelerate or otherwise alter the vesting schedule set forth herein or in any Award Agreement in the best interests of the Company.

2. Section 4.2 of the Plan is hereby amended and restated in its entirety by adding a phrase at the end of Section 4.2(i), and increasing the number of shares in Section 4.2(ii) from 40,000 to 60,000 as follows:

4.2. Annual Limitation on Awards to Employees. In any calendar year, no Awards to any one Employee may exceed any combination of (i) $1,500,000 in cash awards, including Performance Units which, for the avoidance of doubt, shall not include cash payments under the Management Incentive Plan, (ii) 60,000 shares of performance-based Restricted Stock, performance-based Restricted Stock Units, shares of time-based Restricted Stock, time-based Restricted Stock Units or Performance Shares, or (iii) 100,000 Options (including Incentive Options and Non-Qualified Options) or Stock Appreciation Rights.

3. Section 4.3 of the Plan is hereby amended and restated in its entirety by increasing the annual equity value limit for non-employee directors by $100,000 and the annual limit on total compensation for non-employee directors by $150,000 as follows:

4.3 Annual Limitation on Awards to Non-Employee Directors. In any calendar year, no Awards to any one Non-Employee Director hereunder may exceed a maximum aggregate value of $350,000, determined based upon the closing price of the Company’s common stock on the trading day prior to the grant date. In addition, total maximum compensation, including cash and Awards hereunder, to any one Non-Employee Director may not exceed $500,000, determined based upon the closing price of the Company’s common stock on the day prior to the grant date, in any calendar year.

4. Section 4.5 of the Plan is hereby amended and restated in its entirety by increasing the number of Options and Stock Appreciation Rights by 50,000 and the number of shares of Restricted Stock, Restricted Stock Units and Performance Shares by 325,000 as follows:

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4.5 Number of Shares. Subject to adjustment as provided in Section 4.7 herein, the following limitations shall apply in the aggregate as specified in the categories set forth below:

(a) For Restricted Stock, Restricted Stock Units and Performance Shares, no more than 575,000 Shares (or Share equivalents) may be granted in the aggregate hereunder;

(b) For Options and Stock Appreciation Rights, no more than 400,000 Shares (or Share equivalents) may be granted in the aggregate hereunder.

5. Section 8.6 is hereby amended and restated in its entirety by providing for proration of Performance Shares and related Dividend Equivalents upon Retirement, as follows:

8.6 Termination of Employment Due to Death, Retirement or Disability. In the event of the Participant’s Termination by reason of death or Disability during a Performance Period, the Participant shall receive a lump sum payout of the related outstanding Performance Units and Performance Shares calculated as if all unfinished Performance Periods had ended with one hundred percent (100%) of the Performance Goals, achieved at target level, valued as of the first business day of the calendar year following the date of Termination of Employment and payable as soon thereafter as reasonably possible but not later than the 15th day of the third month after the end of the calendar year in which such death or Disability occurred, provided, however, that, in the case of the Participant’s Retirement during the Performance Period, then upon such Retirement, the amount of the Participant’s Performance Units and number of Performance Shares shall be adjusted. The revised Awards shall be determined by multiplying the amount of the Performance Units and the number of Performance Shares, as applicable, at the target level by the number of months the Participant worked at least one day during the respective Performance Period divided by the number of months in the Performance Period, to be paid, if at all, as set forth in this Section 8.6. Where the amount or part of Dividend Equivalents is determined by the number of Performance Shares that are paid out or is otherwise determined by a performance measure, and the related Performance Period for the Dividend Equivalents was not completed at death or Disability, then the Dividend Equivalents will be calculated as though one hundred percent (100%) of the goals were achieved at target level and paid as soon as reasonably possible, provided, however, that, in the case of Retirement, Dividend Equivalents shall be prorated by multiplying the amount of the Performance Units and the number of Performance Shares, as applicable, by the number of months the Participant worked at least one day during the respective Performance Period divided by the number of months in the Performance Period, to be paid, if at all, as set forth in this Section 8.6.

6. The Shares subject to Awards granted under this Plan may be either authorized but unissued or reacquired Shares, subject to the terms of Section 4.6.

7. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. Except as expressly amended hereby, no other changes or modifications to the Plan are intended or implied and, in all other respects, the Plan is hereby specifically ratified, restated and confirmed. To the extent that any provision of the Plan is inconsistent with this Amendment, the terms of this Amendment shall control. The Plan and this Amendment shall be read and construed as one document.

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SCAN TOVIEW MATERIALS & VOTE SHAREOWNER SERVICESSMP.O. BOX 64945VOTE BY INTERNETST. PAUL, MN 55164-0945Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of informationup until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have yourproxy card in hand when you access the web site and follow the instructions to obtain yourrecords and to create an electronic voting instruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/HAYN2022You may attend the meeting via the Internet and vote during the meeting. Have the informationthat is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m.Eastern Time the day before the cut-off date or meeting date. Have your proxy card in handwhen you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope wehave provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,Edgewood, NY 11717.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:D64728-P65123KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYHAYNES INTERNATIONAL, INC. The Board of Directors Recommends a Vote FOR Items 1 through 8.Election of Directors:1.Donald C. Campion 2.Robert H. Getz 3.Dawne S. Hickton 4.Michael L. Shor 5.Larry O. Spencer 6.Ratification of Independent Registered Public Accounting Firm: To approve the appointment of Deloitte & Touche, LLP as Haynes’ independent registered public accounting firm for the fiscal year ending September 30, 2022. 7.Amendment No. 1 to the 2020 Incentive Compensation Plan: To approve Amendment No. 1to the Haynes International, Inc. 2020 Incentive Compensation Plan. 8.Advisory vote on Executive Compensation: To approve executive compensation in a non-binding advisory vote. 9.Other Matters: In their discretion, to transact such other business as may properly come before the Annual Meeting. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1 THROUGH 8, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO PROPOSAL 9.For Against AbstainPlease sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons must sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date

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HAYNES INTERNATIONAL, INC.ANNUAL MEETING OF STOCKHOLDERSTuesday, February 22, 2022 10:00 a.m. (EST)Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.D64729-P65123Haynes International, Inc.1020 West Park Avenue, P.O. Box 9013proxyKokomo, Indiana 46904-9013This Proxy is solicited by the Board of Directors for use at the Annual Meeting on Tuesday, February 22, 2022, or any adjournment thereof.This Proxy, when properly executed, will be voted as directed, but, if not otherwise directed, this Proxy will be voted FOR the approval of Proposals 1 through 8. On any other matters that may properly come before the Annual Meeting, this Proxy will be voted in accordance with the best judgment of the proxies.By signing the Proxy, you revoke all prior proxies and appoint Michael L. Shor, Daniel W. Maudlin and Janice W. Gunst, and each of them, with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments. Receipt of the Notice of Meeting of Stockholders of the Company, the Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021 is hereby acknowledged.This Proxy may be revoked by the undersigned at any time before it is exercised by (i) executing and delivering to the Company a later-dated Proxy, (ii) attending the virtual Annual Meeting and voting online during the meeting, (iii) giving written notice of revocation to the Secretary of the Company or (iv) entering a new vote over the Internet or by telephone. See reverse for voting instructions.

	Page
GENERAL INFORMATION		1
PROPOSALS FOR 2023 ANNUAL MEETING		2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS		3
SECURITY OWNERSHIP OF MANAGEMENT		4
PROPOSALS TO BE VOTED UPON		5
ELECTION OF DIRECTORS		5
Nominees		5
Business Experience of Nominated Directors		6
CORPORATE GOVERNANCE		8
Board Committee Structure		8
Meetings of the Board of Directors and Committees		10
Meetings of Non-Management Directors		10
Independence of the Board of Directors and Committee Members		10
Family Relationships		11
Conflict of Interest and Related Party Transactions		11
Governance Committee and Director Nominations		11
Code of Ethics		12
Board of Directors’ Role in Risk Oversight		13
Communications with Board of Directors		13
Director Compensation Program		13
Compensation Committee Interlocks and Insider Participation		15
EXECUTIVE COMPENSATION		15
Compensation Committee Report		15
Compensation Discussion and Analysis		15
Compensation Tables and Narrative Disclosure		27
CEO Pay Ratio		41
Environmental, Social and Governance Matters		42
Human Capital Resources		44
AUDIT COMMITTEE REPORT		46
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		46
APPROVAL OF AMENDMENT NO. 1 TO HAYNES INTERNATIONAL, INC. 2020 INCENTIVE COMPENSATION PLAN		47
ADVISORY VOTE ON EXECUTIVE COMPENSATION		54
OTHER MATTERS		55