Northern Technologies International : 2024 Proxy Statement

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

January 19, 2024

The Annual Meeting of Stockholders of Northern Technologies International Corporation, a Delaware corporation, will be held at our corporate executive offices located at 4201 Woodland Road, Circle Pines, Minnesota 55014, beginning at 8:00 a.m., Central Standard Time, on Friday, January 19, 2024, for the following purposes:

1. To elect eight persons to serve as directors until our next annual meeting of stockholders or until their respective successors are elected and qualified.
2. To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the accompanying proxy statement.
3. To ratify the appointment of Baker Tilly US, LLP as our independent registered public accounting firm for the fiscal year ending August 31, 2024.
4. To approve the Northern Technologies International Corporation 2024 Stock Incentive Plan.
5. To transact such other business as may properly come before the meeting or any adjournment of the meeting.

Only those stockholders of record at the close of business on November 21, 2023 will be entitled to notice of, and to vote at, the meeting and any adjournments thereof. A stockholder list will be available at our corporate offices beginning January 9, 2024 during normal business hours for examination by any stockholder registered on NTIC's stock ledger as of the record date, November 21, 2023, for any purpose germane to the Annual Meeting.

By Order of the Board of Directors,

Matthew C. Wolsfeld

Corporate Secretary

December 4, 2023

Circle Pines, Minnesota

Important: Whether or not you expect to attend the meeting in person, please vote by the Internet or telephone, or request a paper proxy card to sign, date and return by mail so that your shares may be voted. A prompt response is helpful and your cooperation is appreciated.

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TABLE OF CONTENTS
	Page
PROXY STATEMENT SUMMARY	4
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING	15
Date, Time, Place and Purposes of Meeting	15
Who Can Vote	15
How You Can Vote	15
How Does the Board Recommend that You Vote	17
How You May Change Your Vote or Revoke Your Proxy	17
Quorum Requirement	17
Vote Required	17
Other Business	19
Procedures at the Annual Meeting	19
Householding of Annual Meeting Materials	19
Proxy Solicitation Costs	20
PROPOSAL ONE-ELECTION OF DIRECTORS	21
Number of Directors	21
Nominees for Director	21
Information about Current Directors and Board Nominees	21
Additional Information about Current Directors and Board Nominees	22
Board Recommendation	25
PROPOSAL TWO-ADVISORY VOTE ON EXECUTIVE COMPENSATION	26
Introduction	26
Board Recommendation	27
PROPOSAL THREE-RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM	28
Appointment of Independent Registered Public Accounting Firm	28
Audit, Audit-Related, Tax and Other Fees	28
Audit Committee Pre-Approval Policies and Procedures	29
Board Recommendation	29
PROPOSAL FOUR-APPROVAL OF NORTHERN TECHNOLOGIES INTERNATIONAL
CORPORATION 2024 STOCK INCENTIVE PLAN	30
Background	30
Reasons Why You Should Vote in Favor of the 2024 Plan	31
Summary of Sound Governance Features of the 2024 Plan	32
Background for Shares Authorized for Issuance	32
Summary of the 2024 Plan Features	34
U.S. Federal Income Tax Consequences	43
New Plan Benefits	45
Board Recommendation	45
STOCK OWNERSHIP	46
Beneficial Ownership of Significant Stockholders and Management	46
Stock Ownership Guidelines	48
Securities Authorized for Issuance Under Equity Compensation Plans	48
CORPORATE GOVERNANCE	50
Governance Best Practices	50
Corporate Governance Guidelines	51
Board Leadership Structure	51
Director Independence	52

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Board Meetings and Attendance	52
Board Committees	52
Audit Committee	52
Compensation Committee	54
Nominating and Corporate Governance Committee	56
Director Nominations Process	57
Board Diversity Matrix	58
Board Oversight of Risk	59
Board Oversight of Strategy	60
Board and Board Committee Evaluations	60
Code of Ethics	60
No Political Contributions	60
Policy Regarding Director Attendance at Annual Meetings of Stockholders	60
Complaint Procedures	61
Stockholder Engagement	61
Process Regarding Stockholder Communications with Board of Directors	62
DIRECTOR COMPENSATION	63
Summary of Cash and Other Compensation	63
Non-Employee Director Compensation Program	64
Consulting Agreement	66
EXECUTIVE COMPENSATION	67
Compensation Review	67
Summary of Cash and Other Compensation	77
Outstanding Equity Awards at Fiscal Year End	78
Option Exercises for Fiscal 2023	79
Stock Incentive Plans	79
Post-Termination Severance and Change in Control Arrangements	81
Pay Versus Performance Disclosure	83
Compensation Committee Interlocks and Insider Participation	88
RELATED PERSON RELATIONSHIPS AND TRANSACTIONS	89
Introduction	89
Procedures Regarding Approval of Related Party Transactions	89
Description of Related Party Transactions	90
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2025 ANNUAL
MEETING OF STOCKHOLDERS	91
COPIES OF FISCAL 2023 ANNUAL REPORT	91
________________

References in this proxy statement to:

• "NTIC," "we," "us," "our," or the "Company" refer to Northern Technologies International Corporation;
• "Board" refer to the Board of Directors of NTIC;
• "Annual Meeting" refer to our 2024 Annual Meeting of Stockholders; and
• "Fiscal 2023 Annual Report" or "Fiscal 2023 Annual Report to Stockholders" refer to our Annual Report to Stockholders for fiscal 2023, including our Annual Report on Form 10-K for the year ended August 31, 2023, being made available together with this proxy statement.

Information on our website and any other website referenced herein is not incorporated by reference into, and does not constitute a part of, this proxy statement.

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• and ® denote trademarks and registered trademarks of Northern Technologies International Corporation or our affiliates, registered as indicated in the United States. All other trademarks and trade names referred to in this proxy statement are the property of their respective owners.

We intend to make this proxy statement and our Fiscal 2023 Annual Report available on the Internet and to commence mailing of the notice to all stockholders entitled to vote at the Annual Meeting beginning on or about December 4, 2023. We will mail paper copies of these materials, together with a proxy card, within three business days of a request properly made by a stockholder entitled to vote at the 2024 Annual Meeting of Stockholders.

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PROXY STATEMENT SUMMARY

________________

This executive summary provides an overview of the information included in this proxy statement. We recommend that you review the entire proxy statement and our Fiscal 2023 Annual Report to Stockholders before voting.

2024 ANNUAL MEETING OF STOCKHOLDERS

DATE AND TIME

Friday, January 19, 2024 8:00 a.m. (Central Time)

LOCATION

4201 Woodland Road Circle Pines, MN 55014

RECORD DATE

Proposal

Proposal No. 1: Election of directors

Proposal No. 2: Advisory vote on executive compensation

Proposal No. 3: Ratification of appointment of independent registered public accounting firm

Proposal No. 4: Approval of Northern Technologies International Corporation 2024 Stock Incentive Plan

Board's Vote
Page
Recommendation
FOR	21
FOR	26
FOR	28
FOR	30

Holders of record of our common stock at the close of business on

November 21, 2023November 21, 2023 are entitled to notice of, to attend, and to vote at the 2024 Annual Meeting of Stockholders or any continuation, postponement, or adjournment thereof.

On or about December 4, 2023, we expect to begin mailing a Notice of Internet Availability of Proxy Materials to stockholders of record as of November 21, 2023 and post our proxy materials on the website referenced in the Notice of Internet Availability of Proxy Materials (www.proxyvote.com).

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 19, 2024

This proxy statement and our Fiscal 2023 Annual Report to Stockholders are available on the Internet, free of charge, at www.proxyvote.com. On this website, you will be able to access this proxy statement, our Fiscal 2023 Annual Report to Stockholders, and any amendments or supplements to these materials that are required to be furnished to stockholders. We encourage you to access and review all of the important information contained in the proxy materials before voting.

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FISCAL 2023 BUSINESS HIGHLIGHTS

Below are highlights of our financial, operational and strategic achievements during fiscal 2023.

Financial
Net Sales	Our net sales increased 7.7% to a record $79,902,952 during fiscal 2023
	compared to fiscal 2022 primarily due to sales growth within our
	ZERUST® industrial and Natur-Tec product categories, as a result of
	higher global demand.
Quarterly Cash Dividends	We paid a quarterly cash dividend of $0.07 per share during each quarter
	of fiscal 2023.
Operational
15 Joint Ventures	Our 15 joint ventures provide us with access to global markets with an
	annual global market potential estimated at $500 million.
10 Operating Subsidiaries	We maintain 10 wholly or majority-owned operating subsidiaries in
	North America, South America, Europe and Asia.
Over 60 Countries	Our network of joint ventures and subsidiaries allows us to operate in
	over 60 countries worldwide, allowing us reach customers globally.
Strategic
Industrial Manufacturing	ZERUST® rust and corrosion inhibiting packaging solutions resolve
Industry	corrosion problems while reducing operating costs, increasing
	productivity and enhancing customer satisfaction. During fiscal 2023,
	ZERUST® industrial sales increased by 2.1% compared to fiscal 2022 as
	a result of increased demand.
Oil and Gas Industry	Our global network of trained corrosion management professionals and
	channel partners help us develop specialized corrosion mitigation
	solutions for the oil and gas industry, provide local support, and conduct
	client training. ZERUST® oil and gas net sales increased 69.2% during
	fiscal 2023 compared to fiscal 2022 primarily as a result of new
	opportunities with new customers.
Bioplastics Industry	Our Natur-Tec® biobased and compostable plastics are manufactured
	using NTIC's patented and/or proprietary technologies and are intended
	to replace conventional plastics and thereby reduce our customers'
	carbon footprint and provide environmentally sound waste disposal
	options. Sales of our Natur-Tec® products increased by 8.7% during
	fiscal 2023 compared to fiscal 2022 due to re-opening initiatives and
	government regulation related to disposable plastics.

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CORPORATE GOVERNANCE HIGHLIGHTS

• Annual election of directors
• Majority of independent directors
• Independent Board Chairman
• Three fully independent Board committees
• Corporate governance guidelines
• Annual review of governance documents
• Stock ownership guidelines for executive officers and directors

• Recent Board refreshment efforts
• 100% Board meeting attendance by directors
• No poison pill
• Annual say-on-pay vote
• Robust clawback policy
• No guaranteed bonuses or significant perks
• Limits on board memberships held

STOCKHOLDER ENGAGEMENT

We are committed to a robust and proactive stockholder engagement program. The Board of Directors values the perspectives of our stockholders, and feedback from stockholders on our business, corporate governance, executive compensation, and sustainability practices are important considerations for Board discussions throughout the year. Some of the actions we have taken in response to feedback from proxy advisory firms and stockholders over the last several years are described below.

What We Heard	What We Did
Encourage Board refreshment	We added Cristina Pinho to our Board in January 2023.
Increase Board gender diversity	We added Nancy E. Calderon, Sarah E. Kemp and
	Cristina Pinho to the Board of Directors and updated our
	Nominating and Corporate Governance Committee
	Charter to include responsibility for making
	recommendations to the Board of Directors regarding
	director diversity.
Increase stockholder influence over	We adopted a "plurality plus" vote standard for
director elections	uncontested director elections, with a director resignation
	policy, instead of a simple plurality vote standard.
Align long-term incentives	We extended the vesting of our annual stock option
	grants to three-year vesting in response to a concern
	raised by one of our institutional stockholders.

Increase visibility of Environmental, Social and Governance ("ESG") principles

We adopted a Health, Safety and Environment Policy as well as a Human Rights Policy to formalize our approach and further our goals with respect to these matters, as described below. We have also added an ESG section to our investor relations website to increase visibility.

Ensure the recovery of incentive	We adopted a robust clawback policy which applies to
compensation based on incorrect	not only financial restatements but also if an executive
calculations that resulted in a financial	engages in egregious conduct that is substantially
restatement or egregious behavior	detrimental to NTIC.
Align the interests of executive officers and	We adopted stock ownership guidelines applicable to our
directors with those of stockholders	executive officers and directors to ensure that their
	interests would be closely aligned with those of our
	stockholders.

6

BOARD OF DIRECTORS COMPOSITION AND DIVERSITY

The Board of Directors understands the importance of adding diverse, experienced talent to the Board of Directors in order to establish an array of experience and strategic views. The Nominating and Corporate Governance Committee is committed to refreshment efforts to ensure that the composition of the Board of Directors and each of its committees encompasses a wide range of perspectives and knowledge.

All of our Board nominees collectively bring tremendous diversity to the Board. Each nominee is a strategic thinker and has varying, specialized experience in the areas relevant to NTIC and its businesses. Moreover, their collective experience covers a wide range of geographies and industries, and roles in academia, corporate governance and government. Our eight current directors range in age from 56 to 75; three of the eight directors are women; two are of Asian descent; one is of African descent; one is a citizen of Brazil, one is a citizen of the Republic of Korea and one is a citizen of Germany.

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BOARD OF DIRECTORS NOMINEES

Below are the director nominees for election by stockholders at the 2024 Annual Meeting of Stockholders for a one-year term. All director nominees are current directors and attended 100% of all Board meetings and 100% of the sum of all meetings of the Board of Directors and its committees, as applicable.

Director	Age	Serving Since	Independent
Nancy E. Calderon	64	2019	Yes
Sarah E. Kemp	56	2019	Yes
Sunggyu Lee, Ph.D.	71	2004	Yes
G. Patrick Lynch	56	2004	No
Ramani Narayan, Ph.D.	74	2004	No
Richard J. Nigon	75	2010	Yes
Cristina Pinho	65	2023	Yes
Konstantin von Falkenhausen	56	2012	Yes

The Board of Directors recommends a vote "FOR" each of these nominees.

COMMITTEE COMPOSITION

The Board of Directors maintains a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, each comprised of the following directors:

Director	Audit	Compensation	Nominating and Corporate
	Committee	Committee	Governance Committee
Nancy E. Calderon	●		●
Sarah E. Kemp			●
Sunggyu Lee, Ph.D.		●
G. Patrick Lynch
Ramani Narayan, Ph.D.
Richard J. Nigon	●	●	●
Cristina Pinho			●
Konstantin von Falkenhausen	●	●

KEY QUALIFICATIONS

The following are some key qualifications, skills and experiences of our directors.

Director	Leadership/	Financial	International	Prior Board	Government	Bioplastics
	Management	Expertise	Experience	Experience		Experience		Industry
								Experience
Nancy E. Calderon	●	●	●	●
Sarah E. Kemp	●		●	●		●
Sunggyu Lee, Ph.D.	●		●
G. Patrick Lynch	●		●
Ramani Narayan, Ph.D.	●		●			●		●
Richard J. Nigon	●	●		●
Cristina Pinho	●		●	●		●
Konstantin von	●	●	●
Falkenhausen

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