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Reviewing the independence, authority and effectiveness of the risk management function, including staffing levels and qualifications;



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Approving the appointment of the CEO's designated Risk Officer; and



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Attending to other matters as the Chair or other members of the Committee determine relevant to the Committee's oversight of strategic and operating risk assessment and management.

Meetings of the Board of Directors and Committees

        The Board of Directors held fourteeneleven meetings during the fiscal year ended September 30, 2017.2020. During fiscal 2017,2020, no member of the Board of Directors attended fewer than 75% of the aggregate of meetings of the Board of Directors and meetings of any committee of the Board of Directors of which he or she was a member held during his or her tenure with the Board.as a director. 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 of Directors are encouraged but not required,and expected to attend Haynes' annual meetings of stockholders. All of the members of the Board of Directors attended

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Haynes' 20172020 annual meeting in person. The following chart shows the number of meetings in fiscal 20172020 of each of the standing committees of the Board of Directors at which a quorum was present:

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 2017,2020, the non-management directors met in executive session foursix times. When meeting in executive session, the presiding person was the Chairman, Mr. Shor.Chairman.

Independence of the Board of Directors and Committee Members

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

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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 stockholders.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 10%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. TheManagement discloses the

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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 Board of Directors.Audit Committee. The Board of DirectorsAudit 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 Board of Director'sAudit 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 directorsmembers 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 Board of DirectorsAudit Committee which authorizes the contract or transaction. Haynes did not enter into any transactions in fiscal 20172020 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 regulatory compliance,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.companies, or similar experience in a governmental or non-profit setting. The Governance Committee does not have a formal diversity policy but 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, 2020, diverse persons constituted 50% of the independent members of the Board of Directors, and the same directors are nominees for 2021.

        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 Committee will consider candidates recommended by stockholders, provided the names of such persons, accompanied by relevant biographical information,

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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 not so recommended.recommended by the Board or Governance

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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 named 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 and employees. This Code is posted on the Company's website at www.haynesintl.com/CodeofBusinessConductandEthics.pdfinvestor-relations/our-company/code-of-business-conduct-and-ethics. The Audit Committee of the Board regularly 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 Committee is designed to act as the primary tool to keep risk as an important part of the Board'sManagement program, including through regular reporting and the various committees' deliberations throughout the yeardiscussion, and by working with management to identify and prioritize enterprise risks—the specific financial, operational, business and strategic risks that the

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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, with the assistance of the Risk Committee.Directors. The Audit Committee oversees

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management of market and operational risks that could have a financial impact, such as those relating to internal controls liquidity or raw materials. With the assistance of the Risk Committee, theliquidity. 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.

        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 future risk for the Company and to address them in its long-term planning process. 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.

Changes in 2020 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 2017.2020. In consultation with its independent compensation consultant, Total Rewards Strategies, the Compensation Committee reviews the compensation paid to non-management directors and recommends changes to the Board of Directors, as appropriate.

        In consultation with Total Rewards Strategies, for fiscal 2020, the Compensation Committee initially established a target equity grant amount of $105,000 for the Chairman of the Board and $85,000 for each remaining non-employee Director. On November 19, 2019, the Chairman of the Board was granted 2,838 shares of restricted stock and each remaining non-employee director was granted 2,297 shares of restricted stock, pursuant to the Haynes International, Inc. 2016 Incentive Compensation Plan. In December 2019, after reviewing the Company's director compensation program and consulting with its compensation consultant, the Committee recommended and the Board approved an increase in the equity grant amount by $10,000 in order to increase the equity portion of the total amount of compensation paid to the Company's directors in line with its comparator group. Pursuant to the Haynes International, Inc. 2016 Incentive Compensation Plan, on February 5, 2020, each non-employee director was granted 272 of restricted stock, except for Mr. Spencer who received 2,583 shares of restricted stock, the difference being reflective of the timing of Mr. Spencer's election to the Board of Directors during a blackout period in which his initial grant upon election could not be made. In granting the awards, the Compensation Committee considered information provided by Total

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Rewards Strategies on methods of encouraging long-term stock ownership by directors, as well as information regarding how comparator group companies utilized restricted or deferred stock.

        In December 2019, after reviewing the Company's director compensation program and consulting with its compensation consultant, the Board approved a reduction in the annual committee retainer fees, effective January 1, 2020, to $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

        Effective in April 2020, the Board of Directors temporarily reduced all of its cash fees (including committee service-related fees) by 10% in response to the economic impacts of COVID-19. Such reductions will remain in place until otherwise determined.

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 2017.2020, giving effect to the changes discussed above.

Annual Cash Retainer

        In fiscal 2020, non-management members of the Board of Directors received a reduced $57,000 annual retainer related to their Board of Directors duties and responsibilities, which reflects the COVID-related reduction discussed above. The retainer was paid in four installments of $15,000, $15,000, $13,500 and $13,500. Additionally, there was a $42,750 annual retainer for serving as Chairman of the Board, similarly reduced, paid in four quarterly installments of $11,250, $11,250, $10,125 and $10,125.

Committee Fees

        As noted above, committee service fees were further reduced in April 2020 by the COVID-related reductions in April 2020. In fiscal 2020, directors received an additional annual retainer of $9,500 for each standing committee on which they served, paid in four quarterly installments of $2,500, $2,500, $2,250 and $2,250. In addition, there was a $16,625 annual retainer for serving as the chairman of the Audit Committee, a $11,875 annual retainer for serving as the chairman of the Compensation Committee and a $9,500 annual retainer for serving as the chairman of the Corporate Governance and Nominating Committee of the Board of Directors. Each of the amounts noted above reflects the COVID-related reductions effective in April 2020.

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DirectorEquity Compensation Analysis

        Total Rewards Strategies, the Compensation Committee's independent compensation consulting firm, reviewed the Board of Directors' total compensation in fiscal 2017, including Board of Directors and Committee annual retainers and restricted stock grants. Specifically, Total Rewards Strategies provided a report to the Compensation Committee evaluating the Haynes fiscal 2016 director compensation and the comparator group companies' director compensation (as identified under "Committee Procedures") and making recommendations with respect to Haynes' fiscal 2017 director compensation. Based upon its review of this information, the Compensation Committee, in consultation with Total Rewards Strategies, decided to maintain the existing director compensation structure for 2017.

Annual Retainer

        Non-management membersMembers of the Board of Directors receive a $60,000 annual retainer related to their Boardare granted shares of Directors duties and responsibilities, which is paid in four equal installments of $15,000 each. Additionally, there is a $40,000 annual retainer for serving as Chairman of the Board, also paid in four equal installments. The Company reimburses directors for their 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.

Committee Fees

        Directors receive an additional annual retainer of $15,000 for each standing committee on which they serve, paid in four equal installments. In addition, there is a $17,500 annual retainer for serving as the chairman of the Audit Committee, a $12,500 annual retainer for serving as the chairman of the Compensation Committee or the Risk Committee and a $10,000 annual retainer for serving as the chairman of any other committee of the Board of Directors. In fiscal 2017, the Board of Directors formed a Strategic Committee for the purposes of reviewing and analyzing potential add-on acquisitions and capital allocation. Committee members received a retainer of $40,000time-based restricted stock annually. Such amounts were adjusted in fiscal 2017.

Equity2020 as set forth under "Director Compensation

        On November 22, 2016, each director then in office was granted 2,025 shares of restricted stock pursuant to the Haynes International, Inc. 2016 Incentive Compensation Plan. In making its decision to award restricted stock, the Compensation Committee considered information provided by Total Rewards Strategies on methods of encouraging long-term stock ownership by directors, as well as information regarding how comparator group companies utilized restricted or deferred stock. Program". 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 2016 Incentive Compensation Plan. Upon their respective retirements, 2,569 restricted shares owned by Mr. Wall vested and 2,297 restricted shares owned by Mr. Corey vested.

        Additionally,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 throughout the deferral period on deferred restricted stock.

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 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 8, 2021, given that the guidelines allow for a five (5) year accumulation period, all of the directors received dividends throughout fiscal 2017 on restricted stock heldto whom the ownership guideline applied met the guideline.

        The share ownership amount for each non-employee director as of January 8, 2021 is summarized below and is based on the record dateclosing price of the Company's stock as of January 8, 2021.

Total Compensation

        In accordance with the 2020 Incentive Compensation Plan the annual maximum equity award for each dividend paid duringdirector is $250,000, and the year.maximum annual total compensation (cash and equity) limit is $350,000 for each director.

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.

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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.

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Compensation Committee Interlocks and Insider Participation

        The members of the Compensation Committee as of September 30, 20172020 were Messrs. Getz,Ms. Hickton, Mr. Campion and Wall.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, 2017.2020.

SUBMITTED BY THE COMPENSATION COMMITTEE

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

Compensation Discussion and Analysis

20172020 Business Summary

        In fiscal 2017,2020, the Company:Company results, which were heavily impacted by both the COVID-19 pandemic and the issues relating to the grounding of the Boeing 737 MAX, were as follows.

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Generated cash from operations of $13.1 million onNet revenues of $395.2$380.5 million in fiscal 2020 as compared to $490.2 million in fiscal 2019 and net loss of $(10.2) million;$6.5 million in fiscal 2020 compared to net income of $9.7 million in fiscal 2019 (which included $20.9 million in special non-recurring charges).



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Invested $15.0Backlog decrease to $153.3 million into capital projects; andat the end of fiscal 2020, down $81.9 million from $235.2 million at the end of fiscal 2019.



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Paid approximately $11.0Net cash provided from operating activities of $36.2 million in dividendsfiscal 2020 compared to stockholders, resulting in a cumulative amountnet cash provided from operating activities of approximately $85.0$43.0 million in dividends paid to stockholders over the last 32 consecutive quarters.fiscal 2019, a decrease of $6.9 million.

Overview

        This Compensation Discussion and Analysis describes the key principles and approaches used to determine the compensation in fiscal 20172020 for Mark M. Comerford,Michael L. Shor, the Company's principal executive officer; Daniel W. Maudlin, the Company's principal financial officer; and Scott R. Pinkham,David L. Strobel, Venkat R. Ishwar and Marlin C. Losch III, the Company's other three most highly compensated executive officers in fiscal 2017.2020, 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",

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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 20172020

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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, and making decisions regarding specific compensation to be paid or awarded to them. The Compensation Committee has responsibility for establishing and monitoring the 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. Comerford's fiscal 2017 baseShor's salary was established by the employment agreement he renewedExecutive Employment Agreement between Mr. Shor and the Company entered into on September 1, 2018 (as reduced by the 10% temporary salary reduction put in fiscal 2016, as modified by subsequent Compensation Committee actions. Mr. Comerfordplace in April 2020 for the Named Executive Officers and Mr. Maudlin,other executive officers of the Company'sCompany discussed below). 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 based ondetermined 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.



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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.

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        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, 2020, the ten-person executive team included three diverse members.

        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 20172019 annual meeting of stockholders, the stockholders voted on a non-binding advisory proposal to approve the compensation of the Named Executive Officers. Approximately 97.90%96.59% 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 20172019 proxy statement, the Compensation Committee did not implement material changes to the executive compensation programs as a result of the stockholders' advisory vote.

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20172020 Compensation Plan Highlights

        The design of the Company's executive compensation program for 20172020 was generally consistent with the design of the 20162019 program. The Company made several enhancements for 2017 to further drive the pay-for-performance philosophy, combined with ongoing use of many best practices, to align executive compensation and shareholder value creation. The following table highlights these enhancements:the features of the program:

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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 20162019 and fiscal 2017.2020. Total Rewards Strategies did not provide any services to the Company other than compensation consulting to the Compensation Committee in fiscal 20162019 or fiscal 2017.2020. Total Rewards Strategies' work for the Company in fiscal 20172020 did not raise any conflicts of interest.

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limited perquisites.

        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. In allocating compensation among elements, the Company believes the compensation of the Company's most senior executives, including the Named Executive Officers, who have the greatest ability to influence Company performance, should be predominately performance-based. As a result of this strategy, 67%68% of the Named Executive Officers' total target compensation, including the Chief Executive Officer's compensation, was allocated to performance-based pay in fiscal 2017.2020.

        Fiscal 20172020 Target Compensation

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.

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        The base salaries of the Named Executive Officers were generally increased at the beginning of fiscal 2020, prior to the implementation of a 10% temporary salary reduction put in place 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 will remain at the reduced amount until determined otherwise. Other than the reversal of previous reductions, no Named Executive Officer (or other executive officer of the Company) received any salary increase at the beginning of fiscal 2021. More widely across the Company, furloughs and layoffs occurred in fiscal 2017.2020, resulting in the reduction of the Company's workforce by approximately 16%. In addition, 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 officers of the Company, due to the previous 10% reduction of their base salaries in April 2020.

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        The following table provides annualized base salary information for the Named Executive Officers effective July 1, 20162019 and base salary as of July 1, 20172020 as a percentage of the median market rateMedian Market Rate for 2017:2020:

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. No such adjustments were made for fiscal 2020, and no MIP payments were earned. 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 2017,2020, 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 2017,2020, the Compensation Committee established a target by reference to the Company's net income (loss) as the sole financial goal for MIP payouts. The Board of Directors did not make any changes to the 2020 net income targets or thresholds in response to the economic effects of COVID-19.

        The Board of Directors establishes income and performance goals in order the align the interests of management with those of the Company's stockholders. Based upon fiscal 2019's net income and 2020's net loss, MIP payments in excess of the minimum threshold but less than target were made for fiscal year 2019, and no payment was made for fiscal 2020.

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        The table below lists the 20172020 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:

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        The following table sets forth the targets for net income (loss), as well as actual net income (loss) for fiscal 2017:2020:

        The Compensation Committee and the Board of Directors establishesmade some changes to the MIP structure for fiscal 2021 in response to the economic effects of the COVID-19 pandemic. The fiscal 2021 MIP program includes operating cash flow and net income and performance goals in order the align the interests of management with those of the Comapny's stockholders. Based upon fiscal 2017's net income, in accordance with that philosophy, no MIP payments were made for fiscal 2017.metrics.

Long-Term Incentives

        Stockholders approved the 2016 Incentive Compensation Plan on March 1, 2016. Grants2016, and the 2020 Incentive Compensation Plan on February 25, 2020. In fiscal 2020, grants were made under that plan in fiscal 2017.the 2016 Plan until stockholder approval of the 2020 Plan. The plan providesplans 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 planplans and believes awards available under the planplans 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. 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 20162020 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 Compensation Committee intendsCompany's policy is to ensure thatissue equity grants at a time when the Company avoids equity grantsis in connectionan "open window" for trading purposes, which customarily occurs two days after the filing of the Company's required quarterly and annual reports with the release, or the withholding, of material non-public information,Securities and Exchange Commission, and that the grant value of all equity awards is equal to

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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. 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. The Committee uses information provided by its compensation consultant and independently developed by the Committee members 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:

•

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;



•

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 executive's interests with those of the stockholders and provides an appropriate balance between long-term stock price appreciation and executive retention. In fiscal 2017,2020, the regular annual equity grants to the NEOs consisted of twenty-fivethirty-three percent (25%(33%) stock options, thirty-fivethirty-three percent (35%(33%) performance shares and fortythirty-three percent (40%(33%) time-based restricted stock.

Clawback Policy

        The Board of Directors has adopted a clawback policy that is consistent with the currently proposed 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 Policyand 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.

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Stock Ownership and Retention Guidelines

        On September 23, 2013, theThe Board of Directors has approved stock ownership guidelines applicable to executive officers and members of the Board of Directors, and those guidelines were subsequently updated.Directors. The guidelines became effective on January 1, 2014 and established the goal that, within five (5) years from the effective date or 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,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 2009 Restricted Stock Plan2016 or under the 20162020 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 a certainat all times the required amount of stock (based upon value of shares owned) after first meeting the ownership goal. As of September 30, 2020, 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 20162020 Incentive Compensation Plan.

        Under Internal Revenue Code Section 162(m), subject to an exception for qualifying performance-based compensation, Upon departure from the Company, cannot deduct compensationexecutives retain the options; provided that, in the event of over $1.0 milliontermination of employment due to death, disability (as defined in annual compensation paid to certain executive officers. Options granted pursuant to the Company's option plans2016 and 2020 Plans) or retirement (as defined in 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 the 2016 and 2020 Plans), the options are intended to qualify as qualifying performance-based compensation exempt from this deduction limitation.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

        The Compensation Committee granted stock options to the management team, including the Named Executive Officers, in November 2016.2019. The Compensation Committee believes that the stock

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options, in conjunction with the other elements of compensation described herein, align management's interests with those of the stockholders and will provide no return whatsoever if stockholders do not also realize gains. 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 $11.47$9.66 for the November 20162019 grant using a fair value methodology. The Compensation Committee then set a total pool of options for grant to all executive officers of approximately $0.5 million.$0.9 million for the November 2019 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 2017,2020, 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.

        Restricted stock and performance share grants are subject to forfeiture if employment or service terminates prior to the end of the vesting period or, in the case of performance shares, if performance

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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 plan provides for the adjustment of the number of shares covered by an outstanding grant and the maximum number of shares for which restricted stock 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.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.

20162018 Fiscal Year GrantsPerformance Share Awards

        On November 24, 2015,21, 2017, executives, including the Named Executive Officers (other than Mr. Shor and Mr. Strobe who were not then NEOs), were also granted restricted stock. Two typesawards of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the granta target amount of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the periodshares. The actual number of October 1, 2015 through September 30, 2018, which will dictate whether those restricted shares will vest or be forfeited. The performance-based shares will vest in equal installments on the first, second and third anniversaries of the grant date provided that (a) the recipient is still an employee of the Company on such date, and (b) the Company has met annual net income performance goals set by the Company's Compensation Committee, provided that, if the Company has exceeded the total net income performance goal for the three year period, restricted shares that did not vest due towere ultimately earned, as well as the Company's failure to meet the annual net incomenumber of shares of common stock that would be distributed in settling those performance goals may vestshares, was determined at the end of such three year period. The restricted shares that were subject to time-based vesting will vesta three-year performance period starting on October 1, 2017 and ending on September 30, 2020 based on the third anniversaryrelative total shareholder return (TSR) of the dateCompany compared to the 2018 TSR Peer Group. The total number of grant.performance shares earned and shares of common stock distributed could range from 0% to 200% of the target amount of performance shares granted. Participants mustwere required to be employees at the end of the performance period or the specified time period for time-based restricted stock to receive a payout, except in the event of death, disability or change in control.

2017 Fiscal Year Grants

        On November 22, 2016, executives, including the Named Executive Officers, were granted time-based restricted stock. The number of shares and value of restricted stock as of September 30, 2017 is listed in the Outstanding Awards at Fiscal Year End table on page 30. Participants must be employees at the end of the vesting period to receive a payout, except in the event of death, disability or a change in control. Participants received shares equal to 86.11% of the award amount based upon the Company's stock performance versus the stock of other companies in the TSR Peer Group.

        The 2018 TSR Peer Group for the 2018 fiscal year performance share granted consisted of the following companies: Allegheny Technologies, Carpenter Technology, Commercial Metals, Global Brass & Copper, Insteel Industries, Kaiser Aluminum, Materion Corporation, Olympic Steel, Timken Steel and Universal Stainless & Alloy Products.

2020 Fiscal Year Grants

        On November 19, 2019, executives, including the Named Executive Officers, were granted 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.

        On September 15, 2020, executives, including the Named Executive Officers were granted additional time-based restricted stock. For these shares, participants must be employees at the end of a one year vesting period for 50% of this grant and at the end of a two year vesting period for the remaining 50% of this grant. These grants were not made in replacement of any potential cash bonus payments foregone due to the Company's performance during fiscal 2020. In fact, at the time these grants were made, it was still possible that cash bonus payments could have been earned. Instead, the grants were made in part to reward the Named Executive Officers for performance during the downturn and promote retention during difficult historically unprecedented economic times and particularly challenging circumstances in the Company's industry, recognizing the value of the participants to the Company and the difficulty of replacing any of them at that time. In addition, the grants were made to motivate continued focus on safety, operations improvements and cost reduction during the difficult economic conditions resulting from the COVID-19 pandemic, further aligning the participants' interests with the Company's shareholders. The number of shares of time-based restricted stock granted in fiscal 2020 are listed in the "Grants of Plan-Based Awards Table" on page 32.

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        On November 22, 2016,21, 2019, executives, including the Named Executive Officers, were also granted awards of a target amount 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 not beare determined untilat the end of a three-year performance period starting on October 1, 20162019 and ending on September 30, 20192022, based on the relative total shareholder return (TSR) of the Company compared to the 2020 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. Please refer to the Grants of Plan Based Awards Table for information regarding the target and maximum number of shares that may be distributed under the 2017 grant. 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 fiscal 2014, 2015 and 2016, equity grants to the Company's executives, including those executives listed as NEOs for such periods, including restricted stock grants the vesting of which was subject to the achievement of relevant performance parameters. No such awards vested based on fiscal 2017 results.

        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 2016-20192020 - 2022 performance period is determined as follows.follows:

        The 2020 TSR Peer Group for the 2016 performance awards is comprised of the following 10 companies: Arconic, Inc.; Allegheny Technologies Incorporated; Carpenter Technology Corporation; Commercial Metals Company; Insteel Industries Inc.; Kaiser Aluminum Corporation; Materion Corporation; Olympic Steel, Inc; and Universal Stainless & Alloy Products, Inc.

        On November 19, 2019, executives, including the Named Executive Officers, were granted stock options that expire after ten years. The options vest 33¹/3% per year over three years from the date of grant. The number of options and exercise prices are listed in the "Grants of Plan-Based Awards Table" on page 32.

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. 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

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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 provideshistorically provided limited perquisites to certain executives. These arrangements are primarily intendedexecutives to allow those executives to increase thetheir efficiency of an executive by allowing him or her to focus on business issues and to providein business and community development opportunities. In recent

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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 2017, these2020. In fiscal 2020, those perquisites consisted of taxable automobile usage anda country club membershipsmembership for Messrs. Comerford,Mr. Losch, which membership was canceled in January of 2020, and automobile allowances for Mr. Losch and Mr. Ishwar, and Losch.which were cancelled in January of 2020. In fiscal 2017,2020, no single perquisite exceeded $10,000 per person.

Severance; Change in ControlNon-Qualified Deferred Compensation Plan

        Pursuant to his employment agreement, Mr. Comerford is entitled to compensation under certain circumstances relating to his severance from employment with the Company. In addition, the Company has entered into Termination Benefits Agreements with the Named Executive Officers (other than Mr. Comerford), which provide severance and change in control (CIC) compensation. The Compensation Committee regularly reviews these agreements as well as the list of executives eligible for such an agreement. We believe these agreements serve the best interests of the Company and our shareholders by allowing our executives to exercise sound business judgment without fear of significant economic loss in the event they lose their jobs as a resultapproved implementation of a CIC.non-qualified deferred compensation plan for independent directors and executive officers effective November 20, 2017. The Compensation Committee believes from its experienceplan provides the opportunity to defer current compensation and as advised by its Compensation Consultant that such arrangements are competitive, reasonabletaxes until a future date, and necessary to attractreceive tax deferred investment returns on deferred amounts. The plan allows directors to defer up to 100% of their annual cash retainers and retain key executives. These agreements do not materially affect the Compensation Committee'sup to 100% of their annual compensation determinations.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

        Effective October 1, 2008, Mark M. Comerford was appointed President and CEO of the Company. With the recommendation and approval of the Compensation Committee, theThe Company entered into an Employment Agreement with Mr. Comerford on September 8, 2008,1, 2018, under which was amended August 6, 2009. The agreement'sMr. Shor agreed to serve as the President and Chief Executive Officer of the Company on a full-time basis for an initial term began at the close of businessending on September 30, 20082020, provided that the initial employment term automatically extends for additional one-year periods commencing on October 1, 2020 and ended 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 September 30, 2011 but1, 2018 Employment Agreement, Mr. Shor is (a) entitled to receive a base salary at a rate of $580,000 per year, subject to automatic extension for one year periods thereafter assuming mutual consent of the Company and Mr. Comerford. The agreement was extendedadjustment as of October 1, 2017. Pursuant to the agreement as modifiedapproved by the Compensation Committee (b) eligible to receive an annual bonus ranging from 40% to 120% of Mr. Comerford'sShor's base salary for(with the target amount set at 80%), based upon the achievement by the Company of specific performance requirements measured over the Company's fiscal 2017 was $619,000 per year, (94% of the median Comparator Group CEO salary), with bonus targets to beas determined by the Compensation Committee, annually(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. His salary will remain at that reduced rate until determined otherwise by agreement of Mr. Shor and the Compensation Committee.

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

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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 or atNovember 2, 2017 are considered "grandfathered" and compensation paid under such arrangements will continue to be deductible until the commencementarrangements 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 applicable fiscal year.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 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.Officers in fiscal 2020.

Summary Compensation Table

        The narrative and footnotes below describe the total compensation disclosed in the below Summary Compensation Table for fiscal 2015, 20162018, 2019 and 20172020 to the Named Executive Officers, each of whom was serving as an executive officer on September 30, 2017, the last day of the Company's fiscal year.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 2015, 20162018, 2019 and 2017,2020, including any amounts invested by the Named Executive Officers in the Company's 401(k) plan.

Table Base salary for fiscal 2020 reflects the 10% reduction in salary effective as of ContentsApril 2020.

        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 2015, 20162018, 2019 and 2017.2020. For options issued in fiscal 2015, 20162018, 2019 and 2017,2020, 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 2015, 20162018, 2019 and 20172020 by the Named Executive Officers under the 2015, 20162017, 2018 and 20172019 MIP.

        Change in Pension Value and Nonqualified Deferred Compensation Earnings—This column represents the actuarial increase during fiscal 2015, 20162018, 2019 and 20172020 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 2015, 20162018, 2019 and 20172020 not reported in previous columns, such as the

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