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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment Number 1)

(Mark One)

For the fiscal year ended September 30, 2014

or

For the transition period from              to              

Commission file number 001-33288

HAYNES INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code (765) 456-6000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes  x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes  x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes  o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes  o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. (See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes x No

As of March 31, 2014, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $494,333,982 based on the closing sale price as reported on the NASDAQ Global Market. Shares of common stock held by each executive officer and director and by each person who owns 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

12,418,471 shares of Haynes International, Inc. common stock were outstanding as of November 19, 2014.

DOCUMENTS INCORPORATED BY REFERENCE

None.

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EXPLANATORY NOTE

Haynes International, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended September 30, 2014 (the “Form 10-K Filing”), which was originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 20, 2014, solely to set forth information required by Items 10, 11, 12, 13 and 14 of Part III of Form 10-K because the Company did not file a definitive proxy statement containing such information within 120 days after the end of its fiscal year ended September 30, 2014. This Amendment amends and restates in its entirety Items 10, 11, 12, 13 and 14 of Part III. In addition, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Item 15 of Part IV of the original Form 10-K Filing has been amended and restated solely to include as exhibits new certifications by the Company’s principal executive officer and principal financial officer.

Except as expressly set forth herein, this amendment does not reflect events occurring after the date of the original Form 10-K Filing or modify or update any of the other disclosures contained therein in any way other than as required to reflect the amendments discussed above. Accordingly, this amendment should be read in conjunction with the original Form 10-K Filing and the Company’s other filings with the SEC.

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Part III

Item 10.  Directors, Executive Officers and Corporate Governance

The following table and information below sets forth the name, age and position with the Company of each of our directors, the period during which each director has served as such, as well as additional information.  Please see Item 1. for biographical information regarding our executive officers.

Business Experience Directors

John C. Corey has been a director and the Chairman of the Board since August 31, 2004. Mr. Corey also serves as a member of the Corporate Governance and Nominating Committee and the Risk Committee of the Board. Since January 2006, Mr. Corey has served as President, Chief Executive Officer and a director of Stoneridge, Inc., a global manufacturer of electrical and electronic components, modules and systems for the automotive, medium- and heavy-duty truck, agricultural and off-highway vehicle markets. From October 2000 through December 2005, Mr. Corey served as the President, Chief Executive Officer and a director of Safety Components International, Inc., a global manufacturer of automotive airbags. Mr. Corey serves on the board and is Chairman of the Motor Equipment Manufacturers Association, which represents the interest of suppliers to the motor vehicle industry.  The Board believes Mr. Corey’s extensive experience as a President and Chief Executive Officer, garnered in service of a New York Stock Exchange listed corporation, as well as substantial operations, international and business development experience, make him well qualified to serve as a director.

Mark M. Comerford was elected President and Chief Executive Officer and a director of the Company in October 2008. Before joining the Company, from 2004 to 2008, Mr. Comerford was President of Brush Engineered Materials Alloy Division and President of Brush International, Inc., affiliates of Materion Corporation, formerly known as Brush Engineered Materials, Inc., a company that manufactures high-performance materials. The Board believes Mr. Comerford’s years of experience driving international growth at various advanced materials manufacturing companies provide valuable strategic insights to the Board. In addition, his leadership experience and acumen in strategic and operating roles based in the United States and Asia, as well as his experience as a top executive at Haynes, all make him well qualified to serve as a director.

Donald C. Campion has been a director since August 31, 2004. Mr. Campion also serves as the Chairman of the Audit Committee and as a member of the Risk Committee and the Compensation Committee of the Board.  Mr. Campion has also served on several company boards, both public and private, and currently serves on two private company boards as audit committee chair and as a member of various board committees.  Mr. Campion previously served as Chief Financial Officer of several companies, including VeriFone, Inc., Special Devices, Inc., Cambridge, Inc., Oxford Automotive, Inc., and Delco Electronics Corporation. The Board believes Mr. Campion’s substantial tax and accounting experience built through his career in finance at several significant corporations, his work in engineering and lean manufacturing and his experience serving as a director of other companies make him well qualified to serve as a director. Mr. Campion’s tax and accounting acumen also qualify him as the Company’s Audit Committee financial expert.

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Robert H. Getz has been a director since March 31, 2006. Mr. Getz also serves as the Chairman of the Risk Committee and as a member of the Audit and Compensation Committees of the Board. Mr. Getz is a private investor and, since 1996, has been a Managing Director and Partner of Cornerstone Equity Investors, LLC, a New York-based private equity investment firm which he co-founded. Mr. Getz also serves as a director of CML Metals Corporation and Crocodile Gold Corp. Mr. Getz formerly served on the Boards of Directors of Centurion International, Inc., MDN, Inc., Novatel Wireless, Inc., Global Alumina and SITEL Corporation. The Board believes Mr. Getz’s extensive experience as a director of other companies, as well as the wide variety of his operating experience, enables him to share with the Board valuable perspectives on a variety of issues relating to management, strategic planning, tactical capital investments, mergers and acquisitions and international growth.

Timothy J. McCarthy has been a director since August 31, 2004. Mr. McCarthy also serves as the Chairman of the Compensation Committee and as a member of the Audit Committee of the Board. Mr. McCarthy served as President and Chief Executive Officer of C.E. Minerals, an industrial mineral business, from 1985 until 2008 and as Chairman from 2008 until 2012. The Board believes Mr. McCarthy’s qualifications include, among other things, his leadership and extensive operational and international management experience.

Michael L. Shor has been a director since August 1, 2012. Mr. Shor also serves on the Compensation Committee, the Risk Committee and the Corporate Governance and Nominating Committee of the Board. Mr. Shor retired as Executive Vice President—Advanced Metals Operations & Premium Alloys Operations of Carpenter Technology Corporation on July 1, 2011 after a thirty-year career with Carpenter Technology. The Board believes Mr. Shor’s management experience and extensive experience in the metals industry enable him to advise the Company on its strategic direction, operational excellence and continuing growth.

William P. Wall has been a director since August 31, 2004. Mr. Wall also serves as the Chairman of the Corporate Governance and Nominating Committee and as a member of the Audit Committee.  Mr. Wall joined Abrams Capital Management, LLC, a value-oriented investment firm headquartered in Boston, in February 2006, where he serves as general counsel and a director of several private companies. Prior to joining Abrams Capital, Mr. Wall worked at a hedge fund for two years and Fidelity Investments for seven years.  The Board believes, in addition to his experience as an attorney, Mr. Wall provides financing and investment analysis experience as a result of his career in the investment management industry. Mr. Wall’s leadership, finance and corporate governance experience enable him to advise the Company on its strategic direction, allocation of capital and management development.

Corporate Governance

Board Committee Structure

The Board of Directors has four standing committees: (i) an Audit Committee (in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); (ii) a Compensation Committee; (iii) a Corporate Governance and Nominating Committee; and (iv) a Risk Committee, which was formed in early fiscal 2015.

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

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

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

·                  Reviewing the audit plan and the estimated fees;

·                  Reviewing securities disclosures and earnings press releases;

·                  Managing significant risks and exposures and policies with respect to risk assessment and risk management relating to financial reporting;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

·                  Overseeing regulatory compliance with respect to compensation matters;

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

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

·                  Preparing and issuing compensation evaluations and reports.

The Corporate Governance and Nominating Committee, which the Company sometimes refers to as the Governance Committee, is currently composed of three members, Messrs. Wall (who Chairs the Committee), Corey and Shor, all of whom are independent under the definitions and interpretations of NASDAQ.  Under the Governance Committee Charter, adopted by the Board of Directors and available in the investor relations section of the Company’s website at www.haynesintl.com, the Governance Committee is responsible for overseeing the performance and composition

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

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

·                  Recommending to the Board those director nominees who, in the Committee’s opinion, the full Board should recommend for shareholder approval at the annual meeting or for election;

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

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

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

·                  Recommending the organization and structure of the Board; overseeing and reviewing annually the structure and effectiveness of the Board’s committee system; and

·                  Performing any other duties assigned to it by the Board.

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

·                  Reviewing and approving the Company’s risk governance framework;

·      Setting the tone and developing a culture within the Company regarding risk;

·                  Reviewing the strategic and operating risks identified by management, designating some or all of those risks to be subject to the Committee’s oversight;

·      Reviewing periodic reports from management on the metrics used to measure, monitor and manage risks;

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

·      Approving the appointment of the CEO’s designated Risk Officer.

Meetings of the Board of Directors and Committees

The Board of Directors held thirteen meetings during the fiscal year ended September 30, 2014. No member of the Board of Directors attended fewer than 75% of the aggregate of meetings of the Board of Directors held during his tenure as a Board member, and meetings of any committee of the Board of Directors of which he was a member. 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, to attend Haynes’ annual meetings of stockholders. All of the members of the Board of Directors attended Haynes’ 2014 annual meeting. The following chart shows the number of meetings in fiscal 2014 of each of the standing committees of the Board of Directors that existed during fiscal 2014 at which a quorum was present:

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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 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 2014, the non-management directors met in executive session four times. When meeting in executive session, the presiding person was the Chairman, Mr. Corey.

Independence of the Board of Directors and Committee Members

Except for Mr. Comerford, all of the members of the Board of Directors, including each member of the Audit Committee, the Compensation Committee, the Governance Committee and the Risk 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 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 and stockholders. 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.

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 business, finance and legal and regulatory compliance, 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 of other companies. 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, in addition to race, gender, age, ethnicity and cultural background as elements that contribute to a diverse Board.

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, 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.

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’

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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 Controller, 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.pdf.

Board of Directors’ Role in Risk Oversight

As a part of its oversight function, the Board of Directors monitors how management operates the corporation.  The Risk Committee is designed to act as the primary tool to keep risk as an important part of the Board’s and the various committees’ deliberations throughout the year by working with management to identify and prioritize enterprise risks — the specific financial, operational, business and strategic risks that the Company faces, whether internal or external.  Certain strategic and business risks, such as those relating to the Company’s products, markets and capital investments, are overseen by the entire Board of Directors, with the assistance of the Risk Committee. The Audit Committee oversees 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, 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 executive 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 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.

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

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the Corporate Secretary as directed above. Such communication should be clearly addressed to the non-management directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and greater than 10% stockholders to file reports of ownership and changes in ownership of Haynes securities with the Securities and Exchange Commission. The Company’s employees prepare these reports for the directors and executive officers on the basis of information obtained from them and from the Company’s records. Based on information provided to the Company and representations made by reporting persons, the Company believes that all filing requirements applicable to its executive officers, directors and greater than 10% stockholders were met during fiscal 2014.

Item 11.  Executive Compensation

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 Annual Report on Form 10-K for the fiscal year ended September 30, 2014.

SUBMITTED BY THE COMPENSATION COMMITTEE

Timothy J. McCarthy, Chair

Donald C. Campion

Robert H. Getz

Michael L. Shor

Compensation Discussion and Analysis

2014 Business Summary

In fiscal 2014, the Company:

·                  Generated cash from operations of $26.9 million on revenues of $455.4 million and net income of $3.8 million;

·                  Invested $39.7 million into capital projects including expansions of Arcadia tubular capacity, expansion of the Kokomo flat product capacity and implementation of the Company’s new global ERP IT system; and

·                  Paid $10.9 million in dividends to stockholders, resulting in a cumulative amount of $52.0 million in dividends paid to stockholders over the last 20 consecutive quarters.

Overview

This Compensation Discussion and Analysis describes the key principles and approaches used to determine the compensation in fiscal 2014 for Mark M. Comerford, the Company’s principal executive officer; Daniel W. Maudlin, the Company’s principal financial officer; and Marlin C. Losch III, Scott R. Pinkham and Venkat R. Ishwar, the Company’s other three most highly compensated executive officers in fiscal 2014. Detailed information regarding the compensation of these executive officers, who are referred to as “Named Executive Officers” or “NEOs”, appears in the tables following this Compensation Discussion and Analysis. This Compensation Discussion and Analysis should be read in conjunction with those tables.

This Compensation Discussion and Analysis consists of the following parts:

Responsibility for Executive Compensation Decisions

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Role of Executive Officers in Compensation Decisions

Executive Compensation Philosophy and Principles

Committee Procedures

Setting Named Executive Officer Compensation in Fiscal 2014

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 2014 base salary was established by the employment agreement he renewed in fiscal 2014, as modified by subsequent Compensation Committee actions. Mr. Comerford and Mr. Maudlin, the Company’s Chief Financial Officer, work closely with the Compensation Committee on the development of the financial targets and overall annual bonus levels to be provided to the Named Executive Officers under the Company’s Management Incentive Plan (“MIP”) as those amounts are based on the 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:

·                  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 its financial results. In addition, grants of restricted stock and stock options provide an appropriate incentive to produce stockholder returns through long-term corporate performance.

·                  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 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.

·                  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.

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

In addition to aligning management’s interests with the interests of the stockholders, a key objective of the Company’s compensation plan is mitigating the risk in the compensation package by ensuring that a significant portion of compensation is based on the long-term performance of the Company. This reduces the risk that executives will place too much focus on short-term achievements to the detriment of the long-term sustainability of the Company. The Company

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also structures the short-term incentive compensation so that the accomplishment of short-term goals supports the accomplishment of long-term goals.

At the Company’s 2014 annual meeting of stockholders, the stockholders voted on a non-binding advisory proposal to approve the compensation of the Named Executive Officers. Approximately 92.4% 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 2014 proxy statement, the Compensation Committee did not implement material changes to the executive compensation programs as a result of the stockholders’ advisory vote.

Committee Procedures

The Compensation Committee retains the services of Total Rewards Strategies, an independent compensation consulting firm, to collect survey data and analyze the compensation and related 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 2013 and fiscal 2014. Total Rewards Strategies did not provide any services to the Company other than compensation consulting to the Compensation Committee in fiscal 2013 or fiscal 2014. Total Rewards Strategies’ work for the Company in fiscal 2014 did not raise any conflicts of interest.

The comparator group is comprised of the Company’s direct competitors and a broader group of industrial metals and minerals companies, as well as Indiana- based companies, which the Compensation Committee believes is representative of the labor market from which the Company recruits executive talent. Factors used to select the comparator group companies include industry segment, revenue, profitability, number of employees and market capitalization. The Compensation Committee reviews the comparator group annually. The companies in the comparator group that were used to benchmark fiscal 2014 compensation practices include:

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

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

Setting Named Executive Officer Compensation in Fiscal 2014

Components of Compensation

The chief components of each Named Executive Officer’s compensation in fiscal 2014 were:

·                  base salary;

·                  a performance-based annual incentive award under the MIP;

·                  long-term compensation awards that include a combination of stock option grants and performance- and time-based restricted stock;

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

·                  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 60% of the Named Executive Officers’ total target compensation, including the Chief Executive Officer’s compensation, was allocated to performance-based pay in fiscal 2014.

Fiscal 2014 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 contribution of the executive are also considered. The Committee reviews base salaries for Named Executive Officers annually and may make adjustments based on individual performance, experience, market competitiveness, internal equity and the scope of responsibilities.

The base salaries of the Named Executive Officers were not increased in fiscal 2014. The following table provides annualized base salary information for the Named Executive Officers effective July 1, 2013 and July 1, 2014:

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

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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 contribution 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. 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 2014, the target performance level was established by 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 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 2014, the Compensation Committee established net income as the sole financial goal for MIP payouts.

The table below lists the 2014 MIP incentive awards potentially to be earned at the minimum, target and maximum levels by each Named Executive Officer as a percentage of his base salary:

The above-noted percentage awards applied against the salaries noted for Named Executive Officers on page 11 equals the amounts included in the Compensation Tables on page 16 under the column entitled “Non-Equity Incentive Plan Compensation” for Fiscal Year 2014.

The following table sets forth the targets for net income, as well as actual net income for fiscal 2014:

Based upon fiscal 2014’s net income, no MIP payments were made to the NEOs for fiscal 2014.

When the Securities and Exchange Commission adopts rules implementing the “clawback” requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Compensation Committee will adopt an appropriate policy relating to the Company’s incentive compensation programs.

Long-Term Incentives

Stockholders approved a Restricted Stock Plan in 2009 to provide restricted stock grants for executives. The Board of Directors approved a Stock Option Plan in 2007. Both plans are designed to attract and retain key management, including the Named Executive Officers. The Compensation Committee administers both plans and believes the plans provide an appropriate incentive to produce superior returns to stockholders over the long term by offering participants an opportunity to benefit from stock appreciation through stock ownership.

Competitive benchmarking to the comparator group, the executive’s responsibilities and the individual’s contributions to the Company’s business results determine the level of long-term compensation. In general, the median value of long-term compensation in the comparator group is used to determine the approximate value of long-term incentives. The Black-Scholes method of stock option valuation, which is consistent with the Company’s expensing of equity awards under Financial Accounting Standards Board ASC Topic 718 Compensation- Stock Compensation, was used in fiscal 2014 to determine the value of stock options.

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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 intends to ensure that the Company does not award equity grants in connection with the release, or the withholding, of material non-public information, and that the grant value of all equity awards is equal to the fair market value on the date of grant, which is determined using the closing price on the trading day prior to the grant date. The Compensation Committee will consider whether or not to grant additional equity awards to the management team on an annual basis.

The amount of equity compensation 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;

·                  individual performance;

·                  Company performance;

·                  stockholder return;

·                  internal pay equity;

·                  individual potential; and

·                  retention risk.

The Committee believes that a combination of stock options, performance-based restricted stock and time-based restricted stock aligns the executive’s interests with those of the stockholders and provides an appropriate balance between long-term stock price appreciation, through stock options with a ten-year term, mid-term operating results, through performance-based restricted stock with a three-year performance period, and promotion of retention, through time-based restricted stock. In fiscal 2014, the equity grants to the NEOs consisted of one-third stock options, one-third performance- based restricted stock and one-third time-based restricted stock.

Stock Ownership Guidelines

On September 23, 2013, the Board of Directors approved stock ownership guidelines applicable to executive officers and members of the Board of Directors. The guidelines became effective on January 1, 2014 and establish the goal that, within five (5) years from the effective date, 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 executive officers, 200% of base salary; in the case of members of the Board of Directors, 400% of annual retainer. The calculation of shares owned by an individual includes shares owned directly or indirectly, including those subject to risk of forfeiture (but not forfeited) under the Company’s 2009 Restricted Stock Plan. However, shares subject to stock options are not included in the calculation.

Stock Options

The Company has two stock option plans that authorize the grant of non-qualified stock options to certain key employees and non-employee directors for the purchase of a maximum of 1,500,000 shares of common stock. The first option plan was adopted in 2004 and provides for the grant of options to purchase up to 1,000,000 shares of common stock. In January 2007, the Board of Directors adopted a new option plan that provides for options to purchase up to 500,000

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shares of common stock. All options granted under the plans vest in three equal annual installments on the first, second and third anniversaries of the grant date.

Under Internal Revenue Code Section 162(m), subject to an exception for qualifying performance-based compensation, the Company cannot deduct compensation of over $1.0 million in annual compensation paid to certain executive officers. Options granted pursuant to the Company’s option plans are intended to qualify as qualifying performance-based compensation exempt from this deduction limitation. As a result, it is not anticipated that a grant of options under these plans will cause the deduction limit to be exceeded for any executive.

The Compensation Committee granted stock options to the management team, including the Named Executive Officers, in November 2011, November 2012 and November 2013. The Compensation Committee believes that the stock 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 to be granted to the Named Executive Officers, the Compensation Committee established the value of the shares underlying the options at $23.91 for the November 2011 grant, $13.92 for the November 2012 grant and $13.94 for the November 2013 grant pursuant to Financial Accounting Standards Board ASC Topic 718 using the Black-Sholes pricing model. The Compensation Committee then set a total pool of options for grant to all executive officers of approximately $0.6 million for each of the November 2011, November 2012 and November 2013 grants.

Restricted Stock

On February 23, 2009, the Company adopted a restricted stock plan that reserved 400,000 shares of common stock for issuance. Grants of restricted stock vest in accordance with the terms and conditions established by the Compensation Committee. The Compensation Committee may set restrictions on certain grants based on the achievement of specific performance goals, and vesting of grants to participants may also be time-based.

Restricted stock grants are subject to forfeiture if employment or service terminates prior to the end of the vesting period or if the performance goal is not met, if applicable. The Company will assess, on an ongoing basis, the probability of whether the 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 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.

2012 Fiscal Year Grants

On November 25, 2011, executives, including the Named Executive Officers, were granted restricted stock. Two types of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the grant of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the period of October 1, 2011 through September 30, 2014, which dictated whether those restricted shares vested or were forfeited. The outstanding restricted shares that were subject to time-based vesting vested on the third anniversary of the date of grant. The number of shares and value of restricted stock as of September 30, 2014 is listed in the Outstanding Equity Awards at Fiscal Year End table on page 18. Participants must be employees at the end of the performance period to receive a payout, except in the event of death or disability. In November 2014, a total of 5,900 shares of restricted stock granted to NEOs vested based upon passage of time while a total of 5,900 shares that were granted on November 25, 2011 were forfeited based upon the non-achievement of the three-year net income goal for the period of October 1, 2011 through September 30, 2014.  The net income achieved for that period was $75.5 million with net income goal for that period being $165.0 million.

2013 Fiscal Year Grants

On November 24, 2012, executives, including the Named Executive Officers, were granted restricted stock. Two types of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the grant of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the period of October 1, 2012 through September 30, 2015, which will dictate whether those restricted shares will vest or be forfeited. The restricted shares that are subject to time-based vesting will vest on the third anniversary of the date of grant. The number of shares and value of restricted stock as of September 30, 2014 is listed in the Outstanding Equity Awards at Fiscal Year End table on page 18.  Participants must be employees at the end of the performance period to receive a payout, except in the event of death or disability.

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2014 Fiscal Year Grants

On November 26, 2013, executives, including the Named Executive Officers, were granted restricted stock. Two types of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the grant of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the period of October 1, 2013 through September 30, 2016, which will dictate whether those restricted shares will vest or be forfeited. The restricted shares that are subject to time-based vesting will vest on the third anniversary of the date of grant. The number of shares and value of restricted stock as of the grant date is listed in the Grants of Plan-Based Awards table on page 17.  Participants must be employees at the end of the performance period to receive a payout, except in the event of death or disability.

The fiscal 2014 expense related to restricted stock grants to Named Executive Officers is listed in the Summary Compensation Table on page 16.

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 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 provides limited perquisites to certain executives. These arrangements are primarily intended to increase the efficiency of an executive by allowing him or her to focus on business issues and to provide business and community development opportunities. In fiscal 2014, these perquisites consisted of taxable automobile usage and country club memberships for Messrs. Comerford, Losch and Ishwar. In fiscal 2014, no single perquisite exceeded $10,000 per person.

Severance; Change in Control

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 compensation. The Company recognizes that Haynes, as a publicly-traded company, may become the target of a proposal which could result in a change in control, and that such possibility and the uncertainty and questions which such a proposal may raise among management could cause the Company’s Named Executive Officers to leave or could distract them in the performance of their duties, to the Company’s detriment and the detriment of the Company’s stockholders. The Company has entered into these agreements to protect the Named Executive Officers against the loss of their positions and to reinforce and encourage their continued attention to their assigned duties without distraction in the event of a proposed change in control transaction. The Company believes that these objectives are in the best interests of the Company and its stockholders. The Company also believes that it is in the best interests of the Company and its stockholders to offer such agreements to the Named Executive Officers insofar as the Company competes for executive talent in a highly competitive market in which companies routinely offer similar severance and change in control benefits to senior executives.

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, the Company entered into an Employment Agreement with Mr. Comerford on September 8, 2008, which was amended August 6, 2009. The agreement’s initial term began at the close of business on September 30, 2008 and ended on September 30, 2012 but is subject to automatic extension for one year periods thereafter assuming mutual consent of the Company and Mr. Comerford. The agreement was extended as of

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October 1, 2014. Pursuant to the agreement as modified by the Compensation Committee, Mr. Comerford’s base salary for fiscal 2014 was $518,000 per year (84% of the median Comparator Group CEO salary), with bonus targets to be determined by the Compensation Committee annually prior to or at the commencement of the applicable fiscal year.

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 CEO, CFO and the other Named Executive Officers.

Summary Compensation Table

The narrative and footnotes below describe the total compensation paid for fiscal 2012, 2013 and 2014 to the Named Executive Officers, each of whom was serving as an executive officer on September 30, 2014, the last day of the Company’s fiscal year. 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 2012, 2013 and 2014, including any amounts invested by the Named Executive Officers in the Company’s 401(k) plan.

Bonus—This column represents all non-MIP cash bonuses earned by the Named Executive Officers in fiscal 2012, 2013 and 2014.

Restricted Stock—This column represents the fair value of the restricted stock grant, which equals the closing price of the common stock on the trading day prior to the grant date, 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 2012, 2013 and 2014. Under FASB ASC Topic 718, compensation expense is calculated using the Black-Sholes option pricing method and recognized over the expected life of the stock option.

Non-Equity Incentive Plan Compensation—This column represents cash bonuses earned in fiscal 2012, 2013 and 2014 by the Named Executive Officers under the 2012, 2013 and 2014 MIP.

Change in Pension Value and Nonqualified Deferred Compensation Earnings—This column represents the actuarial increase during fiscal 2012 and 2014 in the pension value for the Named Executive Officers under the Haynes International, Inc. Pension Plan.   During fiscal 2013, the actuarial present value of the pension benefit for each NEO to which it is applicable declined.  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 2012, 2013 and 2014 not reported in previous columns, such as the Company’s matching contributions to 401(k) plans, payment of insurance premiums and costs of providing certain perquisites and benefits.

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(2)                                         The options were valued pursuant to FASB ASC Topic 718 using the Black-Scholes option pricing model.

(3)                                         Amounts earned in fiscal 2012 under the 2012 MIP were paid in the first quarter of fiscal 2013. No amounts were earned in fiscal 2013 or fiscal 2014 under the 2013 or 2014 MIP.  Please see the discussion of the MIP under “Compensation Discussion and Analysis”.

(4)                                         During fiscal 2013, the actuarial present value of the pension benefit for each NEO declined in the following amounts: $7,799 for Mr. Maudlin; $38,433 for Mr. Losch; $21,648 for Mr. Pinkham; and $25,077 for Mr. Ishwar.

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

Grants of Plan-Based Awards in Fiscal 2014

During fiscal 2014, the Named Executive Officers received three types of plan-based awards:

Management Incentive Plan—On November 26, 2013, the Named Executive Officers were awarded grants under the Company’s 2014 MIP. Under the plan, certain employees of the Company, including the Named Executive Officers, were eligible for cash awards if the Company met certain net income targets established by the Compensation Committee for fiscal 2014. The amount of the cash awards could range between 40% and 120% of base salary for Mr. Comerford, 25% and 75% of base salary for Messrs. Ishwar, Pinkham and Losch; and 30% and 90% for Mr. Maudlin, depending on the level of net income earned by the Company compared to the targeted amount.

Stock Options—Non-qualified options were granted on November 26, 2013 under the Haynes International, Inc. 2007 Stock Option Plan. Each option vests in three equal installments on the first, second and third anniversaries of the grant date, remains exercisable for ten years and has an exercise price equal to the closing stock price on the day prior to the date of grant.

Restricted Stock—On November 26, 2013, executives, including the Named Executive Officers, were granted restricted stock under the Haynes International, Inc. 2009 Restricted Stock Plan. Two types of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the grant of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the period of October 1, 2013 through September 30, 2016 which will determine whether these restricted shares will vest or be forfeited on September 30, 2016. The restricted shares which are subject to time-based vesting will vest on the third anniversary of the date of grant.

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Grants of Plan-Based Awards Table

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

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

Outstanding Equity Awards at Fiscal Year-End

The table below provides information on the Named Executive Officers’ outstanding equity awards as of September 30, 2014. The equity awards consist of stock options and shares of restricted stock. The table includes the following:

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

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

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

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

Number of Unearned Shares That Have Not Vested—All shares of restricted stock granted in fiscal 2014 are unvested. Two types of restricted shares were granted: those with performance-based vesting and those with time-based vesting. For the grant of performance-based restricted shares, the Compensation Committee established a three-year net income performance goal for the period of October 1, 2013 through September 30, 2016 which will determine whether these restricted shares will vest or be forfeited. The restricted shares which are subject to time-based vesting will vest on the third anniversary of the date of grant.

Market Value of Unearned Shares That Have Not Vested—The market value of unvested shares of restricted stock is based upon the September 30, 2014 closing price of the Company’s common stock of $45.99 and is calculated in accordance with FASB ASC Topic 718.

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