STOCKHOLDERS’ EQUITY

During the

nine

months ended

May 31, 2018,

the Company’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of the Company’s common stock:

Declaration Date	Amount	Record Date	Payable Date
November 20, 2017	$0.10	December 8, 2017	December 21, 2017
January 24, 2018	$0.10	February 8, 2018	February 21, 2018
April 25, 2018	$0.10	May 9, 2018	May 23, 2018

During the

nine

months ended

May 31, 2018,

the Company repurchased and retired

shares of its common stock.

During the

nine

months ended

May 31, 2018,

stock options to purchase an aggregate of

4,410

shares of common stock were exercised at a weighted average exercise price of

$11.59

per share.

The Company granted stock options under the Northern Technologies International Corporation Amended and Restated

2007

Stock Incentive Plan (

2007

Plan) to purchase an aggregate of

47,252

shares of its common stock to various employees and directors during the

nine

months ended

May 31, 2018.

The weighted average per share exercise price of the stock options is

$18.35,

which was equal to the fair market value of the Company’s common stock on the date of grant.

The Company issued

891

and

3,029

shares of common stock on

September 1, 2017

and

2016,

respectively, under the Northern Technologies International Corporation Employee Stock Purchase Plan (ESPP). The Company issued

985

and

1098

shares of common stock on

March 1, 2018

and

2017,

respectively, under the ESPP.

The Company held its

2018

Annual Meeting of Stockholders (

2018

Annual Meeting) on

January 12, 2018.

At the

2018

Annual Meeting, a proposal to approve an amendment to the Company’s Restated Certificate of Incorporation to increase the Company’s authorized shares of common stock from

10,000,000

15,000,000

(Share Increase Amendment) was approved by the Company’s stockholders by the required vote. The Share Increase Amendment was filed with the Office of the Secretary of State of the State of Delaware on

January 16, 2018

and it became effective the same day. In determining that the Share Increase Amendment was approved by the required vote, votes cast by brokers, banks or other nominees without instruction from the beneficial owners of certain of our outstanding shares were counted in favor of the proposal in accordance with the rules of the New York Stock Exchange that govern how brokers

may

cast such votes. Because a disclosure in the definitive proxy statement for the

2018

Annual Meeting, which was filed on Schedule

14A

with the Securities and Exchange Commission (SEC) on

November 27, 2017 (

2018

Proxy Statement), anticipated that brokers would

not

have discretion to vote for the proposal to approve the Share Increase Amendment, a question has been raised as to the validity of the vote taken on the proposal to approve the Share Increase Amendment. The Company believes that the Share Increase Amendment was properly approved and is effective. However, because the description of the authority of brokers to vote on proposals without instruction in the

2018

Proxy Statement

may

create some uncertainty as to the effect of the vote obtained at the

2018

Annual Meeting and out of an abundance of caution, the Company intends to ask its stockholders at either a special meeting or the next annual meeting of the Company’s stockholders to ratify the filing and effectiveness of the Share Increase Amendment pursuant to Delaware law in order to eliminate any uncertainty related to the effectiveness of the Share Increase Amendment. The Company has

not

issued, or reserved for issuance, and will

not

issue, or reserve for issuance, any of the additional

5,000,000

authorized shares as part of the Share Increase Amendment unless the vote at the special or annual meeting of the Company’s stockholders is in favor of the ratification of the Share Increase Amendment.

During the

nine

months ended

May 31, 2017,

the Company repurchased and retired

14,525

shares of its common stock at a price of

$13.51

per share.

During the

nine

months ended

May 31, 2017,

stock options to purchase an aggregate of

4,000

shares of common stock were exercised at a weighted average exercise price of

$10.25

per share.

During the

nine

months ended

May 31, 2017,

the Company granted stock options under the

2007

Plan to purchase an aggregate of

56,677

shares of its common stock to various employees and directors. The weighted average per share exercise price of the stock options was

$13.40,

which was equal to the fair market value of the Company’s common stock on the date of grant.