Neenah
Annual Report 2017

Plain-text annual report

F I N A N C I A L HIGHLIGHTS Continuing Operations Year End December 31, (Dollars in millions, except share data) 2015 2016 2017 Net Sales (In millions of U.S. dollars) Consolidated Statement of Operations Data Net Sales Adjusted EBIT % ROS $979.9 $941.5 $887.7 $839.7 $887.7 $941.5 $107.9 $92.6 $1 $121.9 $103.0 07 9 $121 9 . . 11.0% 12.9% 12.2% $123.6 $141.9 12.2% 12.9% 10.5% $157.8 Earnings per Diluted Common Share Adjusted Earnings from Continuing Operations $3.70 $3.21 $4.54 $3.70 $4.32 $4.54 Weighted-Average Shares Outstanding (in thousands) 17,087 17,012 16,872 17,012 17,052 17,087 Consolidated Balance Sheet Data Total Assets Total Stockholders’ Equity Total Debt Cash and Cash Equivalents Debt to Adjusted EBITDA Debt to Capital Other Financial Data Net Cash Flow Provided by (used for): Operating Activities Capital Expenditures Free Cash Flow Stock Price Year-End Cash Dividends Paid GAAP Reconciliation $751.4 $724.5 $765.6 $751.4 $904.4 $765.6 $311.6 $288.7 $338.3 $311.6 $399.9 $338.3 $228.7 $229.4 $229.4 $220.9 $220.9 $255.5 $4.2 $72.6 $3.1 $4.2 $4.5 $3.1 1.6x 1.8x 44% 42% 1.4x 1.6x 42% 40% 1.8x 1.4x 40% 39% $94.5 $111.2 $115.8 $111.2 $115.8 $100.0 $(27.9) $(48.1) $(48.1) $(68.5) $(68.5) $(42.7) $63.1 $47.3 $57.3 $60.27 $62.43 $62.43 $85.20 $85.20 $90.65 $ 1. 02 $1.20 $1.20 $1.32 $1.32 $1.48 A reconciliation of adjusted income measures to comparable GAAP measures is shown below: Year End December 31, (Dollars in millions, except share data) EBIT (Operating Income) Acquisition/Integration/Restructuring Costs Insurance Settlement Pension & SERP Settlement Charge Adjusted EBIT Depreciation & Amortization Amortization Equity-Based Compensation Adjusted EBITDA 2015 2016 2017 $101.4 $114.1 $104.3 6.5 – – 7.0 – 1.3 (3.2) 0.8 0.6 107.9 121.9 103.0 27.5 6.5 30.1 32.1 5.8 6.4 $141.9 $157.8 $141.5 Diluted Earnings per Share $3.53 $4.26 $4.68 Acquisition/Integration/Restructuring Costs Prior Period R&D Tax Credits Tax Adjustments Insurance Settlement Pension & SERP Settlement Charge 0.24 (0.07) – – – 0.25 0.06 – – – – (0.32) (0.12) 0.03 0.02 Diluted Adjusted Earnings per Share $3.70 $4.54 $4.32 $941.5 $23.0 452.1 $ $452.1 $887.7 $ 15.8 $442.7 $442.7 $4 . 29 2 $429.2 $4 . $ 66 4 466.4 $979.9 $22.5 $ 455.3 $ 502.1 2015 2016 2017  Technical Products  Fine Paper & Packaging  Other Adjusted EBIT (In millions of U.S. dollars) $121.9 $107.9 $103.0 12% 13% % 1 % 2.9 %11 2015 2016 2017  Adjusted EBIT % of Sales Adjusted Earnings Per Share $4.54 $4.32 $ 3.70 2015 2016 2017 Neenah, Inc. 2017 Annual Report T O O U R SHAREHOLDERS In 2017, we continued to reshape Neenah to 2012 was a highly successful year for Neenah. accelerate our growth trajectory and global reach. At the front and center of our efforts was the We expanded our size and capabilities in Technical disciplined execution of our strategy, motivated Products and advanced the transformation of our by a clear and consistent vision: To create value for Fine Paper & Packaging business. Importantly, as we our customers and shareholders by improving the continue to evolve, we also delivered another year of image and performance of everything we touch. attractive shareholder returns. Our continuing efforts to implement that vision led to substantial growth in 2012, both top-line and Among our 2017 performance highlights, we bottom-line, and allowed us to deliver returns to our • grew net sales to a record $980 million, led by 8 shareholders of 30%, more than twice that of the percent growth in Technical Products and 1 percent in broad markets. Fine Paper & Packaging As you will see in the segment overviews that follow, including new initiatives in specialized market niches, Neenah continues to move ahead as a true 21st which we achieved despite challenging economic century company that brings together manufacturing, headwinds in Europe throughout most of the year. technology, intellectual property, design, as well as % Change 2012 vs 2011 research and development – a company that has a Operating passion for enabling our customers’ success and for 36% over 2011 being successful in our own right. income increased 6% TECHNICAL PRODUCTS 4% 5% after adjusting for acquisition integration In Technical Products, our largest and fastest-growing Net Sales segment, we delivered another strong year of growth in time costs. Our Adj. EBIT Adj. EPS and other one- • successfully started and began to ramp up our OUR STRATEGY IS BUILT ON A PLATFORM OF higher sales and disciplined approach to managing 2017, with net sales now exceeding a half-billion dollars, THREE IMPERATIVES: transportation filtration investment in Appleton, overhead and other costs allowed us to leverage driven by 6 percent organic growth. We see a great deal Wisconsin; acquired Coldenhove, a Technical Products Focus on profitable, specialty niche markets (cid:127) business based in the Netherlands; and purchased where we can establish market Neenah’s infrastructure, and helped boost operating of momentum in Technical Products, as we continue margins to 9.9% versus 8.5% in 2011. to gain market share, expand in scope and scale, and laminating assets in the U.S. to further growth in positions based on our core strengths. become more global. During the year, we also actively managed our premium packaging (cid:127) Increase our size, growth rate and portfolio • maintained strong free cash flow and a healthy diversification in both Fine Paper and Technical balance sheet, giving us financial flexibility to make Products through organic means and additional strategic investments that can add value complementary acquisitions. • delivered another year of double-digit Return on (cid:127) Deliver consistent, attractive returns to our Invested Capital (ROIC), and • provided shareholder returns that outperformed shareholders through disciplined management. the Russell 2000 for the ninth consecutive year and included an eighth consecutive double-digit dividend is evidence of our progress in each of these areas. increase. DELIVERING PROFITABLE GROWTH AND CONSISTENCY IN STRATEGY AND EXECUTION SHAREHOLDER VALUE capital structure, redeeming $68 million of bonds % of Change Net Sales ($ Million) 2016 vs. 2015 Adj. EBIT Margins 23% $466 entered into a new lending facility and improved the $429 23% $502 terms and extended the maturity of our revolver— 13% 14% 11% 450.0 18% 400.0 350.0 13% 13% 300.0 250.0 8% 6% 200.0 150.0 3% These factors combined to drive a 50% increase in -2% adjusted net income, which reached $46 million, or 2015 2016 2017 Net Sales Adj. EBIT Adj. EPS $2.78 per share. This was our highest level ever. Within Technical Products, Filtration is our largest Increased income levels along with our continued category. Our transportation filtration products include air, fuel, oil, and cabin filters for automobiles, trucks and heavy-duty equipment. We also see significant Invested Capital (ROIC) of over 11% for 2012, up 25% 20% 15% 10% 5% Sales increased 16% from 2011 and exceeded Simply put, in 2017, we continued executing our opportunity in other filtration markets, including water, sharply from 9% in 2011. This remains a key metric $800 million. This was mainly due to our successful strategy to enhance our position as a global leader in industrial and beverage, which contributed to an overall guiding our investment decisions. acquisition of the Wausau premium paper brands high value core categories. The considerable progress 6 percent increase in filtration net sales year over year. we’ve made in our journey to become a faster-growing specialty materials company is underscored by our recent corporate name change from Neenah Paper, Inc. to Neenah, Inc. execution enabled us to deliver on our commitment We added capacity to serve the growing transportation to enhance shareholder value. Our total shareholder filtration market as we began to ramp up our operation return for the past year was 30%, anchored by a Neenah Paper, Inc. 2016 Annual Report Neenah, Inc. 2017 Annual Report 1.5 0.5 1 0 Annual Dividends $/Share $1.32 $1.20 $1.02 $0.70 $0.44 $0.48 2011 2012 2013 2014 2015 2016 T O O U R SHAREHOLDERS 2012 was a highly successful year for Neenah. in Appleton, Wisconsin. We now have what we believe including new initiatives in specialized market niches, coatings; and world-class manufacturing capabilities, At the front and center of our efforts was the to be the best and most advanced transportation which we achieved despite challenging economic and we further add value to customer supply chains by disciplined execution of our strategy, motivated filtration assets in the world, with manufacturing plants headwinds in Europe throughout most of the year. offering tailored product solutions, design expertise and by a clear and consistent vision: To create value for and research and development capabilities in both rapid prototyping. % Change 2012 vs 2011 our customers and shareholders by improving the Germany and the U.S. While start-up costs for a large image and performance of everything we touch. expansion like Appleton are significant, and in 2017 Our continuing efforts to implement that vision led were higher than originally planned, we are confident to substantial growth in 2012, both top-line and that this organic investment will deliver the future bottom-line, and allowed us to deliver returns to our profitable growth and the attractive returns we expect. shareholders of 30%, more than twice that of the broad markets. Our global Technical Products portfolio also includes Performance Materials, such as backings for tapes and OUR STRATEGY IS BUILT ON A PLATFORM OF abrasives; media for digital image transfer on clothing, THREE IMPERATIVES: sportswear and other materials; labels; protective Focus on profitable, specialty niche markets (cid:127) covers; and other defensible specialty materials. Sales of Performance Materials grew by 9 percent in 2017, where we can establish market Net Sales ($ Million) Adj. EBIT Margins 450.0 400.0 4% 350.0 300.0 250.0 Net Sales 200.0 150.0 $443 6% 16% $452 5% 16% Adj. EBIT Adj. EPS Operating income increased 36% over 2011 after adjusting for acquisition $455 integration 15% and other one- time costs. Our 25.0% 20.0% 15.0% 10.0% 5.0% 2015 2016 2017 higher sales and disciplined approach to managing overhead and other costs allowed us to leverage In 2017, we continued to transform our Fine Paper & Neenah’s infrastructure, and helped boost operating Packaging business through our focus on growing in margins to 9.9% versus 8.5% in 2011. premium packaging. In this category, we delivered a 17 fueled by sales and share gains for backings outside positions based on our core strengths. During the year, we also actively managed our percent sales gain, with growth in our targeted verticals the U.S., as well as increased demand for our labels (cid:127) Increase our size, growth rate and portfolio capital structure, redeeming $68 million of bonds of beauty, alcohol and high-end retail. We also extended that can withstand harsh environments. diversification in both Fine Paper and Technical our premium packaging capabilities by acquiring a Products through organic means and In 2017, we expanded our digital image transfer complementary acquisitions. platform and global customer base with the acquisition (cid:127) Deliver consistent, attractive returns to our of Coldenhove, which has annual sales of $45 shareholders through disciplined million. The acquisition significantly enhances our management. ability to serve the fast-growing, $200 million digital transfer market, providing us with capabilities in dye is evidence of our progress in each of these areas. sublimation media that complement our existing capabilities in heat transfer media. It also provides DELIVERING PROFITABLE GROWTH AND SHAREHOLDER VALUE synergies in sales and distribution to support our expansion globally and accelerate growth. Sales increased 16% from 2011 and exceeded $800 million. This was mainly due to our successful FINE PAPER & PACKAGING acquisition of the Wausau premium paper brands entered into a new lending facility and improved the laminating operation in Great Barrington, Massachusetts terms and extended the maturity of our revolver— to serve the paper-based gift card market. We see an opportunity to accelerate our growth in this market as many companies look for an environmentally preferable alternative to plastic cards. These factors combined to drive a 50% increase in adjusted net income, which reached $46 million, or Additionally, we had another record year of sales in $2.78 per share. This was our highest level ever. the retail channel, where we launched new products, Increased income levels along with our continued expanded distribution, and grew revenues at retailers such as Amazon, Wal-Mart and Target. Growth in Invested Capital (ROIC) of over 11% for 2012, up premium packaging and retail helped offset ongoing sharply from 9% in 2011. This remains a key metric secular pressures in the commercial print category. guiding our investment decisions. ACTING TO ADDRESS HEADWINDS In a niche market for premium textured and colored execution enabled us to deliver on our commitment paper valued at approximately $650 million, we are to enhance shareholder value. Our total shareholder In addition to start-up costs for our Appleton filtration the clear leader. We differentiate ourselves from the return for the past year was 30%, anchored by a asset, 2017 operating income was pressured in the competition by bringing together top brands; a broad second half by sustained and significant increases in array of best-in-class products, specialty textures and Neenah Paper, Inc. 2016 Annual Report costs, notably pulp and freight, both of which continued Neenah, Inc. 2017 Annual Report T O O U R SHAREHOLDERS 2012 was a highly successful year for Neenah. to rise in 2018. Changes in input costs are part of doing including new initiatives in specialized market niches, Our capital deployment strategies include returning At the front and center of our efforts was the business, and we are taking the necessary actions to which we achieved despite challenging economic a meaningful part of our cash flow to shareholders. disciplined execution of our strategy, motivated address them through pricing and cost management. headwinds in Europe throughout most of the year. We are particularly proud of the 20 percent compound by a clear and consistent vision: To create value for While recent increases in costs have been unusually annual growth rate of our cash returns to shareholders % Change 2012 vs 2011 Operating our customers and shareholders by improving the persistent, our businesses have proven to be successful over the past five-years. image and performance of everything we touch. over time in overcoming them. Our continuing efforts to implement that vision led WINNING: A RIGHT TO BE EARNED income increased 36% over 2011 after adjusting for acquisition to substantial growth in 2012, both top-line and To address increases in freight costs, we are finding bottom-line, and allowed us to deliver returns to our ways to become more efficient in how we go to shareholders of 30%, more than twice that of the market. Because these changes are structural, they broad markets. take some time to fully implement. As always, we have an ongoing focus on increasing efficiencies OUR STRATEGY IS BUILT ON A PLATFORM OF throughout our value chain to deliver the savings and THREE IMPERATIVES: improvements required to maintain our attractive (cid:127) profit margins. Focus on profitable, specialty niche markets where we can establish market positions based on our core strengths. A STRONG FIVE-YEAR TRACK RECORD (cid:127) Increase our size, growth rate and portfolio 6% In addition to consistency in our strategy and integration 4% 5% execution, we are consistent in our mindset that and other one- Adj. EPS Net Sales Adj. EBIT winning must be earned each and every day. time costs. Our For Neenah, this means staying true to our vision higher sales and disciplined approach to managing of creating value by improving the image and overhead and other costs allowed us to leverage performance of everything we touch. It also means Neenah’s infrastructure, and helped boost operating supporting the sustainability of our business and margins to 9.9% versus 8.5% in 2011. communities through efforts to reduce waste and water During the year, we also actively managed our consumption, use of renewable energy sources, and capital structure, redeeming $68 million of bonds initiatives to offer responsibly-sourced paper as well as The success we have had to date in executing our diversification in both Fine Paper and Technical paper made with recycled content. strategy to reshape Neenah has resulted in a strong Products through organic means and track record of profitable growth. Over the last five complementary acquisitions. years, we have achieved a net sales compound annual (cid:127) Deliver consistent, attractive returns to our growth rate of 6 percent and an earnings per share shareholders through disciplined compound annual growth rate of 10 percent. management. During this same period, we’ve maintained a double- is evidence of our progress in each of these areas. digit ROIC, supported by an unwavering focus on asset efficiency, footprint optimization and value- DELIVERING PROFITABLE GROWTH AND SHAREHOLDER VALUE adding capital deployment. This includes a disciplined approach to organic capital spending, which we look Sales increased 16% from 2011 and exceeded to maintain at 3 to 5 percent of net sales, with the $800 million. This was mainly due to our successful majority of spending for projects that deliver attractive acquisition of the Wausau premium paper brands financial returns. entered into a new lending facility and improved the terms and extended the maturity of our revolver— Equally important, earning the right to win also means upholding our financial principles of consistent, profitable growth; high returns on capital; a flexible and prudent capital structure; and attractive These factors combined to drive a 50% increase in shareholder returns. adjusted net income, which reached $46 million, or $2.78 per share. This was our highest level ever. Increased income levels along with our continued Invested Capital (ROIC) of over 11% for 2012, up sharply from 9% in 2011. This remains a key metric guiding our investment decisions. execution enabled us to deliver on our commitment to enhance shareholder value. Our total shareholder return for the past year was 30%, anchored by a Neenah Paper, Inc. 2016 Annual Report Neenah, Inc. 2017 Annual Report T O O U R SHAREHOLDERS 2012 was a highly successful year for Neenah. A NOTE OF GRATITUDE including new initiatives in specialized market niches, At the front and center of our efforts was the which we achieved despite challenging economic disciplined execution of our strategy, motivated I want to express my gratitude to our employees for headwinds in Europe throughout most of the year. % Change 2012 vs 2011 Operating by a clear and consistent vision: To create value for their leadership and teamwork in reshaping Neenah our customers and shareholders by improving the and enabling us to serve as a meaningful, positive image and performance of everything we touch. presence in the communities where we operate. Our continuing efforts to implement that vision led Our employees are outstanding stewards of our to substantial growth in 2012, both top-line and company’s culture, in which we challenge ourselves bottom-line, and allowed us to deliver returns to our and each other to innovate and perform at our best, shareholders of 30%, more than twice that of the while supporting one another and continuously 6% 5% 4% income increased 36% over 2011 after adjusting for acquisition integration and other one- time costs. Our broad markets. working to improve safety. Net Sales Adj. EBIT Adj. EPS OUR STRATEGY IS BUILT ON A PLATFORM OF I’m also grateful to our Board of Directors for the THREE IMPERATIVES: guidance they provide in our strategy to enhance our (cid:127) leadership as a global specialty materials company. Focus on profitable, specialty niche markets where we can establish market higher sales and disciplined approach to managing overhead and other costs allowed us to leverage Neenah’s infrastructure, and helped boost operating margins to 9.9% versus 8.5% in 2011. And, of course, I want to thank you, our shareholders, positions based on our core strengths. During the year, we also actively managed our for your investment and support, which we seek to (cid:127) Increase our size, growth rate and portfolio reward by building on our track record of attractive diversification in both Fine Paper and Technical shareholder returns. Products through organic means and complementary acquisitions. Sincerely, (cid:127) Deliver consistent, attractive returns to our shareholders through disciplined management. is evidence of our progress in each of these areas. John P. O’Donnell DELIVERING PROFITABLE GROWTH AND President and Chief Executive Officer SHAREHOLDER VALUE capital structure, redeeming $68 million of bonds entered into a new lending facility and improved the terms and extended the maturity of our revolver— These factors combined to drive a 50% increase in adjusted net income, which reached $46 million, or $2.78 per share. This was our highest level ever. Increased income levels along with our continued Sales increased 16% from 2011 and exceeded sharply from 9% in 2011. This remains a key metric $800 million. This was mainly due to our successful guiding our investment decisions. acquisition of the Wausau premium paper brands Invested Capital (ROIC) of over 11% for 2012, up execution enabled us to deliver on our commitment to enhance shareholder value. Our total shareholder return for the past year was 30%, anchored by a Neenah Paper, Inc. 2016 Annual Report Neenah, Inc. 2017 Annual Report TECHNICAL PRODUCTS TECHNICAL PRODUCTS TECHNICAL PRODUCTS TECHNICAL PRODUCTS Neenah is a leading producer of Technical Products, using various substrates to produce specialized materials Neenah is a leading producer of Technical Products, that employ saturation, coating and other function- using various substrates to produce specialized materials enhancing processes that employ saturation, coating and other function- Neenah is a leading producer of Technical Products, enhancing processes using various substrates to produce specialized materials Neenah is a leading producer of Technical Products, using various substrates to produce specialized materials that employ saturation, coating and other function- and abrasive backings, labels and other enhancing processes that employ saturation, coating and other function- enhancing processes and abrasive backings, labels and other industrial applications, The Technical Products group serves customers in transportation, medical packaging, image transfer papers and transportation and water filtration, industrial applications, transportation, industrial applications, many others. medical packaging, digital transfer and many others. medical packaging, digital transfer papers, publishing, and many others. industrial applications, transportation, The Technical Products group serves customers in more more than 70 countries through manufacturing facilities medical packaging, digital transfer papers, publishing, and industrial applications, transportation, The Technical Products group serves customers in than 80 countries through manufacturing facilities in the U.S., in the U.S., Germany, and the supported by R&D efforts many others. medical packaging, image transfer papers and more than 80 countries through manufacturing facilities Germany, the Netherlands, and the U.K., supported by R&D focused on developing new processes and products many others. in the U.S., Germany, and the U.K., supported by R&D efforts in the U.S., Germany, and the supported by R&D efforts The Technical Products group serves customers in efforts focused on developing new products that will deliver that will meet customers’ needs and drive our growth. focused on developing new processes and products that will focused on developing new processes and products more than 80 countries through manufacturing facilities The Technical Products group serves customers in the performance our customers require and drive our growth. meet customers’ needs and drive our growth. that will meet customers’ needs and drive our growth. in the U.S., Germany, and the supported by R&D efforts more than 70 countries through manufacturing facilities focused on developing new processes and products in the U.S., Germany, and the supported by R&D efforts that will meet customers’ needs and drive our growth. focused on developing new processes and products that will meet customers’ needs and drive our growth. and abrasive backings, labels and other and abrasive backings, labels and other OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS: OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS: sepat dna sevisarba sa hcus snoitacilppa lairtsudni rof stcudorp ni ecnamrofrep roirepus gnilbane • providing essential filtration capabilities for transportation, water and other uses (cid:127) OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS: (cid:127) (cid:127) OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS: (cid:127) meeting specialized needs for strength, durability resistance to water and contamination in products (cid:127) sepat dna sevisarba sa hcus snoitacilppa lairtsudni rof stcudorp ni ecnamrofrep roirepus gnilbane OUR PRODUCTS DELIVER HIGH-PERFORMANCE SOLUTIONS: as diverse as medical packaging, labels, and outdoor advertising (cid:127) • enabling superior performance in products for industrial applications, such (cid:127) meeting specialized needs for strength, durability resistance to water and contamination in products (cid:127) as abrasives, tapes and digital image transfer sepat dna sevisarba sa hcus snoitacilppa lairtsudni rof stcudorp ni ecnamrofrep roirepus gnilbane (cid:127) as diverse as medical packaging, labels, and outdoor advertising sepat dna sevisarba sa hcus snoitacilppa lairtsudni rof stcudorp ni ecnamrofrep roirepus gnilbane (cid:127) (cid:127) meeting specialized needs for strength, durability resistance to water and contamination in products (cid:127) meeting specialized needs for strength, durability resistance to water and contamination in products and contamination in products as diverse as medical packaging, labels and covering materials as diverse as medical packaging, labels, and outdoor advertising as diverse as medical packaging, labels, and outdoor advertising • meeting specialized needs for strength, durability resistance to water FILTRATION FILTRATION FILTRATION FILTRATION High-performance filtration media for transportation, industrial water and other markets FILTRATION BACKINGS Saturated and coated papers used for backing of specialty abrasives and tapes to enhance their performance, and BACKINGS Saturated and coated papers used for backing of specialty abrasives and tapes to enhance their performance, and BACKINGS PERFORMANCE MATERIALS Saturated and coated papers used for backing of specialty abrasives and tapes to enhance their performance, and BACKINGS Saturated and coated papers used for backing of specialty abrasives, tapes, and products for a variety of other end markets Saturated and coated papers used for backing of specialty abrasives and tapes to enhance their performance, and including digital transfer, labels, durable printing, and medical packaging applications SPECIALTIES products for a variety of other end markets including labels, durable printing, and medical packaging applications SPECIALTIES products for a variety of other end markets including labels, durable printing, and medical packaging applications SPECIALTIES products for a variety of other end markets including labels, durable printing, and medical packaging applications SPECIALTIES products for a variety of other end markets including labels, durable printing, and medical packaging applications Neenah Paper, Inc. 2016 Annual Report Neenah Paper, Inc. 2016 Annual Report Neenah, Inc. 2017 Annual Report Neenah Paper, Inc. 2016 Annual Report Neenah Paper, Inc. 2016 Annual Report FINE PAPER FINE PAPER & PACKAGING FINE PAPER Neenah is the leader in the North American premium Neenah is the leader in the North American premium Neenah is the market leader in North America in e paper market. Built on a tradition of quality the creation and manufacturing of premium paper e paper market. Built on a tradition of quality and service, we market some of the most recognized and packaging. The Neenah Fine Paper portfolio and service, we market some of the most recognized and preferred premium papers in North America, includes recognizable and distinguished brands like and preferred premium papers in North America, with distinguished brands including CLASSIC®, CLASSIC®, ENVIRONMENT®, ROYAL SUNDANCE®, with distinguished brands including CLASSIC®, ASTROBRIGHTS®, ASTROBRIGHTS® and Southworth®. With multiple ASTROBRIGHTS®, Southworth®, and ENVIRONMENT®, the premier U.S. manufacturing facilities specializing in color, Southworth®, and ENVIRONMENT®, the premier texture and specialty features, there is an offering of recycled content papers in the market. offering of recycled content papers in the market. endless combination of paper, packaging and envelopes available. ROYAL SUNDANCE®, ROYAL SUNDANCE®, Our products are also used in premium packaging Neenah Premium Packaging provides unique, Our products are also used in premium packaging and label applications for goods such as spirits, jewelry, sustainable and custom solutions for many of the world’s and label applications for goods such as spirits, jewelry, cosmetics and electronics. cosmetics and electronics. leading brands in cosmetics and fragrances; wine, Neenah’s leadership role is supported by our spirits and craft beer; and retail. Our offering includes Neenah’s leadership role is supported by our broad range of colors, textures and other product packaging materials for bags, box wraps, gift cards, broad range of colors, textures and other product features and world-class manufacturing, with gift card carriers, hangtags, labels, folding board and features and world-class manufacturing, with four facilities located in Wisconsin. fragrance strips. We provide captivating colors and four facilities located in Wisconsin. textures, customized for brands or ready-made, as well as high-performance products and hands-on customer service. OUR PRODUCTS ARE IN DEMAND WHEREVER IMAGE MATTERS: OUR PRODUCTS ARE IN DEMAND WHEREVER IMAGE MATTERS: for high-end traditional / digital printing for graphic imaging needs (cid:127) • high-end offset/digital printing of marketing and advertising collateral and (cid:127) for high-end traditional / digital printing for graphic imaging needs business identity systems and writing papers and writing papers • upscale packaging and labels in the beauty, alcohol and retail markets for specialized uses such as upscale packaging and labels (cid:127) (cid:127) for specialized uses such as upscale packaging and labels (cid:127) for unique brightly colored papers for home, school or organization • brightly colored papers for home, school or business (cid:127) for unique brightly colored papers for home, school or organization GRAPHIC IMAGING GRAPHIC IMAGING GRAPHIC IMAGING Unique colors, textures and finishes for identity systems, invitations, advertising and marketing collateral, and envelopes PREMIUM PACKAGING PREMIUM PACKAGING Image-enhancing colors and textures for premium folding board, box wrap, bags and hang tags, and labels for, cosmetics; Image-enhancing colors and textures of premium folded cartons, box wrap, bags, premium wine, beverage, Image-enhancing colors and textures of premium folded cartons, box wrap, bags, premium wine, beverage, wine, spirits, and craft beer; and retail spirit and food labels and hang tags spirit and food labels and hang tags Neenah Paper, Inc. 2014 Annual Report Neenah Paper, Inc. 2014 Annual Report Neenah, Inc. 2017 Annual Report NEENAH, INC. 2017 ANNUAL REPORT  MERRILL CORPORATION CHE109576// 2-APR-18 13:59 DISK126:[18ZAG1.18ZAG44001]BC44001A.;8 mrll_1116.fmt Free: 4030DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 17213 24MAR201805242043 NOTICE OF 2018 ANNUAL MEETING AND PROXY STATEMENT P r o x y Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: BC44001A.;8 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]BD44001A.;6 mrll_1116.fmt Free: 13DM/0D Foot: 0D/ 0D VJ Seq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 63953 P r o x y 24MAR201805242043 April 13, 2018 Dear Stockholder: On behalf of the Board of Directors, it is my pleasure to invite you to attend the 2018 Annual Meeting of Stockholders of Neenah, Inc. to be held at the Company’s headquarters located at Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005 on Wednesday, May 23, 2018 at 10:00 a.m., Eastern Time. 2017 was an important year for Neenah. We delivered record sales with volume-driven organic increases across our businesses, and completed a number of strategic activities to enhance our future growth. The largest of these was the successful start-up of a new, world-class filtration operation in Appleton, Wisconsin, to support our historic high single-digit growth rate of this global business. While the ramp up of a large, complex operation like this has a short term negative impact on profits, we remain confident and excited about the long term returns this investment provides. Further supporting our future growth was the purchase of a U.S. laminating operation to add to our premium packaging capabilities, and the acquisition of a European digital image transfer company which adds to our presence in this growing market. As always, we remain committed to deploying capital efficiently as we grow and to providing a meaningful cash return to our shareholders. In November, our Board authorized a 12 percent increase in our dividend, marking an eighth consecutive double digit increase in the past six years. We appreciate the contributions of Neenah’s dedicated employees around the world and the confidence and support of our stockholders as we continue to become a faster-growing global specialty materials company known for its ability to create value for its shareholders. Reinforcing our progress in this regard was a change in our company name to Neenah, Inc. at year end. The formal business to be transacted at the 2018 Annual Meeting includes: (cid:127) The election of the two nominees detailed in this Proxy Statement as Class II directors for a three-year term; (cid:127) Approval of an advisory vote on the Company’s executive compensation; (cid:127) Approval of the 2018 Neenah, Inc. Omnibus Stock and Incentive Compensation Plan to, among other things, increase the amount of common stock reserved for issuance under our equity incentive plans by 800,000 shares; and (cid:127) The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. At the meeting, we will provide a brief report on our results and strategies. Our directors and executive officers, as well as representatives from Deloitte & Touche LLP, will be in attendance to answer any questions you may have. Regardless of whether you choose to attend or not, please either vote electronically using the Internet, vote by telephone, or follow the procedures for requesting written copies of the proxy materials described in the attached Proxy Statement and mark, date, sign and return the proxy card included with those materials at your earliest convenience. This will assure your shares will be represented and voted at the Annual Meeting. Sincerely, 15MAR201217460616 15MAR201217460616 JOHN P. O’DONNELL President and Chief Executive Officer Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: BD44001A.;6 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]BE44001A.;9 mrll_1116.fmt Free: 20DM/0D Foot: 0D/ 0D VJ Seq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 43165 24MAR201805242043 Preston Ridge III 3460 Preston Ridge Road, Suite 600 Alpharetta, Georgia 30005 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 23, 2018 NOTICE HEREBY IS GIVEN that the 2018 Annual Meeting of Stockholders of Neenah, Inc. will be held at the Company’s headquarters located at Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005 on Wednesday, May 23, 2018 at 10:00 a.m., Eastern time, for the purpose of considering and voting upon: P r o x y 1. A proposal to elect the two nominees named as Class II directors in the attached Proxy Statement to serve until the 2021 Annual Meeting of Stockholders; 2. A proposal to approve, on an advisory basis, the Company’s executive compensation; 3. A proposal to approve the 2018 Neenah, Inc. Omnibus Stock and Incentive Compensation Plan to, among other things, increase the amount of common stock reserved for issuance under our equity incentive plans by 800,000 shares; and; 4. A proposal to ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of Neenah, Inc. for the fiscal year ending December 31, 2018; and 5. Such other business as properly may come before the Annual Meeting or any adjournments thereof. The Board of Directors is not aware of any other business to be presented to a vote of the stockholders at the Annual Meeting. Information relating to the above matters is set forth in the attached Proxy Statement. Stockholders of record at the close of business on March 29, 2018 are entitled to receive notice of and to vote at the Annual Meeting and any adjournments thereof. This Proxy Statement and the 2017 Annual Report to Stockholders are available at www.neenah.com/proxydocs. By order of the Board of Directors. 29APR200510193718 STEVEN S. HEINRICHS Senior Vice President, General Counsel and Secretary Alpharetta, Georgia April 13, 2018 PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN VOTE ELECTRONICALLY, BY TELEPHONE, OR REQUEST PRINTED PROXY MATERIALS AND PROMPTLY COMPLETE, EXECUTE AND RETURN THE PROXY CARD INCLUDED WITH THE PROXY MATERIALS IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: BE44001A.;9 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:45 DISK126:[18ZAG1.18ZAG44001]BG44001A.;10 mrll_1116.fmt Free: 2630DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 8801 Table of Contents ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BENEFICIAL OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ELECTION OF DIRECTORS (ITEM 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 2) . . . . . . . . . . . . . . . . . . . . . APPROVAL OF 2018 NEENAH, INC. OMNIBUS STOCK AND INCENTIVE PLAN (ITEM 3) ADDITIONAL EXECUTIVE COMPENSATION INFORMATION . . . . . . . . . . . . . . . . . . . . . . COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION . . . . . . . . . SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE . . . . . . . . . . . . . . . AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (ITEM 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES . . . . . STOCKHOLDERS’ PROPOSALS FOR 2019 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING . . . . . . . . . . . . . HOUSEHOLDING OF NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS . 4 4 7 10 13 15 19 21 34 35 37 44 51 51 52 53 53 54 54 55 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: BG44001A.;10 v6.8  MERRILL CORPORATION CHE109870// 3-APR-18 14:16 DISK126:[18ZAG1.18ZAG44001]DA44001A.;14 mrll_1116.fmt Free: 1DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 19829 24MAR201805242043 PROXY STATEMENT General Information Our Board of Directors is soliciting proxies from our stockholders in connection with Neenah’s Annual Meeting of Stockholders. When used in this Proxy Statement, the terms ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ ‘‘the Company’’ and ‘‘Neenah’’ refer to Neenah, Inc. and its consolidated subsidiaries. This Proxy Statement and our 2017 Annual Report are first being mailed to stockholders who requested copies, and made available on April 13, 2018. Effective January 1, 2018, Neenah Paper, Inc. changed its name to Neenah, Inc. The Company’s ticker symbol on the New York Stock Exchange remains ‘‘NP’’ and the names of subsidiaries were not affected. SUMMARY This summary highlights information contained in the Proxy Statement. It does not include all of the information that you should consider prior to voting and we encourage you to read the entire document prior to voting. For more complete information regarding Neenah’s 2017 financial performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Stockholders are being asked to vote on the following matters at the 2018 Annual Meeting of Stockholders: P r o x y ITEM 1. Election of Directors (page 10) The Board and the Nominating and Corporate Governance Committee believe that the two Class II Director nominees possess the necessary qualifications, attributes, skills and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of stockholders. ITEM 2. Advisory Vote to Approve Executive Compensation (page 29) The Company seeks a non-binding advisory vote to approve the compensation of its named executive officers as described in the Compensation Discussion and Analysis section beginning on page 17 and the Executive Compensation Tables section beginning on page 29. The Board values stockholders’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions. ITEM 3. Approval of the Company’s 2018 Stock and Incentive Compensation Plan (page 30) The Company seeks approval of the 2018 Neenah, Inc. Omnibus Stock and Incentive Compensation Plan (a copy of which is attached to this Proxy Statement as an Appendix). The Board believes approval of the 2018 Neenah, Inc. Omnibus Stock and Incentive Compensation Plan to, among other things, increase the amount of common stock reserved for issuance under our equity compensation plans by 800,000 shares is appropriate and in the best interest of the Company and its stockholders; and. ITEM 4. Ratification of the Appointment of Deloitte & Touche, LLP, as Independent Auditors (page 42) The Audit Committee and the Board believe that the retention of Deloitte & Touche, LLP, to serve as the Independent Auditors for the fiscal year ending December 31, 2018 is in the best interest of the Company and its stockholders. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s selection of the Independent Auditors. 3 Our Board’s Recommendation FOR each Director Nominee FOR FOR FOR Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DA44001A.;14 v6.8  MERRILL CORPORATION CHE109870// 3-APR-18 14:16 DISK126:[18ZAG1.18ZAG44001]DA44001A.;14 mrll_1116.fmt Free: 10D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 24717 Questions and Answers about the Annual Meeting and Voting When and where is the Annual Meeting? When: Wednesday, May 23, 2018, at 10:00 A.M. Eastern Daylight Time Where: Company headquarters located at Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005 Who is entitled to vote at the Annual Meeting? You are entitled to vote at the Annual Meeting if you owned our common stock, par value $0.01 per share, as of the close of business March 29, 2018 (the ‘‘Record Date’’), with each share entitling its owner to one vote on each matter submitted to the stockholders. On the record date, 16,823,111 shares of common stock were outstanding and eligible to be voted at the Annual Meeting. The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of our common stock is necessary to constitute a quorum at the Annual Meeting. How do I vote at the Annual Meeting? You may vote in person at the Annual Meeting or by proxy. We recommend you vote by proxy even if you plan to attend the Annual Meeting. You can always change your vote at the meeting. Giving us your proxy means you authorize us to vote your shares at the Annual Meeting in the manner you direct. If you plan to attend the meeting in person you must provide proof of your ownership of our common stock as of the record date, such as an account statement, and a form of personal identification for admission to the meeting. If you hold your shares in street name and you also wish to be able to vote at the annual meeting, you are required to obtain a proxy from your bank or broker, executed in your favor. If your shares are held in your name, you can vote by proxy in three convenient ways: (cid:127) Via the Internet: Go to http://www.proxyvote.com and follow the instructions. (cid:127) By Telephone: Call toll-free 1-800-690-6903 and follow the instructions. (cid:127) By Mail: Request a printed copy of the proxy materials disclosed in this Proxy Statement and complete, sign, date and return your proxy card in the envelope included with your printed proxy materials. If your shares are held in street name, the availability of telephone and internet voting will depend on the voting processes of the applicable bank or brokerage firm; therefore, it is recommended that you follow the voting instructions on the form you receive from your bank or brokerage firm. All properly executed proxies received by Neenah in time to be voted at the Annual Meeting and not revoked will be voted at the Annual Meeting in accordance with the directions noted on the proxy card. If any other matters properly come before the Annual Meeting, the persons named as proxies will vote upon such matters according to their judgment. We are also sending the Notice and voting materials to participants in various employee benefit plans of Neenah. The trustee of each plan, as the stockholder of record of the shares of common stock held in the plan, will vote whole shares of stock attributable to each participant’s interest in the plan in accordance with the directions the participant gives or, if no directions are given by the participant, in accordance with the directions received from the applicable plan committees. Can I change my vote? Any stockholder of record delivering a proxy has the power to revoke it at any time before it is voted: (i) by giving written notice to Steven S. Heinrichs, Senior Vice President, General Counsel and Secretary of Neenah, at Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, 4 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DA44001A.;14 v6.8  MERRILL CORPORATION CHE109870// 3-APR-18 14:16 DISK126:[18ZAG1.18ZAG44001]DA44001A.;14 mrll_1116.fmt Free: 50D*/540D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 30986 P r o x y Georgia, 30005; (ii) by submitting a proxy card bearing a later date, including a proxy submitted via the Internet or by telephone; or (iii) by voting in person at the Annual Meeting. Please note, however, that any beneficial owner of our common stock whose shares are held in street name may (a) revoke his or her proxy and (b) attend and vote his or her shares in person at the Annual Meeting only in accordance with applicable rules and procedures as then may be employed by such beneficial owner’s brokerage firm or bank. What Proposals am I being asked to vote on at the Annual Meeting and what is required to approve each proposal? You are being asked to vote on four proposals: Proposal 1 the election of the proposed nominees as Class II directors; Proposal 2 the approval, in a non-binding advisory vote, of Neenah’s executive compensation; Proposal 3 the approval of the Company’s Omnibus Plan; and Proposal 4 the ratification of the appointment of our independent public accounting firm. In voting with regard to Proposal 1, you may vote in favor of each nominees, against each nominee, or may abstain from voting. A majority of the shares of common stock represented and entitled to vote on Proposal 1 is required for the election of each director, provided a quorum is present. Abstentions will be considered in determining the number of votes required to obtain the necessary majority vote for the proposal, and therefore will have the same legal effect as votes against the proposal. In voting with regard to Proposals 2, 3 and 4 you may vote in favor of each proposal, against each proposal, or may abstain from voting. The vote required to approve Proposals 2, 3 and 4 is majority of the shares of common stock represented and entitled to vote, provided a quorum is present. Abstentions will be considered in determining the number of votes required to obtain the necessary majority vote for each proposal, and therefore will have the same legal effect as votes against such proposal. Neenah is not aware, as of the date hereof, of any matters to be voted upon at the Annual Meeting other than those stated in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named as proxies to vote the shares represented thereby in their discretion. What happens if I don’t return my proxy card or vote my shares? If you hold your shares directly your shares will not be voted if you do not return your proxy card or vote in person at the Annual Meeting. If your shares are held in the name of a bank or brokerage firm (in ‘‘street name’’) and you do not vote your shares, your bank or brokerage firm can only vote your shares in their discretion for proposals which are considered ‘‘discretionary’’ proposals. We believe that Proposal 4 is a discretionary proposal. Brokers are prohibited from exercising discretionary authority for beneficial owners who have not provided voting instructions to the broker for proposals which are considered ‘‘non-discretionary’’ (a ‘‘broker non-vote’’). We believe Proposals 1, 2 and 3 are non-discretionary proposals. As such, broker non-votes will be counted for the purpose of determining if a quorum is present, but will not be considered as shares entitled to vote on Proposals 1, 2 and 3, and therefore will have no effect on the outcome of these proposals. What happens if I sign, date and return my proxy card but do not specify how to vote my shares? If a signed proxy card is received which does not specify a vote or an abstention, then the shares represented by that proxy card will be voted FOR the election of all Class II director nominees described herein, FOR the approval of the Company’s executive compensation, FOR the approval of the Company’s 2018 Stock and Incentive Compensation Plan, and FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2018. 5 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DA44001A.;14 v6.8  MERRILL CORPORATION CHE109870// 3-APR-18 14:16 DISK126:[18ZAG1.18ZAG44001]DA44001A.;14 mrll_1116.fmt Free: 3470DM/0D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 55085 Why haven’t I received a printed copy of the Proxy Statement or annual report? We are choosing to follow the Securities and Exchange Commission (‘‘SEC’’) rules that allow companies to furnish proxy materials to stockholders via the Internet. If you received a Notice of Internet Availability of Proxy Materials, or ‘‘Notice,’’ by mail, you will not receive a printed copy of the proxy materials, unless you specifically request one. The Notice instructs you on how to access and review all of the important information contained in the proxy statement and annual report as well as how to submit your proxy over the Internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials included in the Notice. We plan to mail the Notice to stockholders by April 13, 2018. Who pays for the cost of this proxy solicitation? We will bear the cost of preparing, printing and filing the Proxy Statement and related proxy materials. In addition to soliciting proxies through the mail, we may solicit proxies through our directors, officers and employees, in person and by telephone or email and facsimile. We expect to retain Okapi Partners LLC to aid in the solicitation at a cost of approximately $8,500, plus reimbursement of out-of-pocket expenses. Brokerage firms, nominees, custodians and fiduciaries also may be requested to forward proxy materials to the beneficial owners of shares held of record by them. We will pay all expenses incurred in connection with the solicitation of proxies. When will voting results be made available? We will announce the final results on our web site at www.neenah.com shortly after the meeting and on Form 8-K immediately following the meeting. 6 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DA44001A.;14 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DC44001A.;9 mrll_1116.fmt Free: 250D*/300D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 4784 P r o x y BENEFICIAL OWNERSHIP DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information regarding the beneficial ownership of our common stock as of March 29, 2018 with respect to: (i) each of our directors; (ii) each of the named executive officers appearing elsewhere herein; and (iii) all executive officers and directors as a group, based in each case on information furnished to us by such persons. As used in this Proxy Statement, ‘‘beneficial ownership’’ means that a person has, as of March 31, 2018, or may have within 60 days thereafter, the sole or shared power to vote or direct the voting of a security and/or the sole or shared investment power to dispose of or direct the disposition of a security. Name Shares Beneficially Owned(1) Percent of Class(2) William M. Cook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Margaret S. Dano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sean T. Erwin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Steven S. Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bonnie C. Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Timothy S. Lucas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John F. McGovern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philip C. Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John P. O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matthew L. Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Julie A. Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen M. Wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . All directors and executive officers as a group (15 persons) . . . . . . . . . . . . . . . 2,881(3) 3,778(4) 20,563(5) 24,085(6) 27,867(7) 15,693(8) 4,155 20,927(9) 86,353(10) 217(11) 4,691(12) 44,113(13) 287,822(14) * * * * * * * * * * * * 1.5 (1) Except as otherwise noted, the directors and executive officers, and all directors and executive officers as a group, have sole voting power and sole investment power over the shares listed. Shares of common stock held by the trustee of Neenah’s 401(k) Retirement Plan for the benefit of, and which are attributable to our executive officers are included in the table. (2) An asterisk indicates that the percentage of common stock beneficially owned by the named individual does not exceed 1% of the total outstanding shares of our common stock. (3) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. (4) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. (5) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. This total does not include 3,500 vested Stock Appreciation Rights. (6) This total does not include 8,044 vested Stock Appreciation Rights. (7) This total does not include 11,462 vested Stock Appreciation Rights. (8) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. This total does not include 7,310 vested Stock Appreciation Rights. 7 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DC44001A.;9 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DC44001A.;9 mrll_1116.fmt Free: 4550DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 34044 (9) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. (10) This total does not include 31,125 vested Stock Appreciation Rights. (11) This total does not include 2,429 vested Stock Appreciation Rights. (12) This total does not include 23,007 vested Stock Appreciation Rights. (13) Includes 1,318 shares of common stock issuable upon conversion of restricted stock units that are vested or will vest within 60 days of March 29, 2018. (14) On July 1, 2014 the Company converted all outstanding Stock Options to Stock Appreciation Rights which are not included in the calculation of beneficial ownership. Stock Appreciation Rights are disclosed in detail under the Outstanding Equity at the End of 2017 section of this Proxy Statement. 8 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DC44001A.;9 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DC44001A.;9 mrll_1116.fmt Free: 750DM/0D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 4200 THIRD PARTIES The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2017 for each person known to us to be the beneficial owner of more than 5% of our outstanding common stock. Name and Address of Beneficial Owner Common Stock Beneficially Owned Number of Shares Percent of Class Blackrock, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,134,590(1) 12.7% 55 East 52nd Street New York, NY 10055 The Vanguard Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960,913(2) 5.7% 100 Vanguard Blvd. Malverne, PA 19355 Wells Fargo & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 939,227(3) 5.6% 420 Montgomery St. San Francisco, CA 94163 P r o x y Wells Capital Management Incorporated . . . . . . . . . . . . . . . . . . . . . . 878,915(4) 5.23% 525 Market Street, 10th Floor San Francisco, CA 94105 (1) The amount shown and the following information is derived from the Schedule 13G filed by Blackrock, Inc. on January 19, 2018, reporting beneficial ownership as of December 31, 2017. Of the 2,134,590 shares shown, BlackRock, Inc. has sole dispositive power over all of the shares and sole voting power over 2,098,929 shares. (2) The amount shown and the following information is derived from the Schedule 13G filed by The Vanguard Group, on February 9, 2018, reporting beneficial ownership as of December 31, 2017. Of the 960,913 shares shown The Vanguard Group has sole dispositive power over 928,796 of the shares, , shared voting power with respect to 3,500 shares, shared dispositive power with respect to 32,117 shares and sole voting power over 30,032 shares. (3) The amount shown and the following information is derived from the Schedule 13G filed by Wells Fargo and Company, on behalf of itself and certain subsidiaries named therein, on January 30, 2018, reporting beneficial ownership as of December 31, 2017. Of the 939,227 shares shown Wells Fargo and Company has sole dispositive power over 14,721 of the shares, shared voting power with respect to 239,143 shares, shared dispositive power with respect to 924,506 shares and sole voting power over 14,721 shares. (4) The amount shown and the following information is derived from the Schedule 13G filed by Wells Capital Management Incorporated, on January 30, 2018, reporting beneficial ownership as of December 31, 2017. Of the 878,915 shares shown Wells Capital Management Incorporated has shared voting power with respect to 791,658 shares and shared dispositive power with respect to all of the shares. 9 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DC44001A.;9 v6.8  MERRILL CORPORATION CHE109870// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DE44001A.;7 mrll_1116.fmt Free: 130D*/300D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 14862 ELECTION OF DIRECTORS (ITEM 1) The Board unanimously recommends that the stockholders vote ‘‘FOR’’ the proposal to elect Margaret S. Dano and Stephen M. Wood as Class II directors for a three-year term expiring at the 2021 Annual Meeting of Stockholders and until their successors have been duly elected and qualified. The Board currently consists of eight members divided into two classes of three directors and one class of two directors. The directors in each class serve three year terms, with the terms of the Class II directors expiring at the 2018 Annual Meeting. The Board has nominated Margaret S. Dano and Stephen M. Wood, each a current director of Neenah, for re-election as Class II directors at the 2018 Annual Meeting. If elected, the nominees will serve a three-year term expiring at the 2021 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Each of the nominees has consented to serve another term as a director if re-elected. If any of the nominees should be unavailable to serve for any reason (which is not anticipated), the Board may designate a substitute nominee or nominees (in which event the persons named on the enclosed proxy card will vote the shares represented by all valid proxy cards for the election of such substitute nominee or nominees), allow the vacancies to remain open until a suitable candidate or candidates are located, or by resolution provide for a lesser number of directors. If any incumbent nominee for director in an uncontested election should fail to receive the required affirmative vote of the holders of a majority of the shares represented and entitled to vote at the Annual Meeting, under Delaware law the director remains in office as a ‘‘holdover’’ director until his or her successor is elected and qualified or until his or her earlier resignation, retirement, disqualification, removal from office or death. In the event of a holdover director, the Board of Directors in its discretion may request the director to resign from the Board. If the director resigns, the Board of Directors may immediately fill the resulting vacancy, allow the vacancy to remain open until a suitable candidate is located and appointed or adopt a resolution to decrease the authorized number of directors. Set forth below is certain information as of March 29, 2018, regarding the nominees and each director continuing in office, including their ages, principal occupations (which have continued for at least the past five years unless otherwise noted), current Board experience and participation, and how the background, experience and qualification of each nominee and director make them well suited to serve on Neenah’s Board. Information Regarding Directors Nominated for Reelection Margaret S. Dano, born in 1959, is the former Chairman of the Board for Superior Industries International, Inc., a leading manufacturer of aluminum road wheels for use in the automobile and light truck industry. Ms. Dano was appointed as Chairman of the Board in 2014 and served as a director for Superior from 2007 to 2017. In addition, Ms. Dano currently serves as a director of Douglas Dynamics, Inc., a manufacturer of snow and ice control equipment for the global light truck market, a position she has held since 2012, where she chairs the Governance committee and serves on both the compensation and audit committees. From 2002 to 2005 Ms. Dano served as Vice President, Worldwide Integrated Supply Chain and Operations for Honeywell Corporation. Prior to that she served as Vice President, Worldwide Supply Chain Office Products & GM Printer Papers for Avery Dennison Corporation from 1999 to 2002 and Vice President of Corporate Manufacturing & Engineering from 1996 1999. Ms. Dano received a BS in mechanical engineering from Kettering University (formerly the General Motors Institute). Ms. Dano was appointed to Neenah’s Board in 2015. Ms. Dano’s senior executive experience in global manufacturing and supply chain and her public board experience and leadership with manufacturing companies makes her an effective member of Neenah’s Board. 10 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DE44001A.;7 v6.8  MERRILL CORPORATION CHE109870// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DE44001A.;7 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 12091 P r o x y Stephen M. Wood, Ph.D., born in 1946, is an Operating Partner with Snow Phipps Group LLC, an internationally diversified investment company. Prior to this he served as Chairman of the Board for FiberVisions Corporation which is a leading global manufacturer of synthetic fibers for consumer products, construction and industrial applications. Dr. Wood was President and Chief Executive Officer of FiberVisions from 2006 to 2012. Dr. Wood was also Chairman of the Board of ESFV which is a global joint Venture with JNC Corporation, a leading Japanese Chemical Company. From 2001 to 2004, Dr. Wood served as President and Chief Executive Officer of Kraton Polymers, a specialties chemical company, and Chairman and Representative Director of JSR Kraton Elastomers, a Japanese joint venture company. Prior to this Dr. Wood was President of the Global Elastomers business of Shell Chemicals, Ltd., and a Vice President of that company. Dr. Wood was also elected International President of the International Institute of Synthetic Rubber Producers. Dr. Wood has a BSc in Chemistry and a Ph.D. in Chemical Engineering from Nottingham University, United Kingdom and is a graduate of the Institute of Chemical Engineers and a Fellow of the Institute of Directors. Dr. Wood has served as a director of Neenah since November 30, 2004. Dr. Wood’s experience as the senior executive of global chemical manufacturing companies, his international and previous board experience and his educational background make him an effective member of Neenah’s Board. Class III Directors—Term Expiring at the 2019 Annual Meeting Sean T. Erwin, born in 1951, is the Chairman of our Board of Directors. Mr. Erwin served as the Company’s President and Chief Executive Officer from 2004 through May 2011. Prior to the spin-off of Neenah from Kimberly Clark Corporation on November 30, 2004 (the ‘‘spin-off’’), Mr. Erwin had been an employee of Kimberly Clark since 1978, and had held increasingly senior positions in both finance and business management. In January 2004, Mr. Erwin was named President of Kimberly Clark’s Pulp and Paper Sector, which comprised the businesses transferred to us by Kimberly Clark in the spin-off. He served as the President of the Global Nonwoven business from early 2001. He has also served as the President of the European Consumer Tissue business, Managing Director of Kimberly Clark Australia, as well as previously serving as President of the Pulp and Paper Sector, and President of the Technical Paper business. Mr. Erwin received his BS in Accounting and Finance from Northern Illinois University. Mr. Erwin served as a director of Carmike Cinemas, Inc. from 2012-2016. Mr. Erwin has served as a director of Neenah since November 30, 2004. Mr. Erwin’s extensive experience as former CEO of the Company and his vast industry experience and leadership positions make him an effective member of Neenah’s Board. John F. McGovern, born in 1946, is the founder, and since 1999 a partner, of Aurora Capital LLC, a private investment and consulting firm based in Atlanta, Georgia. Prior to founding Aurora Capital, Mr. McGovern served in a number of positions of increasing responsibility at Georgia Pacific Corporation from 1981 to 1999, including Executive Vice President/Chief Financial Officer from 1994 to 1999. Previously, Mr. McGovern had been Vice President and Director, Forest Products and Package Division of Chase Manhattan Bank. He currently serves as a director of Xerium Technologies, Inc. where he serves as audit committee chairman. Mr. McGovern also served as a director of GenTek, Inc. from 2003 to 2009, Maxim Crane Works Holdings, Inc. from 2005 to 2008, and Collective Brands Inc. from 2003 to 2012. From 2006 to 2010, Mr. McGovern served as lead director of Neenah’s Board for all executive sessions of non-management directors. Mr. McGovern has served as a director of Neenah since January 10, 2006. Mr. McGovern received his BS from Fordham University. Mr. McGovern’s extensive experience as the senior financial executive of a multinational paper products company and his experience as an executive in the financial services industry as well as his experience on other public company boards make him an effective member of Neenah’s Board. Timothy S. Lucas, born in 1946, retired as an independent consultant on financial reporting issues in December of 2017; he had been practicing as Lucas Financial Reporting since 2002. From 1988 to 2002, Mr. Lucas worked at the Financial Accounting Standards Board (‘‘FASB’’), where he was the 11 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DE44001A.;7 v6.8  MERRILL CORPORATION CHE109870// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DE44001A.;7 mrll_1116.fmt Free: 110D*/0D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 55750 Director of Research and Technical Activities, and Chairman of the FASB’s Emerging Issues Task Force. Mr. Lucas has served as a director of Neenah since November 30, 2004. Mr. Lucas received his BA in Economics and BS in Accounting from Rice University and his Master of Accounting from the Jesse H. Jones Graduate School, Rice University. Mr. Lucas’ experience at FASB, consulting experience, and his educational background make him an effective member of Neenah’s Board. Class I Directors—Term Expiring at the 2020 Annual Meeting John P. O’Donnell, born in 1960, is President and Chief Executive Officer of the Company. Prior to being CEO, Mr. O’Donnell served as Chief Operating Officer of the Company and President, Fine Paper. Mr. O’Donnell was employed by Georgia Pacific Corporation from 1985 until 2007 and held increasingly senior management positions in the Consumer Products division. Mr. O’Donnell served as President of the North American Retail Business from 2004 through 2007, and as President of the North American Commercial Tissue business from 2002 through 2004. Mr. O’Donnell received his BS from Iowa State University. Mr. O’Donnell has served as a director of Neenah since November 2010. Mr. O’Donnell has also served as a Director for Clearwater Paper since April 2016. Mr. O’Donnell’s extensive experience in the paper and consumer products industries, and his leadership positions in the Company, makes him an effective member of Neenah’s Board. William M. Cook, born 1953, is the retired Executive Chairman (2015-2016) of Donaldson Company Inc., a technology-driven global company that manufacturers filtration systems to remove contaminants from air and liquids. Mr. Cook is also the former Chairman, President and Chief Executive Officer (2004-2015) of Donaldson. Prior to that, Mr. Cook held various roles at Donaldson of increasing responsibility, including service as Senior Vice President, International (2000-2004); Chief Financial Officer (2001-2004); and Senior Vice President, Commercial and Industrial (1994-2000). Mr. Cook is also currently a Director of IDEX Corporation and was a director of Valspar Corporation from 2010 to 2017. Mr. Cook brings to the Neenah Board his filtration industry and operations experience and financial expertise for the past 35 years at Donaldson where he held a wide range of financial and business positions with global responsibilities. Mr. Cook is an experienced public company Board member having served on the Donaldson Board from 2004-2016 and as an independent director. Mr. Cook also has valuable Board experience from his past service to various private and charitable organizations. Mr. Cook holds a B.S. degree in Business Management and an M.B.A. degree from Virginia Tech. Mr. Cook’s educational background, financial expertise and extensive experience in the filtration industry makes him an effective member of Neenah’s Board. Philip C. Moore, born in 1953, retired as Senior Vice President, Deputy General Counsel and Corporate Secretary of TD Bank Group, Toronto, Canada on December 31, 2016. Mr. Moore joined TD Bank Group in May 2013, prior to which he had been a partner at McCarthy T´etrault LLP, Canada’s national law firm where he practiced corporate and securities law in Toronto and Sydney, Australia, with particular emphasis on corporate governance and finance, mergers and acquisitions and other business law issues. He has been involved in many corporate mergers, acquisitions, dispositions and reorganizations, as well as capital markets transactions in a variety of industries and geographies. Mr. Moore has extensive experience in corporate transactions involving the pulp and paper industries. Mr. Moore has been awarded the designation ‘‘Chartered Director’’ from the Directors College, Canada’s leading director education program run by McMaster University and the Conference Board of Canada. He has advised on the design and implementation of numerous executive compensation plans, as well as on executive compensation governance matters. From 1994 until 2000, he was a director of Imax Corporation and is currently a director of a number of private corporations. Mr. Moore has served as a director of Neenah since November 30, 2004. Mr. Moore received his BA from McMaster University and his LLB from Queen’s University. Mr. Moore’s educational background and extensive experience in corporate governance and business law makes him an effective member of Neenah’s Board. 12 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DE44001A.;7 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DG44001A.;6 mrll_1116.fmt Free: 270D*/720D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 47411 P r o x y MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors conducts its business through meetings of the full Board and through committees of the Board, consisting of an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, which we refer to as the Nominating Committee. The Board of Directors held five meetings in 2017. The Company’s Corporate Governance Policies provide that all directors are expected to regularly attend and participate in Board and Committee meetings and encourage the directors to attend the Company’s Annual Meeting. In 2017 our directors attended 100% of the meetings of the Board and meetings of the committees of which he or she is a member. Neenah holds regularly scheduled executive sessions of the independent directors at each Board meeting. As Chairman of the Board Mr. Erwin presides at all the executive sessions other than meetings of the non-affiliated independent directors, at which Mr. McGovern presides. All of the Company’s directors were in attendance at the 2017 Annual Meeting. The following table describes the membership of each of the committees as of the 2018 Annual Meeting: Audit Committee Nominating and Corporate Governance Committee Compensation Committee Philip C. Moore . . . . . . . . . . . . . . . . . Timothy S. Lucas . . . . . . . . . . . . . . . . John F. McGovern . . . . . . . . . . . . . . . Stephen M. Wood . . . . . . . . . . . . . . . . Margaret S. Dano . . . . . . . . . . . . . . . . William M. Cook . . . . . . . . . . . . . . . . Number of meetings . . . . . . . . . . . . . . X Chair* X X* 8 X Chair X X 4 X X Chair X 5 * The Board has determined that Mr. Lucas and Mr. Cook are audit committee financial experts within the meaning of the SEC’s rules. Audit Committee The Audit Committee is comprised solely of directors who meet the independence requirements of the New York Stock Exchange (‘‘NYSE’’) and the Securities Exchange Act of 1934, as amended (‘‘Exchange Act’’), and are financially literate, as required by NYSE rules. At least one member of the Audit Committee is an audit committee financial expert, as defined by the rules and regulations of SEC. The Audit Committee has been established in accordance with applicable rules promulgated by the NYSE and SEC. The Audit Committee assists the Board in monitoring: (cid:127) the quality and integrity of our financial statements; (cid:127) our compliance with ethical policies contained in our Code of Business Conduct and Ethics and legal and regulatory requirements as well as the administration of our policy regarding related party transactions; (cid:127) the independence, qualification and performance of our registered public accounting firm; (cid:127) the performance of our internal auditors; and (cid:127) related party transactions. The Audit Committee is governed by the Audit Committee Charter approved by the Board. The charter is available on our website at www.neenah.com. 13 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DG44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DG44001A.;6 mrll_1116.fmt Free: 1910DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 34525 Nominating and Corporate Governance Committee The Nominating Committee is comprised solely of directors who meet the NYSE independence requirements. The Nominating Committee: (cid:127) oversees the process by which individuals are nominated to our Board; (cid:127) reviews the qualifications, performance and independence of members of our Board; (cid:127) reviews and recommends policies with respect to composition, organization, processes and practices of our Board, including diversity; and (cid:127) identifies and investigates emerging corporate governance issues and trends that may affect us. The Nominating Committee is governed by the Nominating and Corporate Governance Committee Charter approved by the Board. The charter is available on our website at www.neenah.com. Compensation Committee The Compensation Committee is comprised solely of directors who meet NYSE independence requirements, meet the requirements for a ‘‘nonemployee director’’ under the Exchange Act, and meet the requirements for an ‘‘outside director’’ under Section 162(m) of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’). The Compensation Committee: (cid:127) reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and sets such compensation; (cid:127) approves, in consultation with our Chief Executive Officer, the compensation of our officers who are elected by our Board; (cid:127) makes recommendations to our Board with respect to our equity-based plans and executive incentive compensation plans; and (cid:127) reviews with management and approves awards under our long-term incentive-compensation plans and equity-based plans. The Compensation Committee is governed by the Compensation Committee Charter approved by the Board. The charter is available on our website at www.neenah.com. Additional information regarding the Compensation Committee’s processes and procedures for consideration of executive compensation is provided in the Compensation Discussion and Analysis below. 14 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DG44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DI44001A.;6 mrll_1116.fmt Free: 250D*/300D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 47176 P r o x y CORPORATE GOVERNANCE Board Leadership The Board selects from among its members the Chairman of the Board. The Board also elects the Chief Executive Officer of the Company. The current Board Leadership is as Follows: Chairman of the Board: Chief Executive Officer: Sean T. Erwin John P. O’Donnell The Board believes that at this time it is appropriate for Mr. Erwin to serve as independent Chairman while Mr. O’Donnell serves as Chief Executive Officer and a member of the Board. Mr. O’Donnell’s position as both CEO and a Director provides a continuity of leadership between the senior executive team and the Board and enhances the corporate governance environment of the Board. Independent Directors Our Amended and Restated Bylaws provide that a majority of the directors on our Board shall be independent and currently seven out of the eight directors are independent. In addition, the Corporate Governance Policies adopted by the Board, described further below, provide for independence standards consistent with NYSE listing standards. Generally, a director does not qualify as an independent director if the director (or in some cases, members of the director’s immediate family) has, or in the past three years has had, certain material relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. Having seven out of eight independent directors provides Neenah with a sufficient level of oversight, governance and independence without unduly limiting the senior executives from acting in the best interest of the Company and its shareholders. Even though Mr. Erwin is considered independent according to NYSE listing standards and SEC regulations, the Board appointed John F. McGovern to serve as Presiding Director for meetings of the non-affiliated independent directors. In evaluating the independence of our independent directors, the Board also considered whether any of the independent directors had any material relationships with Neenah and concluded that no such material relationship existed that would impair their independence. See ‘‘Approval of Related Party Transactions’’ below. In making this determination, the Board relied both on information provided by our directors as well as information developed internally by Neenah. As is currently the case, immediately after the election of the nominees to the Board of Directors, a majority of all directors holding office will be independent directors. The Nominating Committee and the Board have affirmatively determined that seven of the Company’s eight directors do not have any relationship that would interfere with the exercise of independent judgment in carrying out their responsibilities as directors and are independent in accordance with NYSE listing standards, rules and regulations and our Corporate Governance Policies. Neenah’s independent directors are Sean T. Erwin, Margaret S. Dano, Stephen M. Wood, John F. McGovern, Timothy S. Lucas, Philip C. Moore and William M. Cook. Nomination of Directors The Board of Directors is responsible for approving candidates for Board membership. The Board has delegated the screening and recruitment process to the Nominating Committee, in consultation with the Chairman of the Board and Chief Executive Officer. More specifically, our Nominating Committee has adopted, and the Board has ratified, the ‘‘Neenah, Inc. Policy Regarding Qualification and Nomination of Director Candidates.’’ 15 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DI44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DI44001A.;6 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 52427 The Nominating Committee seeks to create a Board that is as a whole strong in its collective knowledge of, and diversity of skills and experience with respect to, accounting and finance, management and leadership, vision and strategy, business operations, business judgment, crisis management, risk assessment, industry knowledge, corporate governance, education, background and global markets. Qualified candidates for director are those who, in the judgment of the Nominating Committee, possess all of the following personal attributes and a sufficient mix of the following experience attributes to assure effective service on the Board. Personal attributes of a Board candidate considered by the Nominating Committee include: leadership, ethical nature, contributing nature, independence, interpersonal skills, and effectiveness. Experience attributes of a Board candidate considered by the Nominating Committee include: financial acumen, general business experience, industry knowledge, diversity of view-points, special business experience and expertise. When the Nominating Committee reviews a potential new candidate, the Nominating Committee looks specifically at the candidate’s qualifications in light of the needs of the Board and our company at that time, given the then current mix of director attributes. Although the Company does not have a specific Board diversity policy, the Nominating Committee looks at the diversity of experience, background and Board composition in recommending director candidates as required by the Nominating Committee’s charter. The Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating Committee periodically assesses the appropriate size of the Board and whether any vacancies on the Board are expected. In the event that vacancies are anticipated or otherwise arise, the Nominating Committee will seek to identify director candidates based on input provided by a number of sources, including: (i) Nominating Committee members; (ii) other directors of Neenah; (iii) management of Neenah; and (iv) stockholders of Neenah. The Nominating Committee also has the authority to consult with or retain advisors or search firms to assist in the identification of qualified director candidates. The Nominating Committee will consider nominees recommended by stockholders as candidates for election to the Board. A stockholder wishing to nominate a candidate for election to the Board at the Annual Meeting is required to give written notice to the Secretary of Neenah of his or her intention to make a nomination. Pursuant to our Amended and Restated Bylaws, the notice of nomination must be received by Neenah not less than 50 days nor more than 75 days prior to the Annual Meeting, or if Neenah gives less than 60 days’ notice of the meeting date, the notice of nomination must be received within 10 days after the Annual Meeting date is announced. To recommend a nominee, a stockholder should write to Steven S. Heinrichs, Senior Vice President, General Counsel and Secretary of Neenah, at 3460 Preston Ridge Road, Preston Ridge III, Suite 600, Alpharetta, Georgia 30005. Any such recommendation must include: (cid:127) the name and address of the stockholder and a representation that the stockholder is a holder of record of shares of our common stock; (cid:127) a brief biographical description for the nominee, including his or her name, age, business and residence addresses, occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above; (cid:127) a description of all arrangements or understandings between the stockholder and each nominee; and (cid:127) the candidate’s consent to serve as a director if elected. Once director candidates have been identified, the Nominating Committee will then evaluate each candidate in light of his or her qualifications and credentials and any additional factors that the 16 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DI44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DI44001A.;6 mrll_1116.fmt Free: 170D*/240D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 48781 P r o x y Nominating Committee deems necessary or appropriate, including those set forth above. Qualified prospective candidates will be interviewed by the Chairman of the Board, the Chief Executive Officer and at least one member of the Nominating Committee. The full Board will be kept informed of the candidate’s progress. Using input from such interviews and other information obtained by the Nominating Committee, the Nominating Committee will evaluate whether a prospective candidate is qualified to serve as a director and, if so qualified, will seek full Board approval of the nomination of the candidate or the election of such candidate to fill a vacancy on the Board. Existing directors who are being considered for re-nomination will be re-evaluated by the Nominating Committee based on each director’s satisfaction of the qualifications described above and his or her performance as a director during the preceding year. All candidates submitted by stockholders will be evaluated in the same manner as candidates recommended from other sources, provided that the procedures set forth above have been followed. All of the current nominees for director are current members of the Board. Based on the Nominating Committee’s evaluation of each nominee’s satisfaction of the qualifications described above, the Nominating Committee determined to recommend the three directors for re-election. The Nominating Committee has not received any nominations from stockholders for the Annual Meeting. Corporate Governance Policies We have adopted the Neenah, Inc. Corporate Governance Policies that guide the Company and the Board on matters of corporate governance, including director responsibilities, Board committees and their charters, director independence, director qualifications, director evaluations, director orientation and education, director access to management, Board access to independent advisors, and management development and succession planning. Copies of the Corporate Governance Policies are available on our website at www.neenah.com. Code of Business Conduct and Ethics We have adopted the Neenah, Inc. Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees. The Code of Business Conduct and Ethics meets the requirements of a ‘‘code of ethics’’ as defined by SEC rules and regulations. The Code of Business Conduct and Ethics also meets the requirements of a code of conduct under NYSE listing standards. The Code of Business Conduct and Ethics is available on our website at www.neenah.com. Risk Oversight The Board participates in risk oversight through the Company’s Enterprise Risk Evaluation conducted by our Chief Financial Officer and General Counsel, in conjunction with the Company’s senior management team. Annual findings are reported to the Audit Committee pursuant to the requirements of its charter and the full Board reviews an annual report of the findings as required by our Corporate Governance Policies. Communications with the Board of Directors We have established a process for interested parties to communicate with members of the Board, including non-management members of the Board. If you have any concern, question or complaint regarding any accounting, auditing or internal controls matter, or any issue with regard to our Code of Business Conduct and Ethics or other matters that you wish to communicate to our Board or non- management directors, send these matters in writing to c/o General Counsel, Neenah, Inc., Preston Ridge III, 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005. Information about our Board communications policy and procedures for processing Board communications for all interested 17 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DI44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DI44001A.;6 mrll_1116.fmt Free: 3650DM/0D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 17545 parties can be found on our website at www.neenah.com under the link ‘‘Investor Relations—Corporate Governance—Board of Directors—Board Communications Policy.’’ Approval of Related Party Transactions The charter of the Audit Committee requires that the Audit Committee review and approve any transactions that would require disclosure under SEC rules and regulations. To help identify related party transactions and relationships, each director and named executive officer, as such term is used is ‘‘Additional Executive Compensation Information—Summary Compensation Table,’’ completes a questionnaire on an annual basis that requires the disclosure of any transaction or relationships that the person, or any member of his or her immediate family, has or will have with the Company. Additionally, the Company’s Code of Business Conduct and Ethics prohibits related party transactions and requires that any employee with knowledge of such a transaction provide written notice of the relationship or transaction to the Company’s General Counsel. Neither Neenah nor the Board is aware of any matter in 2017 that required the review and approval of the Audit Committee in accordance with the terms of the charter. Shareholder Rights Plan The Company’s stockholder Rights Agreement expired on November 30, 2014. The Company has decided at this time to not put a new plan in place. We will evaluate the need for such a plan in the future as such need may arise. 18 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DI44001A.;6 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DK44001A.;10 mrll_1116.fmt Free: 1130D*/1840D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 13651 2017 DIRECTOR COMPENSATION The Compensation Committee has responsibility for evaluating and making recommendations to the Board of Directors regarding compensation for our nonemployee directors. Each of our directors who are not employees receives the following compensation: Item Amount Annual cash retainer . . . . . . . . . . . . . . . . . . $60,000 Additional cash retainers for Committee and Board Chairs: (cid:127) Board Chairman . . . . . . . . . . . . . . . . (cid:127) Audit Committee Chairman . . . . . . . . (cid:127) Compensation Committee Chairman . . (cid:127) Nominating Committee Chairman . . . . Additional cash retainers for Committee Members: (cid:127) Audit Committee . . . . . . . . . . . . . . . . (cid:127) Compensation Committee Chairman . . (cid:127) Nominating Committee Chairman . . . . Annual value of equity grant . . . . . . . . . . . . . $40,000 $30,000 $30,000 $17,500 $9,000 $7,000 $5,000 $100,000 (100% restricted stock units) P r o x y Neenah’s director compensation program is intended to align with market level compensation to attract, motivate, and retain high-performing and diverse quality director talent. Neenah bi-annually conducts a director pay study to ensure alignment with market level compensation, the latest of which was undertaken in 2017 and resulted in an adjustment to better align with the market and evolving director work load as shown in the table above. In 2017 the directors each received a total of 1,318 RSUs. The number of RSUs granted to nonemployee directors is calculated annually by dividing the total value of the equity grant by the grant date fair value of the Company’s stock on the day of the grant. in the same manner as used to calculate grants for Company employees under the Long-Term Compensation Plan (‘‘LTCP’’). The RSUs become fully vested and convert to shares of our common stock on the first anniversary of the date of grant. Employee directors receive no additional compensation and no perquisites for serving on our Board. Neenah also established the Neenah Paper Directors’ Deferred Compensation Plan (the ‘‘Directors’ Plan’’), which enables each of our nonemployee directors to defer a portion of their cash compensation and RSU awards. In 2017 Mr. McGovern participated in the Director’s Plan. Each of our nonemployee directors is required to own Company stock equal to four times their annual cash retainer. The valuation of restricted stock and options owned by our directors is calculated pursuant to the same guidelines detailed in this Proxy Statement for our named executive officers. All of our nonemployee directors met or exceeded the guidelines as of December 31, 2017. 19 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DK44001A.;10 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]DK44001A.;10 mrll_1116.fmt Free: 3910DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 23329 The following table shows the total compensation paid to each of our nonemployee directors in 2017. Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Sean T. Erwin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . William M. Cook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Margaret S. Dano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Timothy S. Lucas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John F. McGovern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philip C. Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stephen M. Wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,500 64,250 66,000 85,500 79,750 67,000 93,500 99,970 99,970 99,970 99,970 99,970 99,970 99,970 Total ($) 187,470 164,220 165,970 185,470 179,720 166,970 193,470 (1) Amounts reported in this column represent the grant date fair value of the 2017 RSU award granted to each director, calculated in accordance with Financial Accounting Standards Board Statement ASC Topic 718 (‘‘ASC 718’’). Due to restrictions imposed by Canadian law, Mr. Moore is not able to receive a quarterly cash dividend on his RSUs. In lieu of receiving such dividends, Mr. Moore is granted additional RSUs on the date of each dividend payment and in value to the cash dividend that he would have received. Mr. Moore received 22 of these RSUs in 2017. 20 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DK44001A.;10 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DM44001A.;15 mrll_1116.fmt Free: 320DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 62994 EXECUTIVE COMPENSATION Compensation Discussion and Analysis The following section presents an analysis, summary and overview of our compensation policies and programs, including material decisions made under those policies and programs in setting the compensation levels for 2017 for our ‘‘named executive officers’’ (‘‘NEO’’). Decisions made concerning the total compensation package for our executives take into consideration the individual executive’s level of responsibility within Neenah, the performance of Neenah relative to internal targets and peer companies, and the creation of long term shareholder value. We strive to achieve a balanced and competitive compensation package through a mix of base salary, performance-based cash bonuses, long-term equity based incentives and awards, deferred compensation plans, pension plans and welfare benefits. Compensation Objectives and Philosophy Neenah’s compensation policies are designed to incorporate the following attributes: Included Excluded P r o x y Significant component of pay based on performance achievement; more senior positions have a higher percentage of performance-based pay. Maximum payment limit on incentive plans Measures are based on achievement of financial targets, attainment of strategic objectives and enhancement of stockholder value, with a clawback policy Policies validated through independent consultant reporting to Compensation Committee, comparison to independent peer companies and stockholder ‘‘say on pay’’ votes Competitive mix of short term and long term performance performance-based incentives Guaranteed variable compensation and/or open ended payments Single trigger change-in-control arrangements Re-pricing or cash buyout of underwater stock appreciation rights without shareholder approval Market timing of equity awards Strict insider trading policy Excise tax gross-ups Following this section under the heading ‘‘Additional Executive Compensation Information’’ we have included certain tables where you will find detailed compensation information for the named executive officers. This section is intended to provide additional details regarding Neenah’s compensation practices, as well as the information and process used to create and implement our compensation program for our named and other executive officers. Named Executive Officers (cid:127) John P. O’Donnell, President and Chief Executive Officer (cid:127) Bonnie C. Lind, Senior Vice President, Chief Financial Officer and Treasurer (cid:127) Steven S. Heinrichs, Senior Vice President, General Counsel and Secretary (cid:127) Julie A. Schertell, Senior Vice President, President Fine Paper & Packaging (cid:127) Matthew L Duncan, Senior Vice President, Chief Human Resources Officer 21 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DM44001A.;15 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DM44001A.;15 mrll_1116.fmt Free: 110D*/240D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 7569 2017 Key Strategic and Financial Achievements (cid:127) Delivered record sales in each of our businesses. (cid:127) Consolidated net sales of $980 million increased 4% versus 2016 (cid:127) Technical Products sales of $502 million, increased 8% (cid:127) Fine Paper & Packaging sales of $455 million, increased 1% (cid:127) Double-digit growth in targeted categories of premium packaging, synthetic filtration and performance labels (cid:127) Strategic initiatives to drive future growth (cid:127) Started up a world-class transportation filtration operation in the U.S. to meet growing global demand for our products after consumming our existing capacity in Europe (cid:127) Purchased a small U.S. laminating operation to support premium packaging growth with demand for our paper gift cards as an environmentally-preferred choice versus plastic (cid:127) Acquired Coldenhove, a Netherlands-based leader in digital transfer media, to complement our existing business and provide scale and additional capabilities in this growing market (cid:127) Deployed cash in a disciplined fashion to maintain a double-digit Return on Capital and provide attractive direct returns of cash to shareholders (cid:127) Free cash flow increased from $47 to $57 million, with reduced capital spending for the U.S. filtration investment (cid:127) Return on Invested Capital was maintained at a double digit level, though down from the prior year due to costs for the start-up of the new U.S. filtration operation (cid:127) Credit ratings and metrics remained strong, with ample borrowing capacity providing flexibility to pursue attractive opportunities (cid:127) Cash returned to shareholders was $34 million, including a 12 percent increase in dividends (cid:127) Total shareholder return ahead of Russell 2000 for 9th consecutive year (cid:127) Total shareholder return of 8.3% compared to 7.8% for the Russell 2000 Value Index. Our Compensation-Setting Process Role of Compensation Committee The Compensation Committee is responsible for carrying out the Board’s responsibilities for determining the compensation for our named executive officers. In that capacity, the Compensation Committee (1) annually reviews and approves the corporate goals and objectives relating to our executive compensation programs; (2) evaluates performance against those goals and objectives; and (3) approves the compensation payable to our named executive officers. The Role of Shareholder Say-on-Pay Votes The Company provides its shareholders with the opportunity to cast an annual advisory vote on executive compensation (a ‘‘say-on-pay proposal’’). At the Company’s annual meeting of shareholders held on May 23, 2017, greater than 96% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Compensation Committee considered these results and believes the voting results reflect strong shareholder support for the Company’s approach to executive compensation. The Compensation Committee will continue to consider the outcome of the Company’s 22 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DM44001A.;15 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DM44001A.;15 mrll_1116.fmt Free: 1910D*/2100D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 3623 say-on-pay votes in order to understand the environment of future compensation decisions for the named executive officers. Use of Compensation Consultants The Compensation Committee charter grants the Compensation Committee authority to independently retain compensation consultants, and in 2017 the Compensation Committee again engaged Hugessen Consulting Inc. (‘‘Hugessen’’) to provide it with independent advice and assistance in its deliberations regarding compensation matters. At the Committee’s request, Hugessen originated certain analyses, reviewed the information provided by management and assisted the Compensation Committee in assessing 2017 compensation for Neenah’s named executive officers. In addition, Hugessen provided input to assist the Compensation Committee in establishing the 2017 targeted compensation levels and performance criteria under the Company’s incentive plans. The Compensation Committee must pre-approve any additional work of a material nature assigned to its consultant and will not approve any such work that, in its view, could compromise Hugessen’s independence as advisor to the Committee. Hugessen does not provide any other services to Neenah. Decisions made by the Compensation Committee are the responsibility of the Committee and reflect factors and considerations in addition to the information and recommendations provided by Hugessen. P r o x y In 2017, the Compensation Committee, in accordance with SEC rules, considered the independence factors having to do with consultant conflicts of interest and determined that the work of Hugessen did not raise any conflicts of interest. In addition, in 2017 Neenah retained Aon Hewitt, Inc. (‘‘AON’’) to advise management on developments relating to executive compensation in general andprovide support to management and the Compensation Committee in their ongoing analysis and assessment of the effectiveness of Neenah’s compensation policies and programs. AON also assisted in the preparation and review of materials prepared by management related to benchmarking and plan designs. Role of Executive Officers At the request of the Compensation Committee, our President and Chief Executive Officer, along with our Senior Vice President and Chief Human Resources Officer, make recommendations to our Compensation Committee regarding base salary and target levels for our annual performance bonuses and long-term equity compensation for our executive officers. Mr. O’Donnell is not involved in setting or approving his own compensation levels. These recommendations are based on the philosophy and analysis described in this Compensation Discussion and Analysis section of this Proxy Statement. 23 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DM44001A.;15 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DM44001A.;15 mrll_1116.fmt Free: 110D /240D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 17607 Peer Comparison To assist in evaluating and determining levels of compensation in 2017 for each element of pay, the Compensation Committee reviewed various sources of data prepared by management including: (cid:127) Proxy data collected and analyzed from a peer group of companies in the paper, packaging, and performance materials and specialty chemical industries similar in size to Neenah (the ‘‘Peer Group’’). In 2017 the Peer Group consisted of the following companies: —Clearwater Paper Corporation —P.H. Glatfelter Company —Innophos Holdings Inc. —Quaker Chemical Corp —Innospec, Inc. —Rayonier Advanced Materials Inc. —Kraton Corporation —Schweitzer-Mauduit International, Inc. —Mercer International, Inc. —Tredegar Corporation —Omnova Solutions, Inc. (cid:127) The only Peer Group change was the elimination of AEP Industries during 2017 due to the company being acquired. (cid:127) Data collected from Aon’s database using a broad industry cut of manufacturing companies with revenues between $500 million and $2.0 billion. To develop market figures, compensation opportunities for the named executive officers were compared to the compensation opportunities for similarly situated executives in comparable positions. Hugessen reviewed the results of these analyses and provided feedback to the Compensation Committee in connection with their review of competitive pay practices. Neenah’s management and the Compensation Committee do not believe that it is appropriate to establish compensation levels based solely on peer comparisons or benchmarking; however, marketplace information is one of the many factors that we consider in assessing the reasonableness of compensation. Management and the Compensation Committee believe that information regarding pay practices at other companies is useful to confirm that our compensation practices are competitive in the marketplace. Targeted Compensation Levels The Compensation Committee establishes targeted total compensation levels based upon performance objectives for our executive officers eligible to receive an annual cash bonus opportunity under the Management Incentive Plan (‘‘MIP’’) and the equity awards under the Long-Term Compensation Plan (‘‘LTCP’’) as authorized by the Amended and Restated Neenah Paper, Inc. 2004 Omnibus Stock and Incentive Compensation Plan (the ‘‘2004 Omnibus Plan’’), and if approved, the Amended and Restated Neenah, Inc. 2018 Omnibus Stock and Incentive Compensation Plan (the ‘‘2018 Omnibus Plan’’). In making these determinations, our Compensation Committee is guided by the compensation philosophy described below. Our Compensation Committee also considers historical compensation levels, pay practices at companies in the Peer Group and the relative compensation among Neenah’s senior executive officers. The Compensation Committee also considers industry conditions, corporate performance versus peer companies and the overall effectiveness of Neenah’s compensation program in achieving desired performance levels. As targeted total compensation levels are determined, our Compensation Committee also determines the portion of total compensation that will be contingent, performance-based pay. Performance-based pay includes cash awards under our MIP program and equity awards under our 24 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DM44001A.;15 v6.8  MERRILL CORPORATION JTAYLORA// 3-APR-18 09:59 DISK126:[18ZAG1.18ZAG44001]DM44001A.;15 mrll_1116.fmt Free: 500DM/0D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 12575 LTCP, which may be earned based on the Company’s achievement of performance goals and whose value depends upon long-term appreciation in stock price. Neenah’s compensation philosophy is intended to provide competitive pay within the relevant market by targeting the total compensation opportunities and to reward the executives for short term and long term performance through an overall compensation mix that is targeted to include a minimum of 50% performance-based compensation for named executive officers. Our Chief Executive Officer’s compensation in 2017 was approximately 74% performance-based at target levels and our other NEOs compensation was approximately 56% performance-based at target. CEO @ Target Other NEOs @ Target Perf.- Equity 51% Base Salary 26% Perf.- Cash 23% Base Salary 44% Perf.- Equity 32% Perf.- Cash 24% P r o x y 24MAR201813170338 24MAR201813170471 Compensation Components Our executive compensation includes the base components described below, each of which is designed to accomplish specific goals of our compensation philosophy described above. In connection with our discussion of each of such base components, the following questions will be addressed: (cid:127) Why Neenah chooses to pay each of the base components; (cid:127) How Neenah determines the amount of the various base components; (cid:127) How each component fits into Neenah’s overall compensation plan and supports Neenah’s compensation philosophy. Base Salary Base salary is a critical element of executive compensation because it provides our executives with a defined level of monthly income and also sets the base level for performance compensation. Individual base salaries for our named executive officers are generally reviewed by comparing total compensation opportunities within the Peer Group as discussed above. Salary increases, if any, are reviewed and approved by the Compensation Committee on an annual basis. Factors considered in base salary increases include the Company’s performance over the past year, changes in individual executive responsibility and the position of base salary together with all other compensation as indicated by our analysis of the Peer Group and market data provided by Aon when peer data was not available. This approach to base salary supports our compensation philosophy. The Compensation Committee has determined that setting NEO base salaries in this manner allows Neenah to be competitive in attracting and retaining talent, while at the same time, aligning the executive’s and stockholders’ interest because a majority of the executive’s overall compensation is performance based.. 25 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DM44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 30D*/120D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 21362 2017 Base Salary Decisions After discussing the individual performance, experience, scope of responsibilities, and Mr. O’Donnell’s recommendations for the other NEOs, the Compensation Committee established the base salaries for each NEO in January of 2017. In general, any increases in base pay are intended to be competitive with the market and take into consideration the individual performance and scope of responsibilities of each NEO. Taking into account all these factors and a comparison relative to peers the Committee approved the adjustments shown below to further align NEO base salary with the market. The following table provides the base salary received by each named executive officer for 2017. 2016 Base Salary 2017 Base Salary % Increase O’Donnell . . . . . . . . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . . . . . . . . $750,000 $370,000 $330,000 $360,000 $280,000 $830,000 $410,000 $365,000 $400,000 $280,000 11% 11% 11% 11% 0% Annual Performance Bonuses Annual cash incentive bonus opportunities are awarded under the MIP, and are based on our achievement of performance goals established in the beginning of each calendar year. MIP target bonuses are established as a percentage of base salary with a target bonus ranging from 50% to 90% for NEOs. The Compensation Committee annually approves the target bonus range based on data provided from the market surveys as previously described and based on the experience and knowledge of the executive and the quality and effectiveness of their leadership within Neenah as determined by the Compensation Committee. The amount of the actual MIP bonus is adjusted up or down from the target bonus based on Neenah’s year-end results (as measured by the objective and subjective criteria set forth in the MIP plan for the applicable year, as previously approved by the Compensation Committee). Actual MIP payments can range from 0-200% of the target bonus for our chief executive, legal, operations and financial officers, and 0-250% for the business unit leaders, depending on whether the results fall short of, achieve or exceed the identified performance goals. Under the MIP, the Compensation Committee generally sets a range of possible payments from zero to a maximum percentage of the target award based on its belief that no bonus should be earned if performance is below established thresholds and its determination that the top end of the range should provide an appropriate incentive for management to achieve exceptional performance. Under the MIP, specific performance measures and thresholds are determined by the Compensation Committee in consultation with Mr. O’Donnell, based on key metrics that support the achievement of Neenah’s short-term and long-term strategic objectives. Annual performance bonuses support our compensation philosophy in that they: (i) reward Neenah’s executives for meeting and exceeding goals that contribute to Neenah’s short-term and long-term strategic plan and growth; (ii) promote a performance-based work environment; and (iii) serve as a material financial incentive to attract and retain executive talent. 2017 Annual Performance Bonus Awards For 2017, the Compensation Committee approved target bonuses for our named executive officers as a percentage of base salary with a target bonus ranging from 50% to 90%. The performance goals for the 2017 MIP program were set based on the following performance criteria and the relative weighting set forth below: (i) adjusted corporate earnings before interest, income taxes, depreciation and amortization (‘‘Corporate EBITDA’’), which is calculated as net income plus income tax expenses, 26 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 18417 P r o x y plus depreciation expense and amortization expense for intangibles, plus amortization expense for stock options and restricted stock units adjusted for any one time events outside of the ordinary course of business and (ii) business unit earnings before interest and taxes (‘‘EBIT’’) for our Fine Paper & Packaging business unit, and (iii) progress achieved in implementing the Company’s strategic plan: 2017 TARGET MIP (% of Base Salary) Corporate EBITDA Business Unit EBIT Strategic Initiatives Performance Criteria O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90% 60% 50% 55% 50% 75% 75% 75% 25% 75% — — — 50% — 25% 25% 25% 25% 25% Each goal was set at levels that both the Compensation Committee and management believed to be challenging but attainable, and achievements would reflect significant performance by the Company. On a stand-alone basis, Corporate EBITDA could have yielded a payout from 0% at threshold, 100% at target and 200% at outstanding, and business unit EBIT could have yielded a payout from 0% at threshold, 100% at target and 300% at maximum, based on year-end results. These targets are consistent with our desire to incentivize and reward significant growth in profits. The strategic plan objective was paid out at 100% of target reflecting performance in achieving a set of strategic objectives considered critical for long-term growth. Results included the successful start up of a major organic capital project to add filtration capacity in the US, the acquisition of (a) the Coldenhove in the Netherlands to support growth in our Performance Materials business and (b) the acquisition of a laminating asset in the U.S. to support our Fine Paper & Packaging business, organic growth achieved in targeted categories, and other strategic initiatives. The performance goals and results relative to the named executive officers for each of the financial metrics in 2017 were as follows: Metric ($MM) Threshold (0%) Target (100%) Outstanding Maximum (200%) (300%) 2017 Results Payout % Corporate EBITDA . . . . . . . . . . . . . Fine Paper & Packaging EBIT . . . . . . 132 62 158 73 170 79 N/A 84 145 70 51% 71% Based on the process described above, MIP payments were awarded as follows: 2017 MIP at Target 2017 MIP at Actual % of Target Earned O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $747,000 $246,000 $182,500 $220,000 $140,000 $472,478 $155,595 $115,431 $161,150 $ 88,550 63% 63% 63% 73% 63% Long-Term Equity Compensation Long-term equity incentives under the LTCP consist of performance share units and stock appreciation rights (‘‘SARs’’) granted on an annual basis, with stock appreciation rights representing approximately 30% of the total value of the equity incentive awards and performance shares representing approximately 70% of the total value of the equity award granted to an executive officer for that year. This reflects the Company’s desire to emphasize the performance based incentives in the LTCP. The total target LTCP grants are set at the beginning of the year for each named executive 27 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 43492 officer at a minimum of 60% of the executive’s base salary. The Company typically grants 100% of the SARs in conjunction with the first Board meeting of each fiscal year. Each year the Compensation Committee reviews and approves a target number of performance share units for each of our named executive officers and each other participant in the LTCP plan. The number of units actually earned by each participant is determined by the Company’s corporate performance. The range of possible awards is set by the Compensation Committee based on its: (i) belief that a minimal award shall be granted if the performance measures are significantly below target levels; and (ii) determination that the top end of the range provided an appropriate incentive for management to achieve exceptional performance. The combination of SARs and performance share units focuses our executives on Neenah’s financial performance and increasing shareholder value. It is aligned with and supports our stock ownership policy. Long-term incentives also help retain employees during the performance periods. 2017 LTCP Awards For 2017, the Compensation Committee, consistent with our compensation philosophy, approved equity grants under the LTCP for our named executive officers with target values ranging from 60% to 200% of base salary pay as follows: 2017 LTCP (% of base Salary) O’Donnell . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . 200% 80% 80% 70% 60% For each of our named executive officers, the value was divided into awards of SARs and a target number of performance share units, with 70% of the value in performance share units and 30% of the value in SARs. The range of possible awards under the LTCP was selected to tie a substantial percentage of their compensation to Neenah’s performance. The number of SARs to be awarded to each named executive officer in 2017 was determined by dividing the value of the portion of the LTCP award to be awarded as SARs (determined by the Compensation Committee as described above) by the fair value of one stock option (determined using a modified Black-Scholes formula), and then rounded to the nearest share to produce the number of shares subject to the applicable option award. Each grant of SARs made in 2017 vests in increments of 33.34%, 33.33% and 33.33% over a three year period, with vesting occurring on each anniversary of the applicable grant and a ten year term to exercise. The process described above resulted in grants of SARs in 2017 as follows: O’Donnell . . . . . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . . . . . . 2017 SARs 36,753 7,262 7,085 5,657 3,720 In 2017 the Compensation Committee approved an amendment to the performance share portion of the LTCP program to incorporate a three year performance period for a portion of the incentive. Twenty Five percent of the total award is measured over a three year period, further aligning senior management of the Company with long term shareholder interests. The remaining seventy five percent of the award retains a one-year performance period to focus on and reward annual growth in sales, 28 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 410D*/980D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 12838 P r o x y earnings per share and return on invested capital. The target number of performance share units to be awarded to each named executive officer in 2017 was determined by determining the value of the portion of the LTCP award to be awarded as performance share units (determined by the Compensation Committee as described above) using fair market value of the stock price as of the date of grant, and then rounded to the nearest ten shares. The target number of performance share units are increased or decreased (to an amount equal to between 40% to 200% of the target number) after the performance period for each component. The first component (‘‘Component I’’), representing 75% of the award, is subject to a one-year performance period. The units are then subject to a two year holding period. After the end of the performance period, the adjustment of the target number of shares will are calculated based on the Company’s achievement of performance goals relative to the following equally weighted criteria: adjusted year over year growth in sales (constant currency)(‘‘Constant Currency Sales’’), adjusted year over year growth in return on invested capita (‘‘Return on Capital’’), and adjusted year over year growth in earnings per share (‘‘Earnings Per Share’’). The earnings per share metric was added by the Company in 2017 to strengthen alignment with long-term stockholder value. Each of the metrics are adjusted for certain items as further described in the performance share award agreements for the grant filed by the Company as Exhibit 10.1 to the Form 8-K filing dated February 3, 2017. The threshold, target and outstanding levels for sales growth and return on capital were adjusted in 2017 to reflect the Company’s continued plans for growth through strategic acquisitions and investments in organic growth. The specific targets and results in 2017 for the first component were as follows: Metric Threshold Payout (as a % of Target) . 40% Target 100% Outstanding 2017 Results Payout % 200% Return on Capital . . . . . . Increase of (60) basis points Increase of Increase of Increase of 188% (25) basis points 10 basis points 6 basis points Constant Currency Sales . . 3% growth 6% growth 9% growth Earnings Per Share . . . . . 3% growth 7% growth 11% growth Overall Payout Percentage 3.7% 7.5% 23 % 113% 108% Based on the process described above and our performance against the targets noted, performance share unit (‘‘PSU’’) grants for the first component were awarded as follows: Component I at Target O’Donnell . . . . . . . . . . . . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,609 2,096 1,633 2,045 1,074 Component I % of Target Earned 11,458 2,264 1,764 2,209 1,160 Earned 108% 108% 108% 108% 108% The earned shares are now in a two year hold period and are still subject to forfeiture based on continued employment. All shares are scheduled to be released to active participants on December 31, 2019. The second component (‘‘Component II’’), representing 25% of the award, is subject to a three year performance period. After the end of the performance period, the adjustment of the target number of shares is calculated based on the Company’s achievement of the performance goal of 29 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 30D*/120D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 469 relative total shareholder return (‘‘Relative TSR’’). The Relative TSR (including dividend yield), is compared against the Russell 2000 Value Index over the performance period. Metric Threshold Target Outstanding Payout % Payout (as a % of Target) . . . . . . . . . . . . . . . . . Total Shareholder Return . . . . . . . . . . . . . . . . . 40% 3rd Quartile 100% 2nd Quartile 200% 1st Quartile TBD* * Subject to a 3 year performance period ending December 31, 2019 Retirement Benefits We maintain the Neenah 401(k) Retirement Plan (the ‘‘401(k) Plan’’), which is a tax-qualified defined contribution plan for employees. The 401(k) Plan is available to all Neenah’s U.S. employees, but includes a special company profit-sharing contribution feature that is only applicable for certain employees who are ineligible to participate in the Pension Plan. Further, we maintain a supplemental retirement contribution plan (the ‘‘Supplemental RCP’’) which is a non-qualified defined contribution plan which is intended to provide a tax-deferred retirement savings alternative for amounts exceeding Internal Revenue Code limitations on qualified plans. Additional information regarding the Supplemental RCP can be found in the 2017 Nonqualified Deferred Compensation table later in this Proxy Statement. We also maintain the Deferred Compensation Plan, which is a non-qualified deferred compensation plan for our executive officers. The Deferred Compensation Plan enables our executive officers to defer a portion of annual cash compensation (base salary and non-equity awards under our MIP). This plan is intended to assist our executive officers in maximizing the value of the compensation they receive from the Company and assist in their retention. Additional information regarding the Deferred Compensation Plan can be found in the 2017 Nonqualified Deferred Compensation table later in this Proxy Statement. We also maintain the Neenah Pension Plan, a tax-qualified defined benefit plan (the ‘‘Pension Plan’’) and the Neenah Supplemental Pension Plan, a non-qualified defined benefit plan (the ‘‘Supplemental Pension Plan’’) which provide tax-deferred retirement benefits for certain of our employees, including Ms. Lind, who were employed prior to December 31, 1996. Messrs. O’Donnell, Heinrichs, Duncan and Ms. Schertell do not participate in these plans. Additional information regarding the Pension Plan and the Supplemental Pension Plan can be found in the 2017 Pension Benefits table later in this Proxy Statement. Neenah and the Compensation Committee believe that the Pension Plan, Supplemental Pension Plan, Retirement Contribution Plan, Supplemental RCP, Deferred Compensation Plan and 401(k) Plan are core components of our compensation program. The plans are competitive with plans maintained by our peer companies and are necessary to attract and retain top level executive talent. Additionally, the plans support the long-term retention of key executives by providing a strong incentive for the executive to remain with Neenah over an extended number of years. Severance Payments The Neenah Executive Severance Plan (the ‘‘Executive Severance Plan’’) covers designated officers, including all of our named executive officers, and provides certain severance benefits upon termination of employment following a change in control of Neenah. Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ (as defined in the Executive Severance Plan) within the two-year period following a change in control or a termination by us without ‘‘cause’’ during the one-year period preceding such a change in control, the Executive Severance Plan as in effect as of December 31, 2017 provided that the officer would be entitled to a cash payment equal to the sum of: (i) two times the sum of his annual base salary and targeted annual bonus; (ii) any qualified retirement plan benefits forfeited as a result of such termination; (iii) the 30 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 6 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 12835 P r o x y amount of retirement benefits such officer would have received under the qualified and supplemental retirement plans but for his or her termination for the two-year period following his or her termination; (iv) the cost of medical and dental COBRA premiums for a period of two years; and (v) a cash settlement of any accrued retiree welfare benefits. In addition, the officer will be eligible to receive outplacement services for a period of two years (up to a maximum cost to us of $50,000). In March 2017, the Compensation Committee amended the Executive Severance Plan (the ‘‘2017 Executive Severance Plan’’), effective April 1, 2017, to provide named officers certain severance benefits both upon termination of employment following a change in control of Neenah and outside of a change in control. The 2017 revisions also categorize the participating officers as either ‘‘Tier 1,’’ ‘‘Tier 2’’ or ‘‘Tier 3’’ participants in order to provide varying benefit amounts to the different officers. All NEOs are Tier 1 participants. Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ (as defined in the 2017 Executive Severance Plan) outside of a change in control of Neenah each NEO will be entitled to an amount equal to one and one-half times his or her base salary. Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ within the two-year period following a change in control, the 2017 Executive Severance Plan provides that each NEO will be entitled to the sum of (i) two times the sum of his or her annual base salary, (ii) the amount of bonus under Neenah’s Management Incentive Plan that he or she has earned through the date of the change in control plus two times his or her targeted annual bonus; (iii) any profit-sharing contributions or pension plan benefits forfeited as a result of such termination; (iv) the amount of profit-sharing contributions and pension plan benefits such participant would have received under the qualified and supplemental retirement plans but for his or her termination for the two-year period following his or her termination; and (v) the cost of medical and dental COBRA premiums for a period of two years. In addition, each NEOs will be fully vested in his or her account under the Deferred Compensation Plan and any awards granted to him or her under the Omnibus Plan. In addition, upon termination of an NEO’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ the NEO will be eligible to receive reimbursement for outplacement service costs for a period of two years for an amount not to exceed $50,000. Payment of the benefits under the Executive Severance Plan is subject to the applicable executive executing an agreement that includes restrictive covenants and a general release of claims against us. These benefits are intended to recruit and retain key executives and provide continuity in Neenah’s management in the event of a change in control. We believe the Executive Severance Plan is consistent with similar plans maintained by our peer companies and therefore is a core component of our compensation program necessary to attract and retain key executives. Timing of Compensation Base salary adjustments, if any, are made by our Compensation Committee at the first meeting of each fiscal year (with the adjustments effective as of January 1 of that same year). Stock option grants and performance share unit target levels and awards are made in the manner described above. We do not coordinate the timing of equity awards with the release of non-public information. The exercise price of the stock options is established at the fair market value of the closing price of our stock on the date of the grant. Tax and Accounting Consideration In general, the tax and accounting treatment of compensation for our named executive officers has not been a core component used in setting compensation. In limited circumstances we do consider such treatment and attempt to balance the cost to Neenah against the overall goals we intend to achieve 31 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 10D*/120D Foot: 0D/ 0D VJ RSeq: 7 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 16156 through our compensation philosophy. In particular, we have historically sought to maximize deductibility of our named executive officers’ compensation under Code Section 162(m) while maintaining the flexibility necessary to appropriately compensate our executives based on performance and the existing competitive environment. The MIP and LTCP programs are performance based and have historically been intended to be fully deductible under Code Section 162(m). The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Despite our efforts in the past to structure annual cash incentives in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) in fact will. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with our business needs. Stock Ownership Guidelines The Compensation Committee has adopted stock ownership guidelines to foster long-term stock holdings by company leadership. These guidelines create a strong link between stockholders’ and management’s interests. Named executive officers are required to own a designated multiple of their respective annual salaries. The multiples are as follow: Stock Ownership Multiple of Salary O’Donnell . . . . . . . . . . . . . . . . Lind . . . . . . . . . . . . . . . . . . . . Heinrichs . . . . . . . . . . . . . . . . Schertell . . . . . . . . . . . . . . . . . Duncan . . . . . . . . . . . . . . . . . 6x 4x 4x 4x 4x Each of the named executive officers is required to hold at least 50% of their annual performance share grants until they reach the ownership guidelines. The following holdings are counted toward fulfilling guidelines, with each being valued using our stock price as of December 31 of each year; (i) stock held in the 401(k) plan, other deferral plans, outright or in brokerage accounts; (ii) performance share units or restricted stock units earned but not vested or not paid out; and (iii) ‘in the money’ value of vested or unvested stock options and SARs. Penalties for continued failure to meet the guidelines include payment of MIP compensation in Neenah stock and reduction of LTCP compensation. All of our named executive officers met or exceeded the guidelines as of December 31, 2017. Mr. Duncan was hired by the Company in 2016 and has five years in order to meet the stock ownership requirements. CEO Pay Ratio Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, the Company is required to provide the ratio of the annual total compensation of Mr. O’Donnell to the annual total pay of the median employee of the Company (the ‘‘Pay Ratio Disclosure’’). For 2017 Neenah’s median compensation of all employees of the Company and its consolidated subsidiaries (other than Mr. O’Donnell), including employees located in the United 32 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 1670DM/0D Foot: 0D/ 0D VJ RSeq: 8 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 10808 States, Germany and England, was $67,493. Mr. O’Donnell’s total compensation in 2017 for purposes of the Pay Ratio Disclosure was $3,288,608. Based on this information, for 2017, the ratio of the compensation of the Chief Executive Officer to the median annual total compensation of all other employees was estimated to be 49 to 1. The pay ratio disclosed above was calculated in accordance with SEC rules based upon the Company’s reasonable judgement and assumptions using the methodology described below. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by the Company in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies may not be comparable to the Company’s pay ratio as disclosed above. The Company’s methodology for calculating the ratio included the following: (cid:127) Reviewed total annual cash earnings of all employees on October 1, 2017, for our 2017 fiscal year. This included both base pay and any overtime/premium pay earned by each employee in 2017. (cid:127) Permanent employee hours were annualized if they didn’t work full year (i.e. someone working a 20 hour workweek would be annualized at 1040 hours a year, and someone full time would be annualized at 2080 hours a year). (cid:127) We identified the median employee based on total annualized earnings, and then captured all pay components based on summary compensation table to compare to the CEO. (cid:127) Currency used to convert pay was determined as of December 31, 2017, at 1.19786 USD to 1 EUR, and 1.34912 USD to 1 GBP. Clawback Policy The Compensation Committee adopted a ‘‘clawback policy’’ for all executives and other employees participating in our MIP program concerning the future payment of MIP payments and long term equity grants under the LTCP program. This policy gives the Board the authority to reclaim certain overstated payments made to Neenah employees due to materially inaccurate results presented in the Company’s audited financial statements. Policies against Hedging and Pledging Securities Our insider trading policy provides that directors, officers and employees are prohibited from engaging in short sales and buying or selling puts or calls or other derivative securities of Neenah. Directors and officers are also prohibited from holding Neenah securities in a margin account or pledging Neenah securities as collateral for a loan. P r o x y 33 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE109869// 2-APR-18 14:12 DISK126:[18ZAG1.18ZAG44001]DO44001A.;15 mrll_1116.fmt Free: 4430DM/0D Foot: 0D/ 0D VJ RSeq: 9 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 41173 COMPENSATION COMMITTEE REPORT The Compensation Committee oversees Neenah’s compensation policies and programs on behalf of the Board. In fulfilling this responsibility, the Compensation Committee has reviewed and discussed with Neenah’s management the Compensation Discussion and Analysis included in this Proxy Statement. In reliance on such review and discussions, the Compensation Committee recommended to Neenah’s 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 year ended December 31, 2017. Compensation Committee: Stephen M. Wood, Chairman John F. McGovern Margaret S. Dano Timothy S. Lucas 34 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DO44001A.;15 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 250D*/300D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 12707 P r o x y ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 2) The Board of Directors unanimously recommends that the stockholders vote ‘‘FOR’’ the approval of the Company’s executive compensation. Section 14A of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’) requires that we include in this proxy statement a non-binding stockholder vote on our executive compensation as described in this proxy statement (commonly referred to as ‘‘Say-on-Pay’’). We encourage stockholders to review the Compensation Discussion and Analysis (‘‘CD&A’’) section of this proxy statement. Our executive compensation program has been designed to pay for performance and align our compensation programs with business strategies focused on long-term growth and creating value for stockholders while also paying competitively and focusing on total compensation. The Company’s executive compensation programs are designed to attract, motivate and retain highly qualified executive officers who are able to achieve corporate objectives and create stockholder value. The Compensation Committee believes the Company’s executive compensation programs reflect a strong pay-for-performance philosophy and are well aligned with the stockholders’ long-term interests without promoting excessive risk. We feel this design is evidenced by the following: (cid:127) A majority of our executives’ compensation is directly linked to our performance and the creation of stockholder value. The overall compensation mix is targeted to include at least 50% performance based compensation for the named executive officers with a higher percentage of our CEO’s compensation being performance based. In 2017, 74% of our CEO’s compensation was performance based at target levels. (cid:127) Our long-term incentive awards are exclusively in the form of performance share units, stock options and stock appreciation rights and all of our incentive plans have capped payouts. (cid:127) LTCP grants are split with 70% of the total value of the awards granted as performance share units with a three-year vesting and a combination of one-year and three-year performance periods, and 30% as stock appreciation rights with annual vesting over a three-year period. For our performance share units, we use objective performance metrics closely tied to financial performance and shareholder value, such as increasing return on invested capital, revenue and earnings per share growth, and relative total shareholder return. In 2017 component one of the grants, representing 75% of the total grant, were awarded at 108% of target based on achieved growth in sales, return on invested capital and earnings per share. Component two, representing 25% of the grant, using total shareholder return as the metric, is subject to a three year performance period. (cid:127) Our short-term incentive plan (MIP) also is based on a pay-for-performance philosophy, with target bonus opportunities ranging from 50% to 90% of base salary based on improvements in corporate and business unit profits and successful execution of strategic objectives. In 2017, executives received a payment of 63% to 73% of target as a result of performance in corporate EBITDA, business unit EBIT and the successful execution of strategic objectives. (cid:127) We have meaningful stock ownership requirements for our named executive officers. (cid:127) We do not have employment agreements or other individual arrangements with our named executive officers that provide for a specified term of employment, compensation terms or specific benefits upon a termination of employment. (cid:127) Benefits under our Executive Severance Plan in connection with a change-in-control are payable only on a double trigger basis (i.e., following both a change in control and a qualifying termination of employment). 35 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 3830DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 46485 (cid:127) The Compensation Committee is advised by an independent compensation consultant who keeps the Compensation Committee apprised of developments and best practices. (cid:127) The Company has a clawback policy which allows the Company to recoup awards if payment or vesting was based on financial criteria that are later deemed to be materially inaccurate. (cid:127) In 2017 the Compensation Committee amended the Executive Severance Plan to remove the excise tax gross up provision. The Board strongly endorses the Company’s executive compensation program and recommends that stockholders vote in favor of the following resolution: RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers as described in this proxy statement under ‘‘Executive Compensation’’, including the Compensation Discussion and Analysis and the tabular and narrative disclosure contained in this proxy statement. Because the vote is advisory, it will not be binding upon the Board of Directors or the Compensation Committee and neither the Board of Directors nor the Compensation Committee will be required to take any action as a result of the outcome of the vote on this proposal. The Compensation Committee will consider the outcome of the vote when considering future executive compensation arrangements. 36 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 570D*/840D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 47529 P r o x y APPROVAL OF THE NEENAH, INC. 2018 OMNIBUS STOCK AND INCENTIVE COMPENSATION PLAN (ITEM 3) The Board of Directors unanimously recommends that the stockholders vote ‘‘FOR’’ the approval of the Neenah, Inc. 2018 Omnibus Stock and Incentive Compensation Plan. The Neenah, Inc. 2018 Omnibus Stock and Incentive Compensation Plan (the ‘‘2018 Omnibus Plan’’) is a comprehensive incentive compensation plan that provides for various types of equity-based compensation, including incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, performance share units, and performance units, in addition to dividend equivalents rights and cash awards. The purpose of the 2018 Omnibus Plan is to encourage ownership in our common stock by those employees, directors and consultants who have contributed, or are determined to be in a position to contribute, materially to our success, thereby increasing their interest in our long-term success. We believe that incentive compensation grants have been an important part of our successful employee and independent director recruiting and retention efforts to date and we expect such grants will remain a key part of this process going into the future. The 2018 Omnibus Plan is an amendment and restatement of the Company’s 2004 Omnibus Stock and Incentive Compensation Plan, as amended and restated May 30, 2013 (the ‘‘2004 Omnibus Plan’’). In 2013, the Company’s shareholders approved an increase of 1,577,000 shares of our common stock to be reserved for issuance under the 2004 Omnibus Plan. As of the Record Date, there remains a total of only 471,889 shares reserved for issuance under the 2004 Omnibus Plan for future awards that have not yet been awarded. In addition, as of the Record Date there are 537,246 outstanding SARs issued under the 2004 Omnibus Plan, with a weighted average term of 7.16 years and a weighted average exercise price of $63.85. The number of shares of our common stock to be reserved for issuance for future awards under the 2018 Omnibus Plan is comprised of the 471,889 remaining shares under the 2004 Omnibus Plan as described above, plus an additional 800,000 shares of our common stock. In addition to the 2018 Omnibus Plan providing for the above-described number of shares of common stock available for future awards, the 2018 Omnibus Plan updates the 2004 Omnibus Plan to more appropriately reflect current market practices. Accordingly, our Compensation Committee has approved the 2018 Omnibus Plan to address our needs to be able to offer equity and cash incentives going forward, subject to shareholder approval of the 2018 Omnibus Plan. NYSE listing requirements require that we submit the 2018 Omnibus Plan to our shareholders for approval. In addition, Internal Revenue Code rules require that we obtain shareholder approval of the 2018 Omnibus Plan in order to be able to issue incentive stock options under the 2018 Omnibus Plan. The Board of Directors unanimously approved the 2018 Omnibus Plan on March 26, 2018, subject to shareholder approval. If the shareholders of the Company do not approve the 2018 Omnibus Plan, the plan will be void, any grants made under the plan (if any) will be void, and the 2004 Omnibus Plan will remain in full force and effect as prior to its amendment and restatement as the 2018 Omnibus Plan. If approved by stockholders, the 2018 Omnibus Plan will become effective as of May 23, 2018 (the ‘‘Effective Date’’), and will remain effective until terminated by the Company. This description of the 2018 Omnibus Plan below is qualified in its entirety by reference to the applicable provisions of the plan document, which is attached as Annex A to this proxy statement. 37 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 110D*/300D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 10383 Material Changes in 2018 Omnibus Plan The 2018 Omnibus Plan makes a number of changes to the 2004 Omnibus Plan. The primary changes are summarized below: (cid:127) The 2018 Omnibus Plan increases the number of shares of common stock that were previously available for issuance under the 2004 Plan by 800,000 shares. After this change, the number of shares available for issuance of future awards under the 2018 Omnibus Plan is the sum of the number of shares available under the 2004 Omnibus Plan for issuance of future awards immediately before the Effective Date 471,889, plus 800,000 shares. In addition, the number of shares subject to outstanding awards under the 2004 Omnibus Plan immediately before the Effective Date will remain subject to the terms of the 2004 Omnibus Plan, The maximum number of shares that can be made subject to the grant of incentive stock options is the maximum number of shares available under the 2018 Omnibus Plan. Except for the prohibition on liberal share recycling as discussed in the next paragraph, shares attributable to awards (including prior awards made under the 2004 Omnibus Plan) which expire, are forfeited or canceled or are otherwise paid or settled in cash or otherwise without the issuance of shares are again available for grant under the 2018 Omnibus Plan. (cid:127) The 2018 Omnibus Plan prohibits liberal share recycling by expanding the categories of shares that can not be recycled into the plan, consistent with best current practices. Specifically, under the 2018 Omnibus Plan, shares that have been (i) tendered or withheld to pay the exercise price of options or stock appreciation rights, (ii) withheld to satisfy tax withholding, (iii) repurchased by the Company using cash proceeds from the exercise of options or (iv) subject to a stock appreciation right or option and not issued upon net settlement or net exercise of the stock appreciation right or option, are not again eligible for issuance under the 2018 Omnibus Plan. In contrast, the 2004 Omnibus Plan provided that only in the case of options and stock appreciation rights, shares tendered by a participant or withheld by the Company to pay the option exercise price, the excess number of shares to which a stock appreciation right relates over the number of shares that are issued upon exercise of the stock appreciation right, and shares withheld or remitted by the Company to pay tax withholding, were not again available for issuance.. (cid:127) The 2018 Omnibus Plan limits the amount of compensation payable to each non-employee director of the Company for service in such capacity. Specifically, the sum of the grant date fair value of awards under the plan, plus cash or other compensation that is not equity-based for any fiscal year of the Company cannot exceed $700,000 per such director. In contrast, the 2004 Omnibus Plan contained limits that applied not to the overall value of compensation a non-employee director could receive, but only to the number of shares of common stock, capping the maximum for all non-employee directors at $500,000 and capping the maximum for each non-employee director to awards per year of not more than 50,000 shares. (cid:127) The 2018 Omnibus Plan provides in general that the term ‘‘change in control,’’ will (if used) be defined in the applicable award agreement, but provides that a liberal change in control definition cannot be used. Specifically, the plan provides that a change in control cannot be triggered upon any event that does not result in an actual change in control of the Company, such as an announcement or commencement of a tender offer or exchange offer, a potential takeover, shareholder approval (as opposed to consummation) of a merger or other transaction, acquisition of less than 15% or less of the outstanding voting securities of the Company, an unapproved change in less than a majority of the Board or other similar provisions in which the Committee determines that an actual change in control does not occur. Further, the 2018 Omnibus Plan prohibits the Committee from accelerating vesting of an award in connection with a liberal change in control definition. 38 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 90D*/120D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 52650 P r o x y (cid:127) The 2018 Omnibus Plan deletes many provisions that were previously in the 2004 Omnibus Plan solely to qualify certain performance-based compensation payable to named executive officers for a tax deduction under Section 162(m) of the Internal Revenue Code to the extent that the compensation exceeded $1,000,000 per year per officer. This includes, for example, deleting the incentive pool formula based on operating earnings and operating cash flow, deleting a specific list of performance goals, and deleting per officer annual limits on awards under the plan. The Compensation Committee of the Board of Directors (the ‘‘Committee’’) believes that these provisions no longer need to be in the plan as the exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to any of our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to binding written contracts that were in effect on November 2, 2017. However, the 2018 Omnibus Plan preserves the ability of the Compensation Committee to make performance- based grants, and the Committee plans to continue to do this. (cid:127) The 2018 Omnibus Plan deletes the definition of ‘‘Retirement’’ to provide for flexibility to specify the retirement criteria (if applicable) in an award agreement. How the 2018 Omnibus Plan is Designed to Protect Shareholders’ Interests The following features of the 2018 Omnibus Plan are intended to continue to protect the interests of our shareholders: (cid:127) Limits on terms of options and stock appreciation rights. The maximum terms of each stock option and stock appreciation right that can be granted under the Plan is ten years. (cid:127) Limits on share recycling. As discussed above, the 2018 Omnibus Plan does not allow liberal share recycling. (cid:127) No repricing of options or stock appreciation rights. The 2018 Omnibus Plan prohibits the repricing of ‘‘underwater’’ options and stock appreciation rights, whether by amending an existing award, substituting a new award at a lower price or executing a cash buyout, unless specifically approved by the Company’s shareholders. (cid:127) No discounted options or stock appreciation rights. The 2018 Omnibus Plan prohibits granting options or stock appreciation rights with an exercise price less than the fair market value per share of our common stock on the date of grant. (cid:127) No automatic change in control benefits. The 2018 Omnibus Plan does not provide any automatic benefits upon a change in control or any excise tax gross-ups. (cid:127) No liberal change in control definition. As discussed under the preceding title, the 2018 Omnibus Plan does not allow the use of a liberal change in control definition and prohibits accelerated vesting in connection with a liberal change in control definition. (cid:127) Limits on non-employee director compensation. As discussed under the preceding title, the 2018 Omnibus Plan places a meaningful limit on each non-employee director’s annual compensation. Summary of Other Provisions of 2018 Omnibus Plan Eligibility. Participation in the 2018 Omnibus Plan is limited to employees, directors and consultants of Neenah, its affiliates and/or its subsidiaries. Administration. Awards under the 2018 Omnibus Plan will be determined by the Committee. However, the Chief Executive Officer may grant awards to newly hired employees who are not officers subject to Section 16 of the Exchange Act, not to exceed 300,000 shares of common stock per year. 39 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 90D*/120D Foot: 0D/ 0D VJ RSeq: 6 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 1857 The 2018 Omnibus Plan allows for awards to be granted in the form of incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, performance share units, performance units, dividend equivalents rights and cash awards. Options. Options may be made exercisable at a price per share not less than the fair market value, determined in accordance with the 2018 Omnibus Plan, per share of common stock on the date that the option is awarded. Options may not be repriced without shareholder approval. The Committee may permit an option exercise price to be paid in cash or by the delivery of previously-owned shares of Company Common Stock, or to be satisfied through a cashless exercise executed through a broker or by having a number of shares of Company Common Stock otherwise issuable at the time of exercise withheld. The maximum term of any option is 10 years. The Committee is permitted under the 2018 Omnibus Plan to substitute stock appreciation rights for options on the same terms as the options with an aggregate difference between the fair market value of the shares subject to the stock appreciation right and the grant price of the stock appreciation right that is equal to the aggregate difference between the fair market value of the shares subject to the option and the option exercise price. The 2018 Omnibus Plan permits the grant of both incentive and non-qualified stock options. Incentive stock options cannot be granted more than 10 years after the earlier of the adoption of the 2018 Omnibus Plan by the Board of Directors or the date the plan is approved by the shareholders of the Company. Stock Appreciation Rights. Stock appreciation rights may have a grant price per share not less than the fair market value, determined in accordance with the 2018 Omnibus Plan, per share of common stock on the date that the option is awarded stock appreciation rights may not be repriced without shareholder approval. The maximum term of any stock appreciation right is 10 years. Stock appreciation rights may be granted separately or in connection with another award, and the Committee may provide that they are exercisable at the discretion of the holder or that they will be paid at a time or times certain or upon the occurrence or non-occurrence of certain events. Stock appreciation rights may be settled in shares of common stock or in cash, according to terms established by the Committee with respect to any particular award. Stock Awards and Restricted Stock Units. The Committee may grant shares of common stock or the right to receive common stock in the future to a participant, subject to such restrictions and conditions, if any, as the Committee shall determine. Performance Units and Performance Share Units. Performance units have an initial value determined by the Committee on the date of grant and performance shares have an initial value per share equal to the fair market value per share of common stock determined on the date of grant. The Committee sets the performance goals to determine the value of the number of performance units or performance shares that will be paid. Performance units and performance shares may be paid in shares of common stock or in cash as determined by the Committee. Other Incentives. Dividend equivalent rights and cash awards may be granted in such numbers and may be subject to such conditions or restrictions as the Committee shall determine and shall be payable in cash or shares of common stock, as the Committee may determine. However, dividend equivalent rights may not be granted in connection with an option or a stock appreciation right. Deferrals. The Committee may require or permit participants to defer the receipt of awards under the 2018 Omnibus Plan. Recapitalizations and Reorganizations. The number of shares of common stock reserved for issuance in connection with the grant or settlement of awards or to which an award is subject, the number of shares issuable by the Chief Executive Officer as provided above under the heading ‘‘Administration,’’ and the exercise price of each option and stock appreciation right are subject to adjustment in the event of any recapitalization of the Company or similar event effected without 40 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 190D*/240D Foot: 0D/ 0D VJ RSeq: 7 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 26556 P r o x y receipt of consideration by the Company. In the event of certain corporate reorganizations, awards may be substituted, cancelled, accelerated, cashed-out or otherwise adjusted by the Committee, provided such adjustment is not inconsistent with the express terms of the 2018 Omnibus Plan. Transferability. Awards are not generally transferable or assignable, unless the Committee provides otherwise, but in any case, transfers for value are not permitted. Forfeiture and Clawbacks. Awards will be subject to forfeiture to the extent provided by the Committee in the applicable award agreement. In addition, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the participant is required to reimburse the Company the amount of any payment in settlement of an award earned or accrued during the twelve-month period following the first public issuance or filing of the financial document. Also, each Award is subject to forfeiture to the extent provided in any applicable clawback policy adopted by the Company or otherwise required pursuant to applicable law. Fungible Share Pool. Shares issued in respect of any Full-Value Award (i.e., stock issued pursuant to awards other than options or stock appreciation rights) granted under the 2018 Omnibus Plan shall be counted against the share limit as 2.3 shares for every one share actually issued in connection with such award. For example, if 100 shares are issued with respect to a Full-Value Award grantee, 230 shares will be counted against the share limit in connection with that award. Shares issued in respect of any other award (i.e., options and stock appreciation rights) shall be counted against the share limit as one share. Therefore, as noted previously, if stockholders approve the 2018 Omnibus Plan and all 1,271,889 shares available for future grants are granted as Full-Value Awards, the total number of shares issued under the future grants under the 2018 Omnibus Plan will be 552,995. Amendment or Termination. The 2018 Omnibus Plan may be amended by the Board of Directors, but stockholder approval for any amendment shall be required that (except as provided above regarding recapitalizations and reorganizations), increases the number of shares of common stock available, materially expands the classes of individuals eligible to receive awards, materially expands the type of awards available, would permit option repricing or stock appreciation rights repricing, or would otherwise require stockholder approval under the rules of the applicable stock exchange. The Committee may amend outstanding awards subject to the terms of the 2018 Omnibus Plan but in general may not take away a participant’s rights. Tax Consequences The following discussion outlines generally the federal income tax consequences of participation in the Amended Omnibus Plan. Individual circumstances may vary and each participant should rely on his or her own tax counsel for advice regarding federal income tax treatment under the plan. Non-Qualified Options. A participant will not recognize income upon the grant of an option or at any time prior to the exercise of the option or a portion thereof. At the time the participant exercises a non-qualified option or portion thereof, he or she will recognize compensation taxable as ordinary income in an amount equal to the excess of the fair market value of the common stock on the date the option is exercised over the price paid for the common stock, and the Company will then be entitled to a corresponding deduction. Depending upon the period shares of common stock are held after exercise, the sale or other taxable disposition of shares acquired through the exercise of a non-qualified option generally will result in a short- or long- term capital gain or loss equal to the difference between the 41 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 1070D*/2615D Foot: 0D/ 0D VJ RSeq: 8 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 38168 amount realized on such disposition and the fair market value of such shares when the non-qualified option was exercised. Incentive Stock Options. A participant who exercises an incentive stock option will not be taxed at the time he or she exercises the option or a portion thereof. Instead, he or she will be taxed at the time he or she sells the common stock purchased pursuant to the option. The participant will be taxed on the difference between the price he or she paid for the stock and the amount for which he or she sells the stock. If the participant does not sell the stock prior to two years from the date of grant of the option and one year from the date the stock is transferred to him or her, the participant will be entitled to capital gain or loss treatment based upon the difference between the amount realized on the disposition and the aggregate exercise price and the Company will not get a corresponding deduction. If the participant sells the stock at a gain prior to that time, the difference between the amount the participant paid for the stock and the lesser of the fair market value on the date of exercise or the amount for which the stock is sold, will be taxed as ordinary income and the Company will be entitled to a corresponding deduction; if the stock is sold for an amount in excess of the fair market value on the date of exercise, the excess amount is taxed as capital gain. If the participant sells the stock for less than the amount he or she paid for the stock prior to the one or two year periods indicated, no amount will be taxed as ordinary income and the loss will be taxed as a capital loss. Exercise of an incentive option may subject a participant to, or increase a participant’s liability for, the alternative minimum tax. Restricted Stock. A participant will not be taxed upon the grant of a restricted stock award if such award is not transferable by the participant or is subject to a ‘‘substantial risk of forfeiture,’’ as defined in the Internal Revenue Code. However, when the shares of common stock that are subject to the stock award are transferable by the participant and are no longer subject to a substantial risk of forfeiture, the participant will recognize compensation taxable as ordinary income in an amount equal to the fair market value of the stock subject to the stock award, less any amount paid for such stock, and the Company will then be entitled to a corresponding deduction. However, if a participant so elects at the time of receipt of a stock award, he or she may include the fair market value of the stock subject to the stock award, less any amount paid for such stock, in income at that time and the Company also will be entitled to a corresponding deduction at that time. Other Stock Incentives. A participant will not recognize income upon the grant of any other stock- based award. Generally, at the time a participant receives payment under any other stock-based award, he or she will recognize compensation taxable as ordinary income in an amount equal to the cash or the fair market value of the common stock received, and the Company will then be entitled to a corresponding deduction. Benefits under the 2018 Omnibus Plan Future awards under the 2018 Omnibus Plan will be subject to the discretion of the Committee and will depend on a variety of factors, including the value of the Company’s stock at the time of grant, as well as Company, divisional, and individual performance. Accordingly, it is not possible to determine the benefits that would be received under the 2018 Omnibus Plan. 42 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE107325// 2-APR-18 15:20 DISK126:[18ZAG1.18ZAG44001]DQ44001A.;12 mrll_1116.fmt Free: 2295DM/0D Foot: 0D/ 0D VJ RSeq: 9 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 50751 Equity Compensation Plan Information The following table summarizes information about outstanding options, share appreciation rights and restricted stock units and shares reserved for future issuance under our existing equity compensation plans as of December 31, 2017. (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights (b) Weighted-average exercise price of outstanding options, warrants, and rights(1) (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan Category Equity compensation plans approved by security holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,176(2)(3) 55.60 680,000(4) Equity compensation plans not approved by security holders . . . . . . . . . . . . . . . . . . . . . . . . N/A Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,176 N/A 55.60 N/A 680,000 P r o x y (1) The weighted-average exercise price of outstanding options, warrants and rights does not take into account restricted stock units since they do not have an exercise price. (2) Includes (i) 180,000 shares issuable upon the exercise of outstanding SARs, (ii) 41,377 shares issuable following the vesting and conversion of outstanding performance unit awards, and (iii) 88,799 shares issuable upon the vesting and conversion of outstanding RSUs, all as of December 31, 2017. As of December 31, 2017, we had an aggregate of 464,958 stock options and SARs outstanding. The weighted average exercise price of the stock options and SARs was $55.60 per share. (3) Includes 159,200 shares that would be issued upon the assumed exercise of 425,200 SARs at the price of $90.65 per share closing price of our common stock on December 31, 2017. (4) Represents 680,000 shares available for future issuance under our 2004 Omnibus Plan as of December 31, 2017. 43 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DQ44001A.;12 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 16:38 DISK126:[18ZAG1.18ZAG44001]DS44001A.;15 mrll_1116.fmt Free: 466D*/3640D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 49587 ADDITIONAL EXECUTIVE COMPENSATION INFORMATION Summary Compensation Table The following table reflects compensation paid to or earned by our named executive officers for services rendered during 2017, 2016 and 2015: Change in Pension Value and Non-Qualified Deferred Non-Equity Name and Principal Position Year Salary ($) Stock Awards ($)(1) Option Incentive Plan Compensation Awards Compensation ($)(2) Earnings ($)(4) ($)(3) John P. O’Donnell . . . . . . . . . . . . 2017 830,000 1,351,979 498,003 2016 750,000 1,103,789 382,495 878,890 287,237 2015 625,000 President and Chief Executive Officer Bonnie C. Lind . . . . . . . . . . . . . . 2017 410,000 2016 370,000 2015 346,000 Senior Vice President, Chief Financial Officer and Treasurer Steven S. Heinrichs . . . . . . . . . . . 2017 365,000 2016 330,000 2015 310,000 Senior Vice President, General Counsel and Secretary Julie A. Schertell . . . . . . . . . . . . 2017 400,000 Senior Vice President, 2016 360,000 President Fine Paper & Packaging 2015 336,000 Matthew L. Duncan(6) . . . . . . . . . 2017 280,000 2016 234,444 Senior Vice President, Chief Human Resources Officer 267,146 240,238 242,340 208,078 185,697 188,753 260,647 233,716 220,745 136,871 245,482 98,400 83,249 79,221 76,652 64,348 61,763 96,002 81,006 72,139 50,406 50,394 472,478 577,500 850,000 155,595 195,869 322,575 115,431 158,813 263,500 161,150 182,655 416,724 88,550 101,725 0 0 0 695,393 386,467 410,095 0 0 0 0 0 0 0 0 All Other Compensation ($)(5) 136,148 150,573 133,766 10,300 10,150 9,930 47,128 54,315 52,517 53,152 68,477 53,623 32,943 23,841 Total ($) 3,288,608 2,964,357 2,774,893 1,636,834 1,285,973 1,410,161 812,289 793,173 876,533 970,951 925,854 1,009,231 588,770 655,886 (1) Amounts shown reflect the aggregate grant date fair value with respect to performance share units, restricted stock units and restricted stock granted pursuant to our Omnibus Plan. The amounts represent the grant date fair value of the awards in accordance with ASC 718. The grant date fair value of the stock awards is equal to the fair market value of the underlying common stock on the date of grant. See Note 9 to the audited Financial Statement included in our 2017 Annual Report on Form 10-K for the assumptions used in valuing the performance share units. (2) Amounts shown reflect the aggregate grant date fair value with respect to stock options and stock appreciation rights (‘‘SAR’’) granted pursuant to our Omnibus Plan. The amounts represent grant date fair value of the SARs in accordance with ASC 718. The grant date fair value of the SAR awards is determined using the Black-Scholes option valuation model. See Note 9 to the audited Financial Statement included in our 2017 Annual Report on Form 10-K for the assumptions used in valuing the SARs. (3) Amounts shown reflect annual performance bonuses earned in the fiscal year and paid in the following year, and are described in detail in the portion of our Compensation Discussion and Analysis, captioned ‘‘2017 Annual Performance Bonus Awards.’’ (4) Amounts shown reflect the aggregate change during the year in the actuarial present value of accumulated benefit under our Pension Plan and Supplemental Pension Plan. The large variability in value year-to-year is caused, for the most part, by changes in the discount rates used to calculate the value from year to year, and not any increase or change in the pension plan for any individual named executive officer. Messrs. Heinrichs, Duncan, O’Donnell and Ms. Schertell do not participate in any of the defined pension plans. (5) ‘‘All Other Compensation’’ only includes the following items: Neenah’s contribution to the 401(k) account of each of our named executive officers. The amounts shown for Messrs. Heinrichs, O’Donnell, Duncan and Ms. Schertell also include Neenah’s special company profit-sharing contribution to their accounts in the 401(k) Plan and Supplemental Retirement Contribution Plan as disclosed on page 49 of this Proxy Statement. The amounts shown for Ms. Lind, Mr. Heinrichs, Duncan, and Ms. Schertell in 2017, 2016, and 2015 include expenses for tax preparation and financial planning. (6) Mr. Duncan was hired by the Company on February 29, 2016. 44 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DS44001A.;15 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 16:38 DISK126:[18ZAG1.18ZAG44001]DS44001A.;15 mrll_1116.fmt Free: 1720DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 25956 2017 Grants of Plan Based Awards The following table contains information relating to the plan based awards grants made in 2017 to our named executive officers under the Omnibus Plan and is intended to supplement the 2017 Summary Compensation Table listed above. Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) Estimated Future Payouts Under Equity Incentive Plan Awards(2) All Other Option Awards (3) Exercise or Base Number of Securities Price of Underlying Option Award ($/SH) (#) Name and Principal Position John P. O’Donnell . President and Chief Executive Officer . . . . . . . . . . . . . . . Bonnie C. Lind . . Senior Vice President, Chief Financial Officer and Treasurer Plan Grant Date . MIP 01/30/2017 PSU 01/30/2017 SAR 01/30/2017 . MIP 01/30/2017 PSU 01/30/2017 SAR 01/30/2017 . Steven S. Heinrichs . . Senior Vice President, General Counsel and Secretary . . . Julie A. Schertell . Senior Vice President, President Fine Paper & Packaging . . . . . . MIP 01/30/2017 PSU 01/30/2017 SAR 01/30/2017 . . . . . . MIP 01/30/2017 PSU 01/30/2017 SAR 01/30/2017 Matthew L. Duncan . . Senior Vice President, Chief Human Resources Officer . . . . . . MIP 01/30/2017 PSU 01/30/2017 SAR 01/30/2017 Threshold Target Maximum Threshold Target Maximum Options (#) (#) (#) ($) ($) ($) 0 0 0 0 0 747,000 1,494,000 5,658 14,145 28,290 246,000 492,000 1,118 2,795 5,590 36,753 82.15 7,262 82.15 182,500 365,000 871 2,177 4,354 5,657 82.15 220,000 550,000 1,091 2,727 5,454 7,085 82.15 140,000 280,000 573 1,432 2,864 3,720 82.15 Grant Date Fair Value of Stock and Option Awards ($) 1,351,979 498,003 267,146 98,400 208,078 76,652 260,647 96,002 136,871 50,406 P r o x y (1) (2) Reflects the range of potential annual incentive bonus payments that could have been earned by each named executive officer under Neenah’s MIP in 2017. The actual bonuses earned in 2017 are reflected in the Summary Compensation Table above under the caption ‘‘Non-Equity Incentive Plan Compensation.’’ For more information regarding annual incentive bonus opportunities, see the discussion in the Compensation Discussion and Analysis. Reflects the range of potential performance share units that may be earned by each named executive officer, based on the Company’s level of achievement of performance goals in 2017 and total shareholder return relative to a peer group for the performance period ending December 31, 2017. After the performance period the shares remain subject to a two year holding period. For more information regarding the performance share units, including how the number of performance share units awarded was determined and the vesting terms applicable to such units, see the discussion in the Compensation Discussion and Analysis. Outstanding restricted share units receive dividends at the same rate as other stockholders. (3) The SARs vest as to one-third of the shares on each of the first three anniversaries of the grant date. 45 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DS44001A.;15 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:17 DISK126:[18ZAG1.18ZAG44001]DU44001A.;13 mrll_1116.fmt Free: 48D*/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 9882 Outstanding Equity Awards at 2017 Fiscal Year-End The following table sets forth information concerning outstanding equity awards for our named executive officers as of December 31, 2017. Option Awards Stock Awards Equity Incentive Plan Awards: Number of Securities Underlying Number of Securities Underlying Number of Securities Underlying Unexercised Unexercised Unexercised Option Options (#) Options (#) Exercise Exercisable Unexercisable Options (#) Price ($) Unearned Name and Principal Position Equity Incentive Equity Incentive Plan Awards: Plan Awards: Market or Number of Unearned Payout Value of Unearned Shares, Units Shares, Units Number of Shares or Market Value of Units or shares or Rights That Stock That Units of Expiration Have Not Stock Have Not Vested or Other Option Vested Date or Other Rights That Have Not Vested ($) John P. O’Donnell . President and Chief Executive Officer . . . . . . 11,627 9,437 0 5,813 18,875 36,753 . . . Bonnie C. Lind . . Senior Vice President, Chief Financial Officer and Treasurer . Steven S. Heinrichs . . Senior Vice President, General Counsel and Secretary . . Julie A. Schertell . . Senior Vice President, President Fine Paper & Packaging . . . . . . . . . . . . Matthew L. Duncan . . Senior Vice President, Chief Human Resources Officer . . . . 1,728 1,603 2,054 0 1,734 0 1,588 0 3,000 4,900 4,370 2,920 1,999 0 793 0 0 1,604 4,108 7,262 0 1,251 3,175 5,657 0 0 0 1,460 3,997 7,085 1,587 3,720 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 59.72(4) 57.95(5) 82.15(6) 01/26/2025 01/25/2026 01/29/2027 42.82(3) 59.72(4) 57.95(5) 82.15(6) 01/27/2024 01/26/2025 01/25/2026 01/29/2027 31.23(2) 59.72(4) 57.95(5) 82.15(6) 01/28/2023 01/26/2025 01/25/2026 01/29/2027 24.09(1) 31.23(2) 42.82(3) 59.72(4) 57.95(5) 82.15(6) 01/24/2022 01/28/2023 01/27/2024 01/26/2025 01/25/2026 01/29/2027 60.56(7) 82.15(6) 02/28/2026 01/29/2027 15,401(8) 14,145(9) 1,103,789 1,351,979 3,352(8) 2,795(9) 240,238 267,146 2,591(8) 2,177(9) 185,697 208,078 3,261(8) 2,727(9) 233,716 260,647 1,942(8) 1,432(9) 145,437 136,871 (1) (2) (3) (4) (5) (6) (7) (8) (9) These options were granted on January 25, 2012 and vested as follows: 33.34% on January 25, 2013 and 33.33% on both January 25, 2014 and January 25, 2015. These options were converted to stock appreciation rights on July 1, 2014. These options were granted on January 29, 2013, and vest as follows: 33.34% on January 29, 2014 and 33.33% on both January 29, 2015 and January 29, 2016. These options were converted to stock appreciation rights on July 1, 2014. These options were granted on January 28, 2014, and vest as follows: 33.34% on January 28, 2015 and 33.33% on both January 28, 2016 and January 28, 2017. These options were converted to stock appreciation rights on July 1, 2014. These stock appreciation rights were granted on January 27, 2015, and vest as follows: 33.34% on January 27, 2016 and 33.33% on both January 27, 2017 and January 27, 2018. These stock appreciation rights were granted on January 26, 2016, and vest as follows: 33.34% on January 26, 2017 and 33.33% on both January 26, 2018 and January 26, 2019. These stock appreciation rights were granted on January 30, 2017, and vest as follows: 33.34% on January 30, 2018 and 33.33% on both January 30, 2019 and January 30, 2020. These stock appreciation rights were granted to Mr. Duncan on February 29, 2016 and vest as follows: 33.34% on February 28, 2017, and 33.33% on both February 28, 2018 and February 28, 2019. These performance share units target levels were set on January 16, 2016 and were earned on December 31, 2016, based on the Company’s achievement of performance goals during the performance period ending December 31, 2016. The awards were granted at 138% of target and the market value disclosed in this table reflects the sizing of these awards. These performance share units are subject to a two year continued service requirement after the one year performance period, subject to certain exceptions. These performance share units target levels were set on January 30, 2017 and 75% of the award was earned on December 31, 2017, based on the Company’s achievement of performance goals during the performance period ending December 31, 2017. This component of the awards were granted at 108% of target as disclosed in the CD&A Section of the 2017 Proxy Statement and the market value disclosed in this table reflects the sizing of these awards. These performance share units are subject to a two year continued service requirement after the one year performance period, subject to certain exceptions. The remaining 25% of the grant is subject to a three year performance period ending December 31, 2019. 46 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DU44001A.;13 v6.8  MERRILL CORPORATION CHE109572// 2-APR-18 14:33 DISK126:[18ZAG1.18ZAG44001]DW44001A.;8 mrll_1116.fmt Free: 540D*/1600D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 893 Option Exercises and Stock Vested in 2017 The following table sets forth information regarding options exercised and stock awards vested for our named executive officers in 2017. Option Awards Stock Awards(2) Name Number of Shares Acquired on Exercise (#) . . . . . . . . . . . . . . . . . . . . . . John P. O’Donnell Bonnie C. Lind . . . . . . . . . . . . . . . . . . . . . . . . Steven S. Heinrichs . . . . . . . . . . . . . . . . . . . . . . Julie A. Schertell . . . . . . . . . . . . . . . . . . . . . . . Matthew L. Duncan . . . . . . . . . . . . . . . . . . . . . 145,748 1,603 6,529 1,601 1,189 (1) Reflects the market value of the shares on the vesting date. Value Realized on Exercise ($) 8,747,566 41,650 233,240 98,323 25,502 Number of Shares Acquired on Vesting (#) 16,046 4,424 3,446 4,030 1,652 Value Realized on Vesting ($)(1) 1,454,570 401,036 312,380 365,320 121,009 (2) These shares represent the vesting of the Performance Share Units granted to each of our named executive officer in January of 2015, which vested on December 31, 2017, after a one year performance and two year holding period. P r o x y Pension Plans The Neenah Pension Plan is a broad-based, tax-qualified defined benefit pension plan, which provides a benefit upon retirement to eligible employees of the Company. The Neenah Supplemental Pension Plan is a non-qualified defined benefit pension plan which covers pay and benefits above the qualified limits in the Pension Plan. The compensation covered by these defined benefit plans includes the salary and non-equity incentive payments set forth above in the Summary Compensation Table. Under our Pension Plan an employee is entitled to receive an annual standard benefit based on years of service and integrated with social security benefits. The Code generally places limits on the amount of pension benefits that may be paid from the tax qualified Pension Plan. However, we will pay any participant in our Supplemental Pension Plan the amount of the benefit payable under the Pension Plan that is limited by the Code. Retirement benefits for participants in the Pension Plan who have at least five years of service may begin on a reduced basis at age 55 or on an unreduced basis at the normal retirement age of 65. Unreduced benefits also are available (i) for participants with ten years of service at age 62 or as early as age 60 with thirty years of service and (ii) as described below, for certain involuntary terminations. Ms. Lind is eligible for early retirement on a reduced basis. None of our other named executive officers currently is eligible for retirement under our Pension Plan or Supplemental Pension Plan. The normal form of benefit is a single-life annuity payable monthly and other optional forms of benefit are available including a joint and survivor benefit. Accrued benefits under our Supplemental Pension Plan will, at the participant’s option, either be paid as monthly payments in the same form as the retirement payments from the Pension Plan or as an actuarially determined lump sum payment upon retirement after age 55. For a discussion of how we value these obligations and the assumption we use in that valuation, see Note 8 to our financial statements included in our 2017 Annual Report on Form 10-K. For purposes of determining the present value of accumulated benefits, we have used the normal retirement age under the plans, which is 65. 47 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DW44001A.;8 v6.8  MERRILL CORPORATION CHE109572// 2-APR-18 14:33 DISK126:[18ZAG1.18ZAG44001]DW44001A.;8 mrll_1116.fmt Free: 1930D*/2720D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 53644 2017 Pension Benefits The following table sets forth information as of December 31, 2017 regarding accumulated benefits to our named executive officers under our Pension Plan, Supplemental Pension Plan and German Pension Plans. Name Plan Name Bonnie C. Lind . . . . . Neenah Pension Plan Neenah Supplemental Pension Plan Number of Years Credited Service(1) Present Value of Accumulated Benefit ($)(2) 36.0 36.0 1,964,349 2,941,242 (1) Includes years of service credited for employment with Kimberly-Clark prior to Neenah’s spin-off for Ms. Lind (2) For a description of the assumptions applied in determining the present value of accumulated benefits reported above, see Note 8 to the audited Financial Statements included in our 2017 Annual Report on Form 10-K. 2017 Nonqualified Deferred Compensation The Supplemental RCP is a nonqualified excess benefit and supplemental retirement plan pursuant to which the Company provides additional retirement benefits to certain highly compensated employees. These Company contributions are intended to provide contributions to those individuals whose benefits under tax-qualified programs are restricted by the limitations permitted by the Internal Revenue Code. Contributions are held for each participant in either an excess benefit or supplemental benefit unfunded separate account. Participant accounts are credited with earnings, gains and losses based on the rate of return of investment funds selected by the participant, which the participant may elect to change in accordance with the participant’s elections under the Supplemental RCP. Payments can be tied to termination of employment, including retirement, and would be paid in lump sum. If a participant dies before receiving the full value of their account balance, the participant’s beneficiary would receive the remainder of the benefit in one lump sum payment. All accounts would be distributed promptly following a change in control, subject to a 10% reduction in a current participant’s account and a 5% reduction in an account for a retired participant. The Deferred Compensation Plan enables our executive officers to defer a portion of annual cash compensation (base salary and non-equity awards under our MIP). This plan is intended to assist our executive officers in maximizing the value of the compensation they receive from the Company and assist in their retention. Ms. Lind does not participate in the Supplemental RCP due to her participation in the Pension Plan and 48 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DW44001A.;8 v6.8  MERRILL CORPORATION CHE109572// 2-APR-18 14:33 DISK126:[18ZAG1.18ZAG44001]DW44001A.;8 mrll_1116.fmt Free: 90D /120D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 49148 Supplemental Pension Plan. Named executive officer participation in the Supplemental RCP and the Deferred Compensation Plan in 2017 is, as follows: Name John P. O’Donnell . . . . . . . . . . . . . . . . President and Chief Executive Officer Steven S. Heinrichs . . . . . . . . . . . . . . . Senior Vice President, General Counsel and Secretary Julie A. Schertell . . . . . . . . . . . . . . . . . Senior Vice President, President Fine Paper & Packaging Matthew L. Duncan . . . . . . . . . . . . . . Senior Vice President, Chief Human Resources Officer Executive Contributions in last Fiscal Year(1) Company Contributions in last Fiscal Year(2) Aggregate Earnings in last Fiscal Year Aggregate Withdrawal/ Distributions 0 0 0 0 $99,531 $90,617 $19,036 $28,388 $23,449 $28,728 $ 7,541 $ 276 0 0 0 0 Aggregate Balance at Last Fiscal Year $778,958 $254,156 $223,938 $ 7,850 P r o x y (1) None of our named executive officers elected to defer compensation in 2017 under the Deferred Compensation Plan (2) Amounts are reported as 2017 compensation in the ‘‘All Other Compensation’’ column of the Summary Compensation Table. Potential Payments Upon Termination We do not have employment agreements or other individual arrangements with our named executive officers that provide for specific benefits upon a termination of employment. In general, upon termination of employment, an executive officer will receive compensation and benefits for which he or she has already vested. This includes accrued but unpaid salary, accrued and unused vacation pay, and payments and benefits accrued under our broad-based benefit programs. The following section describes certain payments and benefits that would be payable to our named executive officers in the event of their involuntary termination in connection with a change-in-control of Neenah, or other involuntary termination. Involuntary Termination in Connection with a Change in Control The 2017 Executive Severance plan (effective April 1, 2017) provides named officers certain severance benefits both upon termination of employment following a change in control of Neenah and outside of a change in control. The 2017 revisions also categorize the participating officers as either ‘‘Tier 1,’’ ‘‘Tier 2’’ or ‘‘Tier 3’’ participants in order to provide varying benefit amounts to the different officers. All NEOs are Tier 1 participants in the 2017 Executive Severance Plan. After April 1, 2017, officers covered by 2017 Executive Severance Plan will not be eligible to receive benefits under the Severance Play Plan. Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ (as defined in the Executive Severance Plan) outside of a change in control of Neenah each NEO will be entitled to an amount equal to one and one-half times his or her base salary. Upon termination of the officer’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ within the two-year period following a change in control, the Executive Severance Plan provides that 49 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DW44001A.;8 v6.8  MERRILL CORPORATION CHE109572// 2-APR-18 14:33 DISK126:[18ZAG1.18ZAG44001]DW44001A.;8 mrll_1116.fmt Free: 490DM/0D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 20533 each NEO will be entitled to the sum of (i) two times the sum of his or her annual base salary, (ii) the amount of bonus under Neenah’s Management Incentive Plan that he or she has earned through the date of the change in control plus two times his or her targeted annual bonus; (iii) any profit-sharing contributions or pension plan benefits forfeited as a result of such termination; (iv) the amount of profit-sharing contributions and pension plan benefits such participant would have received under the qualified and supplemental retirement plans but for his or her termination for the two-year period following his or her termination; and (v) the cost of medical and dental COBRA premiums for a period of two years. In addition, each NEOs will be fully vested in his or her account under the Deferred Compensation Plan and any awards granted to him or her under the Omnibus Plan. Excise tax gross up payments are not included as a part of this plan. In addition, upon termination of an NEO’s employment by Neenah without ‘‘cause’’ or by the officer for ‘‘good reason’’ the NEO will be eligible to receive reimbursement for outplacement service costs for a period of two years for an amount not to exceed $50,000. The following table shows the payments that would be made to each of our named executive officers under the Executive Severance Plan in connection with a change-in-control termination as of December 31, 2017. Payments Severance(1) . . . . . . . . . . . . . . . . . . . Prorated Non-Equity Incentive Payment(2) . . . . . . . . . . . . . . . . . . Unvested Stock Option Spread(3) . . . . Unvested Restricted Stock(4) . . . . . . . LTCP Payment . . . . . . . . . . . . . . . . . Retirement Benefit Payment(5) . . . . . Welfare Benefit Values(6) . . . . . . . . . Outplacement . . . . . . . . . . . . . . . . . . Aggregate Payments . . . . . . . . . . . . . . John P. O’Donnell Bonnie C. Lind Steven S. Heinrichs Julie A. Schertell Matthew L. Duncan $3,154,000 $1,312,000 $1,095,000 $1,240,000 $ 840,000 $ 0 $1,109,442 $2,965,343 $ 320,538 $ 272,123 38,588 $ $ 50,000 $7,910,034 $ 0 $ 245,672 $ 624,579 $ 63,364 $ 808,436 36,956 $ $ 50,000 $3,141,007 $ 0 $ 190,604 $ 484,071 49,314 $ 86,486 $ 50,446 $ $ 50,000 $2,005,921 $ 0 $ 236,115 $ 608,262 61,823 $ 89,184 $ 38,588 $ $ 50,000 $2,323,936 0 $ $ 79,372 $ 348,096 32,453 $ 59,148 $ 50,446 $ $ 50,000 $1,459,515 (1) Severance payment equal to two times the sum of the executive’s annual base salary at the time of the termination plus the target bonus. (2) The Target Non-Equity Incentive Payment is prorated for the number of days in the calendar year prior to termination. Since the assumed termination is December 31, 2017 the Non-Equity Incentive Payment for 2017 would have been earned and paid to the executives and would not be payable under the Executive Severence Plan. (3) Total value of unvested stock option spread and unvested restricted stock that would become vested upon a change in control assuming a share price of $90.65 and a change-in-control date of December 31, 2017. (4) All unearned target performance share units vest upon a change-in-control event. Amounts are based on target 2016 and 2017 performance share unit grants. (5) Actuarial value attributable to retirement benefits. (6) Estimated value associated with the continuation of medical and dental for two years post-termination. 50 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DW44001A.;8 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:27 DISK126:[18ZAG1.18ZAG44001]DY44001A.;9 mrll_1116.fmt Free: 3290DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 64193 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The following directors served on the Compensation Committee during 2017: Ms. Dano, Mr. McGovern, Mr. Lucas and Dr. Wood. None of the members of the Compensation Committee was an officer or employee of Neenah during 2017 or any time prior thereto, and none of the members had any relationship with Neenah during 2017 that required disclosure under Item 404 of Regulation S-K. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act and rules and regulations of the SEC thereunder require our directors, officers and persons who beneficially own more than 10% of our common stock, as well as certain affiliates of such persons, to file initial reports of their ownership of our common stock and subsequent reports of changes in such ownership with the SEC. Directors, officers and persons owning more than 10% of our common stock are required by SEC rules and regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of the copies of such reports received by us and on information provided by the reporting persons, we believe that during 2017, our directors, officers and owners of more than 10% of our common stock complied with all applicable filing requirements, except that Mr. Moore filed a Form 4 late on April 10, 2018 representing restricted stock units granted in lieu of a quarterly cash dividend granted in 2017 and 2018. Ms. Schertell filed a Form 4 late on September 7, 2017 representing a gift of shares transaction on August 29, 2017. P r o x y 51 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DY44001A.;9 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:27 DISK126:[18ZAG1.18ZAG44001]DY44001A.;9 mrll_1116.fmt Free: 1930DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 33561 AUDIT COMMITTEE REPORT The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the accuracy and integrity of Neenah’s financial reporting, including the performance and the independence of Neenah’s independent registered public accounting firm, Deloitte & Touche LLP (‘‘Deloitte’’). Our Board of Directors adopted an Audit Committee Charter, which sets forth the responsibilities of the Audit Committee. The charter is available on our website at www.neenah.com. The Audit Committee reviewed and discussed with management and Deloitte our audited financial statements for the fiscal year ended December 31, 2017. The Audit Committee also discussed with Deloitte the matters required to be discussed under Statement on Auditing Standards No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (‘‘PCAOB’’). The Audit Committee received the written disclosures and other communications from Deloitte that are required by the applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee, which included independence considerations. The Audit Committee reviewed the audit and non-audit services provided by Deloitte for the fiscal year ended December 31, 2017 and determined to engage Deloitte as the independent registered public accounting firm of Neenah for the fiscal year ending December 31, 2018. The Audit Committee also received and reviewed a report by Deloitte outlining communications required by NYSE listing standards describing: (1) the firm’s internal quality control procedures; (2) any material issue raised by a) the most recent internal quality control review of the firm, b) peer review of the firm, or c) any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with issues; and (3) (to assess Deloitte’s independence) all relationships between Deloitte and us. In reliance upon the Audit Committee’s review of the audited financial statements, the discussions noted above, and Deloitte’s report, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2017 for filing with the SEC. Audit Committee: Timothy S. Lucas, Chairman Philip C. Moore Stephen M. Wood William M. Cook 52 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DY44001A.;9 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:27 DISK126:[18ZAG1.18ZAG44001]DY44001A.;9 mrll_1116.fmt Free: 55D*/120D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 36700 P r o x y RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (ITEM 4) The Audit Committee and the Board unanimously recommend that the stockholders vote ‘‘FOR’’ the proposal to ratify the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm. The Audit Committee of our Board of Directors, in accordance with its charter and authority delegated to it by the Board, has appointed the firm of Deloitte & Touche LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2018. As a matter of good corporate practice, the Board has directed that such appointment be submitted to our stockholders for ratification at the Annual Meeting. Deloitte & Touche LLP has served as our independent registered public accounting firm since our spin-off from Kimberly-Clark Corporation in November 2004 and is considered by our Audit Committee to be well qualified. If the stockholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will reconsider the appointment. Even if the stockholders ratify the appointment, the Audit Committee, in its discretion, may appoint a different independent auditor at any time during the year if the Audit Committee determines that such a change would be in the best interests of Neenah and its stockholders. Representatives of Deloitte & Touche LLP will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so. They also will be available to respond to appropriate questions from stockholders. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES Audit Fees Aggregate fees for professional services rendered for us by Deloitte & Touche LLP, the member firms of Deloitte Touche and Tohmatsu and their respective affiliates (‘‘Deloitte & Touche’’) as of or for the fiscal years ended December 31, 2017 and December 31, 2016 are set forth below. The aggregate fees included in the Audit category are fees billed for the fiscal year for the integrated audit of our annual financial statements and review of statutory and regulatory filings. The aggregate fees included in each of the other categories are fees billed in the fiscal years. Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit-Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . All Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,737,150 0 0 0 $1,934,000 0 0 0 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,737,150 $1,934,000 2016 2017 Audit Fees were for professional services rendered for the audit of our annual consolidated financial statements including the audit of our internal control over financial reporting and review of quarterly reports on Form 10-Q filed by us with the SEC. Policy on Audit Committee Pre-Approval To avoid potential conflicts of interest in maintaining auditor independence, the law prohibits a publicly-traded company from obtaining certain non-audit services from its independent registered public accounting firm. The law also requires the audit committee of a publicly traded company to pre-approve other services provided by the independent registered public accounting firm. Pursuant to 53 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DY44001A.;9 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:27 DISK126:[18ZAG1.18ZAG44001]DY44001A.;9 mrll_1116.fmt Free: 50D*/740D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 62787 its charter, the Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. In its pre-approval of non-audit services, the Audit Committee considers, among other factors, the possible effect of the performance of such services on the auditor’s independence. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee. The decisions of any Audit Committee member to whom pre-approval authority is delegated shall be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee pre-approved all services performed by the independent registered public accounting firm in fiscal 2017 and fiscal 2016, including those services described in the table above under the captions ‘‘Audit Fees’’. STOCKHOLDERS’ PROPOSALS FOR 2019 ANNUAL MEETING Proposals of stockholders, excluding nominations for the Board, intended to be presented at the 2019 Annual Meeting should be submitted by certified mail, return receipt requested, and must be received by us at our executive offices in Alpharetta, Georgia, on or before December 9, 2018, the date that is 120 calendar days prior to the first anniversary of the date that this Proxy Statement is released to stockholders, to be eligible for inclusion in our Proxy Statement and form of proxy relating to that meeting and to be introduced for action at the 2019 Annual Meeting. In the event that the date of the 2019 Annual Meeting is changed more than thirty days from the date of this year’s meeting, notice by stockholders should be received no later than the close of business on the later of the 150th calendar day prior to the 2019 meeting or the 10th calendar day on which public announcement of the date of such meeting is first made. Any stockholder proposal must be in writing and must comply with Rule 14a-8 under the Exchange Act and must set forth (i) a description of the business desired to be brought before the meeting and the reasons for conducting the business at the meeting; (ii) the name and address, as they appear on our books, of the stockholder submitting the proposal; (iii) the class and number of shares that are beneficially owned by such stockholder; (iv) the dates on which the stockholder acquired the shares; (v) documentary support for any claim of beneficial ownership as required by Rule 14a-8; (vi) any material interest of the stockholder in the proposal; (vii) a statement in support of the proposal; and (viii) any other information required by the rules and regulations of the SEC. Stockholder nominations for the Board must comply with the procedures set forth above under ‘‘Corporate Governance— Nomination of Directors.’’ The failure of a stockholder to deliver a proposal in accordance with the requirements of the preceding paragraphs may result in it being excluded from our Proxy Statement and ineligible for consideration at the 2019 Annual Meeting. Further, the submission of a proposal in accordance with the requirements of the preceding paragraph does not guarantee that we will include it in our Proxy Statement or that it will be eligible for consideration at the 2019 Annual Meeting. We strongly encourage any stockholder interested in submitting a proposal to contact our Corporate Secretary in advance of the submission deadline to discuss the proposal. OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING Our Board knows of no matters other than those referred to in the accompanying Notice of Annual Meeting of Stockholders which may properly come before the Annual Meeting. However, if any other matter should be properly presented for consideration and vote at the Annual Meeting or any adjournment(s) thereof, it is the intention of the persons named as proxies on the enclosed form of proxy card to vote the shares represented by all valid proxy cards in accordance with their judgment of what is in the best interest of Neenah and its stockholders. 54 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DY44001A.;9 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:27 DISK126:[18ZAG1.18ZAG44001]DY44001A.;9 mrll_1116.fmt Free: 3330DM/0D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 20298 HOUSEHOLDING OF NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for Notices, and if applicable, the proxy statements and annual reports, with respect to two or more stockholders sharing the same address by delivering a single Notice to those stockholders. This method of delivery, often referred to as householding, should reduce the amount of duplicate information that stockholders receive and lower printing and mailing costs for companies. Neenah and certain intermediaries are householding Notices, and if applicable, proxy statements and annual reports, for shareholders of record in connection with its 2018 Annual Meeting. This means that: (cid:127) Only one Notice, and if applicable, proxy statement and annual report, will be delivered to multiple stockholders sharing an address unless you notify your broker or bank to the contrary; (cid:127) You can contact Neenah by calling 678-566-6500 or by writing to INVESTOR RELATIONS, Neenah Paper, Inc., at 3460 Preston Ridge Road, Preston Ridge III, Suite 600, Alpharetta, Georgia 30005 to request a separate copy of the Notice, and if applicable, proxy statement and annual report, for the 2018 Annual Meeting and for future meetings or, if you are currently receiving multiple copies, to receive only a single copy in the future or you can contact your bank or broker to make a similar request; and (cid:127) You can request delivery of a single copy of the Notice, and if applicable, proxy statement and annual report, from your bank or broker if you share the same address as another Neenah shareholder and your bank or broker has determined to household proxy materials. P r o x y 55 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: DY44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]LA44001A.;5 mrll_1116.fmt Free: 6410DM/0D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 37017 APPENDIX A Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LA44001A.;5 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]LC44001A.;7 mrll_1116.fmt Free: 6270DM/0D Foot: 0D/ 0D VJ J1:1Seq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 3959 P r o x y NEENAH, INC. 2018 OMNIBUS STOCK AND INCENTIVE COMPENSATION PLAN Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LC44001A.;7 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]LE44001A.;21 mrll_1116.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 11044 NEENAH, INC. 2018 OMNIBUS STOCK AND INCENTIVE COMPENSATION PLAN TABLE OF CONTENTS ARTICLE 1. ESTABLISHMENT AND PURPOSE OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.2 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 3. ELIGIBILITY, SHARES AVAILABLE AND ADMINISTRATION . . . . . . . . . . . . . . . . 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delegation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on Incentive Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limits on Non-Employee Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 4. TERMS OF AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 4.2 4.3 4.4 4.5 4.6 Terms and Conditions of All Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Award Agreement or Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Date of Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Tandem Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Non-Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Alterations to Awards after Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Awards Granted under Prior Plan and Code Section 162(m) Transition Rule . . . . . Terms and Conditions of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Option Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Conditions to the Exercise of an Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Termination of Incentive Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special Provisions for Certain Substitute Options . . . . . . . . . . . . . . . . . . . . . . . . . (f) (g) Substituting Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms and Conditions of Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) (b) Stock Appreciation Right Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Conditions to Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms and Conditions of Stock Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms and Conditions of Restricted Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) (b) Conditions to Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms and Conditions of Performance Unit Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Conditions to Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 6 6 6 6 7 7 7 7 7 8 8 8 8 8 9 9 9 9 9 9 9 9 9 10 i Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LE44001A.;21 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:00 DISK126:[18ZAG1.18ZAG44001]LE44001A.;21 mrll_1116.fmt Free: 2210DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 14355 4.7 4.8 4.9 Terms and Conditions of Dividend Equivalent Rights . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Conditions to Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms and Conditions of Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) (b) Conditions to Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 5. RESTRICTIONS ON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 5.2 Escrow of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 6. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in Capitalization; Merger; Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Equity Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Other Changes in Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) (d) Plan is not a Limit on Company Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compliance with Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No Representations or Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Right to Terminate Employment or Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Alienation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions and Restrictions upon Stock subject to Awards . . . . . . . . . . . . . . . . . . . . . . Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions on Delivery and Sale of Shares; Legends . . . . . . . . . . . . . . . . . . . . . . . . . . Listing and Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clawback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Awards to Non-U.S. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Termination and Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 12 12 12 13 13 13 13 14 14 14 15 15 P r o x y ii Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LE44001A.;21 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 49414 NEENAH, INC. 2018 OMNIBUS STOCK AND INCENTIVE COMPENSATION PLAN ARTICLE 1. ESTABLISHMENT AND PURPOSE OF THE PLAN 1.1 Establishment. Neenah, Inc., a Delaware corporation (the ‘‘Company’’) previously established the Neenah Paper, Inc. 2004 Omnibus Stock and Incentive Plan maintained under an amended and restated plan document effective May 30, 2013 (the ‘‘Prior Plan’’). The Neenah, Inc. 2018 Omnibus Stock and Incentive Compensation Plan (the ‘‘Plan’’) is an amendment and restatement of the Prior Plan. The Plan will become effective May 23, 2018, the date of annual meeting of the Company’s stockholders (the ‘‘Effective Date’’), subject to approval of the Plan by the Company’s stockholders. 1.2 Purpose of the Plan. The Plan is intended to (a) provide incentive to officers, employees, directors and consultants of the Company and its Affiliates to stimulate their efforts toward the continued success of the Company and to operate and manage the business in a manner that will provide for the long-term growth and profitability of the Company; (b) encourage Stock ownership by officers, employees, directors and consultants by providing them with a means to acquire a proprietary interest in the Company, acquire shares of Stock, or to receive compensation which is based upon appreciation in the value of Stock; and (c) provide a means of obtaining, rewarding and retaining officers, employees, directors, and consultants. ARTICLE 2. DEFINITIONS Whenever used herein, the masculine pronoun will be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise, and the following capitalized words and phrases are used herein with the meaning thereafter ascribed: 2.1 ‘‘Affiliate’’ means: (a) Any Subsidiary, (b) An entity that directly or through one or more intermediaries controls, is controlled by, or is under common control with the Company, as determined by the Company, or (c) Any entity in which the Company has such a significant interest that the Company determines it should be deemed an ‘‘Affiliate,’’ as determined in the sole discretion of the Company. 2.2 ‘‘Award’’ means, individually and collectively, Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Stock Awards (including Performance Stock Awards), Restricted Stock Units (including Performance Share Unit Awards), Performance Unit Awards, Dividend Equivalent Rights and Cash Awards. 2.3 ‘‘Award Agreement’’ means an agreement between the Company and a Participant or other documentation evidencing any Award granted under the Plan. 2.4 ‘‘Award Program’’ means a written program established by the Committee, pursuant to which Awards are granted under the Plan under uniform terms, conditions and restrictions set forth in such written program. 2.5 ‘‘Beneficial Owner’’ or ‘‘Beneficial Ownership’’ shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. 2.6 ‘‘Board of Directors’’ means the board of directors of the Company. 2.7 ‘‘Cash Awards’’ means rights to receive cash payments as described in Section 4.8. 2.8 ‘‘Change in Control’’ shall have the meaning provided in the applicable Award Agreement; provided, however (a) if required to avoid an Award being subject to tax under Code Section 409A, a Change in Control shall not be deemed to have occurred unless the event qualifies as a change in the ownership or effective control of the Company or in the ownership of a substantial portion of its assets Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 20675 P r o x y under Code Section 409A(a)(2)(A)(v) and (ii) such definition must be determined by the Committee to result in an actual change in control of the Company and shall not include provisions such as announcement or commencement of a tender or exchange offer, a potential takeover, shareholder approval (as opposed to consummation) of a merger or other transaction, acquisition of 15% or less of the Outstanding Company Voting Securities, an unapproved change in less than a majority of the Board or other similar provisions in which the Committee determines an actual change in control does not occur. 2.9 ‘‘Code’’ means the Internal Revenue Code of 1986, as amended. 2.10 ‘‘Committee’’ means the Compensation Committee of the Board of Directors. 2.11 ‘‘Deferral(s)’’ refers to the rights described in Section 4.9. 2.12 ‘‘Disability’’ has the meaning provided in the applicable Award Agreement, or if defined by reference to the Plan, means a physical or mental illness, injury or impairment which causes a Participant to meet the requirements to receive long-term disability benefits under a plan sponsored by the Company or an Affiliate, or if no such plan is applicable, a Participant’s inability to engage in the essential functions of his duties due to a medically determinable physical or mental impairment, which can be expected to result in death or to be of long-continued and indefinite duration. Notwithstanding the foregoing, Disability means, as to an Incentive Stock Option, a ‘‘permanent and total disability’’ within the meaning of Code Section 22(e)(3). In the event of a dispute, the determination of Disability will be made by the Committee and will be supported by advice of a physician competent in the area to which such Disability relates. Notwithstanding the foregoing, if specified in an Award Agreement or otherwise required to avoid an Award being subject to tax under Code Section 409A, a Disability shall not be deemed to have occurred unless the event also qualifies as a disability under Code Section 409A(a)(2)(C). 2.13 ‘‘Dividend Equivalent Rights’’ means certain rights to receive cash payments as described in Section 4.7. 2.14 ‘‘Exchange Act’’ means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. 2.15 ‘‘Fair Market Value’’ with regard to a date means: (a) If the shares of Stock are actively traded on any national securities system or any nationally recognized quotation or market system, the price at which Stock shall have been sold as reported by the exchange or system selected by the Committee on which the shares of Stock are then actively traded; (b) if the shares of Stock are not actively traded on any such exchange or system but are reported by such exchange or system, the price of Stock as reported by such exchange or system; or (c) if the shares of Stock are not actively traded or reported on any such exchange or system, the fair market value of the Stock as determined by the Committee determined by the reasonable application of a reasonable valuation method as most recently determined (but in no event more than twelve (12) months earlier), but taking into account the facts and circumstances as of such date. For purposes of Subsection (a), (b), or (c) above, the Committee may use the closing price as of the applicable date or the last trading or business day before that date, the average of the high and low prices as of the applicable date, the last trading or business day before that date or for a period certain ending on either such date, the price determined at the time, or immediately before or immediately after, the transaction is processed, the tender offer price for shares of Stock, or any 2 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 110D*/660D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 28758 other method which the Committee determines is reasonably indicative of fair market value; provided, however, that for purposes of granting Nonqualified Stock Options or Stock Appreciation Rights, Fair Market Value of Stock shall be determined in accordance with the requirements of Code Section 409A, and for purposes of granting Incentive Stock Options, Fair Market Value of Stock shall be determined in accordance with the requirements of Code Section 422. 2.16 ‘‘Incentive Stock Option’’ means an incentive stock option within the meaning of Section 422 of the Internal Revenue Code. 2.17 ‘‘Non-employee Director’’ means a member of the Board of Directors who is not an employee of the Company or a Subsidiary. 2.18 ‘‘Non-Qualified Stock Option’’ means a stock option that is not an Incentive Stock Option. 2.19 ‘‘Option’’ means a Non-Qualified Stock Option or an Incentive Stock Option. 2.20 ‘‘Over 10% Owner’’ means an individual who at the time an Incentive Stock Option is granted owns Stock possessing more than 10% of the total combined voting power of the Company or one of its Subsidiaries, determined by applying the attribution rules of Code Section 424(d). 2.21 ‘‘Participant’’ means an individual who receives an Award hereunder. 2.22 ‘‘Performance Unit Award’’ refers to a performance unit award as described in Section 4.6. 2.23 ‘‘Performance Goals’’ means any one or more performance goals established by the Committee, including without limitation, goals, either individually, alternatively or in any combination, applied to the Company as a whole or to a business unit or Affiliate, either individually, alternatively or in combination, and measured over a Performance Period established by the Committee, on an absolute basis or relative to a pre-established target, to prior period results or to a designated comparison group or index, in each case as specified by the Committee in the Award. The Committee may adjust any evaluation of performance under a Performance Goal in its discretion at any time. 2.24 ‘‘Performance Period’’ means, with respect to an Award, a period of time within which the Performance Goals relating to such Award are to be measured. The Performance Period will be established by the Committee. 2.25 ‘‘Performance Stock Awards’’ means Stock Awards containing Performance Goals. 2.26 ‘‘Performance Share Unit Awards’’ means Restricted Stock Unit awards containing Performance Goals. 2.27 ‘‘Person’’ shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a ‘‘group’’ as defined in Section 13(d) thereof. 2.28 ‘‘Restricted Stock Unit’’ refers to the rights described in Section 4.5. 2.29 ‘‘Stock’’ means Company’s common stock. 2.30 ‘‘Stock Appreciation Right’’ means a stock appreciation right described in Section 4.3. 2.31 ‘‘Stock Award’’ means a stock award described in Section 4.4. 2.32 ‘‘Subsidiary’’ means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the relevant time, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. A ‘‘Subsidiary’’ shall include any entity other than a corporation to the extent permissible under Code Section 424(f) or regulations or rulings thereunder. 3 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 230D*/240D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 11472 P r o x y ARTICLE 3. ELIGIBILITY, SHARES AVAILABLE AND ADMINISTRATION 3.1 Eligibility. Awards may be granted only to officers, employees, directors, and consultants of the Company, or any Affiliate of the Company; provided, however, that an Incentive Stock Option may only be granted to an employee of the Company or any Subsidiary. 3.2 Stock Subject to the Plan. Subject to adjustment in accordance with Section 6.2, a number of shares of Stock equal to the sum of (a) the number of shares of Stock subject to outstanding Awards under the Prior Plan immediately before the Effective Date, (b) the number of shares of Stock authorized and available for issuance of future Awards under the Prior Plan immediately before the Effective Date, and (c) eight hundred thousand (800,000) shares of Stock are hereby reserved exclusively for issuance upon exercise or payment pursuant to Awards. 3.3 Share Usage. Stock issued pursuant to Options or Stock Appreciation Rights shall reduce the number of shares of Stock available under Section 3.2 by one (1) share with respect to each share issued pursuant to such Award. Stock issued pursuant to Awards other than Options or Stock Appreciation Rights shall reduce the number of shares of Stock available under Section 3.2 by two and 3/10’s (2.3) shares of Stock with respect to each share of Stock issued pursuant to such Award. The shares of Stock attributable to any portion of an Award that is forfeited, cancelled, expired, terminated or paid or settled in cash or otherwise without the issuance of shares of Stock for any reason without becoming vested, paid, exercised, converted or otherwise settled in full in shares of Stock will again be available for issuance under Section 3.2, provided, however, that shares of Stock subject to an Award under the Plan shall not again be available for issuance if such Shares have been (a) tendered or withheld to pay the exercise price of Options or Stock Appreciation Rights, (b) withheld or remitted to satisfy the tax withholding on Awards, (c) repurchased by the Company using the cash proceeds received by the Company from the exercise of Options granted under the Plan or (d) subject to a Stock Appreciation Right or Option settled in Stock and not issued upon net settlement or net exercise of the Stock Appreciation Right or Option. 3.4 Administration of the Plan. The Plan is administered by the Committee. The Committee has full authority in its discretion to determine the officers, employees, directors and consultants of the Company or its Affiliates to whom Awards will be granted and the terms and provisions of Awards, subject to the Plan. Subject to the provisions of the Plan, the Committee has full and conclusive authority to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective Award Agreements and to make all other determinations necessary or advisable for the proper administration of the Plan. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan (whether or not such persons are similarly situated). The Committee’s decisions are final and binding on all Participants. 3.5 Delegation. The Committee may authorize individuals other than its members to carry out its policies and directives subject to the limitations and guidelines set by the Committee, and may delegate its authority under the Plan, provided, however, the delegation of authority to grant Awards shall be limited to grants by the Chief Executive Officer of the Company to newly hired employees, or to respond to special recognition or retention needs, and any such grants shall be limited to eligible Participants who are not subject to Section 16 of the Exchange Act. The delegation of authority shall be limited as follows: (a) with respect to individuals who are subject to Section 16 of the Exchange Act, the authority to grant Awards, the selection for participation, decisions concerning the timing, pricing and amount of a grant or Award and authority to administer Awards shall not be delegated by the Committee; (b) the maximum number of Shares covered by Awards which may be granted by the Chief Executive Officer within any calendar year period shall not exceed three hundred thousand (300,000); and (c) any delegation shall satisfy all applicable requirements of Rule 16b-3 of the Exchange Act, or 4 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 47399 any successor provision. Any individual to whom such authority is granted shall continue to be eligible to receive Awards under the Plan. 3.6 Limits on Incentive Stock Options. Up to one hundred percent (100%) of the shares of Stock reserved for issuance pursuant to Awards are permitted (but are not required) to be issued pursuant to Incentive Stock Options. In the case of Incentive Stock Options, the aggregate Fair Market Value (determined as at the date an Incentive Stock Option is granted) of stock with respect to which stock options intended to meet the requirements of Code Section 422 become exercisable for the first time by an individual during any calendar year under all plans of the Company and its Subsidiaries may not exceed $100,000; provided further, that if the limitation is exceeded, the Incentive Stock Option(s) which cause the limitation to be exceeded will be treated as Non-Qualified Stock Option(s). 3.7 Limits on Non-Employee Director Compensation. With respect to any Participant who is a Non-employee Director, the aggregate dollar value of (a) any Awards granted under the Plan (based on the grant date fair value of Awards as determined for financial reporting purposes) and (b) any cash or other compensation that is not equity-based and that is paid by the Company with respect to the Non-employee Director’s service as a member of the Board of Directors or any committees thereof for any fiscal year of the Company shall not exceed $700,000. 4.1 Terms and Conditions of All Awards. ARTICLE 4. TERMS OF AWARDS (a) Number of Shares. The number of shares of Stock as to which an Award may be granted will be determined by the Committee in its sole discretion, subject to the provisions of Section 3.2 as to the total number of shares available for grants under the Plan and subject to the limits in Sections 3.6 and 3.7. (b) Award Agreement or Program. Each Award will be evidenced either by an Award Agreement in such form and containing such terms, conditions and restrictions as the Committee may determine to be appropriate, including without limitation, Performance Goals or other criteria, if any, that must be achieved as a condition to vesting or settlement of the Award, or be made subject to the terms of an Award Program, containing such terms, conditions and restrictions as the Committee may determine to be appropriate, including without limitation, Performance Goals or other criteria, if any, that must be achieved as a condition to vesting or settlement of the Award; provided, however the Committee shall not be permitted to provide for vesting in connection with a change in control of the Company that does not meet the requirements of the definition of Change in Control hereunder. Each Award Agreement or Award Program is subject to the terms of the Plan and any provisions contained in the Award Agreement or Award Program that are inconsistent with the Plan are null and void. (c) Date of Grant. The date as of which an Award is granted will be the date on which the Committee has approved the terms and conditions of the Award and has determined the recipient of the Award and the number of shares of Stock covered by the Award (or formula for determining the same), and has taken all such other actions necessary to complete the grant of the Award or such later date as may be specified in the approval of the Award. (d) Tandem Awards. Any Award may be granted in connection with all or any portion of a previously or contemporaneously granted Award, subject to the other requirements of the Plan. Exercise or vesting of an Award granted in connection with another Award may result in a pro rata surrender or cancellation of any related Award, as specified in the applicable Award Agreement or Award Program. (e) Non-Transferability. Awards and rights under Awards are not saleable, transferable, alienable or assignable except by will or by the laws of descent and distribution, and each Award 5 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LG44001A.;9 mrll_1116.fmt Free: 46DM/0D Foot: 0D/ 0D VJ Seq: 6 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 16343 P r o x y and each Award and right under an Award is exercisable, during the Participant’s lifetime, only by the Participant; or in the event of the Disability of the Participant, by the legal representative of the Participant; or in the event of death of the Participant, by the legal representative of the Participant’s estate, or if no legal representative has been appointed within ninety (90) days of the Participant’s death, by the person(s) taking under the laws of descent and distribution applicable to the Participant; provided, however, that the Committee may allow a Participant to designate a beneficiary or beneficiaries in the manner determined by the Committee to exercise the rights of a Participant with respect to an Award upon the death of a Participant; provided, further, the Committee may waive any of the provisions of this Section or provide otherwise as to any Awards other than Incentive Stock Options, but the Committee may not allow a Participant to transfer an Award prior to its full settlement for value. (f) Deferrals. The Committee may establish rules and procedures to permit or require a holder of an Award to defer recognition of taxable income upon the exercise or vesting of an Award. (g) Alterations to Awards after Grant. After the date of grant of an Award, the Committee may, in its sole discretion, waive, modify or amend the terms and conditions of an Award (including without limitation, accelerating vesting and/or the time for payment or exercise, or curtailing the period for exercise upon a Change in Control) or terminate an Award, except to the extent that such alteration would be inconsistent with other provisions of the Plan or would, without the Participant’s consent, adversely affect the rights of a Participant under the Award in a manner not permitted by the Plan; provided, however, that no such consent shall be required if the Committee determines in its sole discretion that such alteration either (A) is required or advisable for the Company, the Plan or an Award to satisfy or conform to any law or regulation or to meet the requirements of any accounting standard or (B) is not reasonably likely to significantly diminish the benefits provided under such Award; provided, further, that the Committee shall not be permitted to accelerate vesting in connection with a change in control of the Company that does not meet the requirements of the definition of Change in Control hereunder. (h) Awards Granted under Prior Plan and Code Section 162(m) Transition Rule. Awards granted under the Prior Plan before the Effective Date shall be subject to the terms and conditions of the Plan, except (A) if an Award granted under the Prior Plan incorporates a definition by reference to the Prior Plan (other than the definition of Plan), the definition in the Prior Plan shall govern if different from the definition in the Plan or if no such definition appears in the Plan, (B) no termination, amendment, suspension, or modification of the Prior Plan or an Award granted under the Prior Plan shall adversely affect in any material way any Award granted under the Prior Plan, without the written consent of the Participant holding such Award, and (C) solely to the extent required to preserve the availability of a tax deduction for the Company under Code Section 162(m), the terms of the Prior Plan shall govern each Award granted or to be granted under the Prior Plan (i) that constitutes remuneration pursuant to a binding written contract that was in effect on November 2, 2017 or (ii) as to which transition relief from the changes made to Code Section 162(m) by the Tax Cuts and Jobs Act of 2017 is otherwise available. 4.2 Terms and Conditions of Options. Each Option granted under the Plan must be evidenced by an Award Agreement. At the time any Option is granted, the Committee will determine whether the Option is to be an Incentive Stock Option described in Code Section 422 or a Non-Qualified Stock Option, and the Option must be clearly identified as to its status as an Incentive Stock Option or a Non-Qualified Stock Option. Incentive Stock Options may only be granted to employees of the Company or any Subsidiary. At the time any Incentive Stock Option granted under the Plan is exercised, the Company will be entitled to legend the certificates (if any) representing the shares of Stock purchased pursuant to the Option to clearly identify them as representing the shares purchased upon the exercise of an Incentive Stock Option. An Incentive Stock Option may only be granted within ten (10) years from the earlier of the date the Plan is adopted or approved by the Company’s stockholders. 6 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LG44001A.;9 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LI44001A.;11 mrll_1116.fmt Free: 170D*/240D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 28487 (a) Option Price. Subject to adjustment in accordance with Section 6.2 and the other provisions of this Section, the exercise price (the ‘‘Exercise Price’’) per share of Stock purchasable under any Option must be as set forth in the applicable Award Agreement, but in no event may it be less than the Fair Market Value on the date the Option is granted. Except for adjustments as contemplated by Section 6.2 hereof, unless approved by the stockholders of the Company, in no event will the Exercise Price per share of Stock of any Option be reduced after the date of grant of the Option and no Option may be cancelled or surrendered in exchange for an Option with a lower Exercise Price per share of Stock or in exchange for cash or other consideration (‘‘Option Repricing’’). With respect to each grant of an Incentive Stock Option to a Participant who is an Over 10% Owner, the Exercise Price may not be less than 110% of the Fair Market Value on the date the Option is granted. (b) Option Term. Any Option granted to a Participant shall not be exercisable after the expiration of ten (10) years after the date the Option is granted; provided, however that any Incentive Stock Option granted to an Over 10% Owner shall not be exercisable after the expiration of five (5) years after the date the Option is granted. The term of any Option shall be specified in the applicable Award Agreement. (c) Payment. Payment for all shares of Stock purchased pursuant to exercise of an Option will be made in any form or manner authorized by the Committee in the Award Agreement or by amendment thereto, including, but not limited to, cash or, if the Award Agreement provides: (1) by delivery to the Company of a number of shares of Stock having an aggregate Fair Market Value of not less than the product of the Exercise Price multiplied by the number of shares the Participant intends to purchase upon exercise of the Option on the date of delivery; (2) in a cashless exercise through a broker; or (3) by having a number of shares of Stock withheld, the Fair Market Value of which as of the date of exercise is sufficient to satisfy the Exercise Price. In its discretion, and except to the extent precluded by the Sarbanes-Oxley Act of 2002, as amended, the Committee also may authorize (at the time an Option is granted or thereafter) Company financing to assist the Participant as to payment of the Exercise Price on such terms as may be offered by the Committee in its discretion. Payment must be made at the time that the Option or any part thereof is exercised, and no shares may be issued or delivered upon exercise of an Option until full payment has been made by the Participant. The holder of an Option, as such, has none of the rights of a stockholder. (d) Conditions to the Exercise of an Option. Each Option granted under the Plan is exercisable by the Participant or any other designated person, at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee specifies in the Award Agreement, subject to Section 4.1(g). (e) Termination of Incentive Stock Option. With respect to an Incentive Stock Option, in the event of termination of employment of a Participant, the Option or portion thereof held by the Participant which is unexercised will expire, terminate, and become unexercisable no later than the expiration of three (3) months after the date of termination of employment; provided, however, that in the case of a holder whose termination of employment is due to death or Disability, one (1) year will be substituted for such three (3) month period; provided, further that such time limits may be exceeded by the Committee under the terms of the grant, in which case, the Incentive Stock Option will be a Non-Qualified Option if it is exercised after the time limits that would otherwise apply. For purposes of this Subsection, termination of employment of the Participant will not be deemed to have occurred if the Participant is employed by another corporation (or a parent 7 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LI44001A.;11 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LI44001A.;11 mrll_1116.fmt Free: 350D*/420D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 8797 P r o x y or subsidiary corporation of such other corporation) which has assumed the Incentive Stock Option of the Participant in a transaction to which Code Section 424(a) is applicable. (f) Special Provisions for Certain Substitute Options. Notwithstanding anything to the contrary in this Section 4.2, any Option issued in substitution for an option previously issued by another entity, which substitution occurs in connection with a transaction to which Code Section 424(a) is applicable, may provide for an exercise price computed in accordance with such Code Section and the regulations thereunder and may contain such other terms and conditions as the Committee may prescribe to cause such substitute Option to contain as nearly as possible the same terms and conditions (including the applicable vesting and termination provisions) as those contained in the previously issued option being replaced thereby. (g) Substituting Stock Appreciation Rights. The Committee shall have the ability to substitute, without receiving Participant permission, Stock Appreciation Rights paid only in Stock (or Stock Appreciation Rights paid in Stock or cash at the Committee’s discretion) for outstanding Options; provided, the number of shares of Stock subject to the substituted Stock Appreciation Rights are the same as for the Options, the terms of the substituted Stock Appreciation Rights are the same as the terms for the Options and the difference between the Fair Market Value per share of the underlying Stock and the Threshold Price per share of the Stock Appreciation Rights is equal to the difference between the Fair Market Value per share of the underlying Stock and the Exercise Price per share of the Options. If, in the opinion of the Committee, this provision creates adverse accounting consequences for the Company, it shall be considered null and void. 4.3 Terms and Conditions of Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan must be evidenced by an Award Agreement. A Stock Appreciation Right entitles the Participant to receive the excess of (1) the Fair Market Value of a specified or determinable number of shares of Stock at the time of payment or exercise over (2) a specified or determinable price (the ‘‘Threshold Price’’) which, in the case of a Stock Appreciation Right granted in connection with an Option, may not be less than the Exercise Price for that number of shares subject to that Option. Subject to adjustment in accordance with Section 6.2, the Threshold Price per share of Stock attributable to a Stock Appreciation Right must be as set forth in the applicable Award Agreement, but in no event may it be less than the Fair Market Value on the date the Stock Appreciation Right is granted. Except for adjustments as contemplated by Section 6.2 hereof, unless approved by the stockholders of the Company, in no event will the Threshold Price per share of Stock attributable to a Stock Appreciation Right be reduced after the date of grant of the Stock Appreciation Right and no Stock Appreciation Right may be cancelled or surrendered in exchange for a Stock Appreciation Right with a lower Threshold Price per share of Stock or in exchange for cash or other consideration (‘‘Stock Appreciation Right Repricing’’). A Stock Appreciation Right granted in connection with an Award may only be exercised to the extent that the related Award has not been exercised, paid or otherwise settled. (a) Settlement. Upon settlement of a Stock Appreciation Right, the Company must pay to the Participant the excess of (1) the Fair Market Value of the number of shares of Stock attributable to the Stock Appreciation Right over (2) the Threshold Price, in cash or shares of Stock (valued at Fair Market Value per share on the date of payment or exercise) as provided in the Award Agreement or, in the absence of such provision, as the Committee may determine. (b) Stock Appreciation Right Term. Any Stock Appreciation Right granted to a Participant shall not be exercisable after the expiration of ten (10) years after the date the Stock Appreciation Right is granted. The term of any Stock Appreciation Right shall be specified in the applicable Award Agreement. 8 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LI44001A.;11 v6.8  MERRILL CORPORATION CHE109576// 2-APR-18 14:01 DISK126:[18ZAG1.18ZAG44001]LI44001A.;11 mrll_1116.fmt Free: 170D*/0D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 37754 (c) Conditions to Exercise. Each Stock Appreciation Right granted under the Plan is exercisable or payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee specifies in the Award Agreement, subject to Section 4.1(g). 4.4 Terms and Conditions of Stock Awards. A Stock Award shall entitle a Participant to receive a designated number of shares of Stock. At the time of the grant, the Committee will determine the factors which will govern the number of the Stock Award, including, at the discretion of the Committee, any Performance Goals that must be satisfied as a condition to retention of the Award. The Committee may require a cash payment from the Participant in an amount no greater than the aggregate Fair Market Value of the shares of Stock awarded determined at the date of grant in exchange for the grant of a Stock Award or may grant a Stock Award without the requirement of a cash payment. (a) Issuance. Stock Awards shall be issued by the Company in shares of Stock. (b) Conditions. The number of shares of Stock subject to a Stock Award and restrictions or conditions on such shares of Stock, if any, will be as the Committee provides in the Award Agreement, and the certificate (if any) for such shares will bear evidence of any restrictions or conditions, subject to Section 4.1(g). 4.5 Terms and Conditions of Restricted Stock Units. Restricted Stock Units shall entitle the Participant to receive, at a specified future date or event, payment of a specified number, or a percentage or multiple of a specified number, of shares of Stock at the end of a specified period, or the cash value thereof. At the time of the grant, the Committee will determine the factors which will govern the number of the Restricted Stock Units so payable, including, at the discretion of the Committee, any Performance Goals that must be satisfied as a condition to payment. The Committee may provide for an alternative specified number, percentage or multiple under specified conditions. (a) Payment. Payment in respect of Restricted Stock Units may be made by the Company in shares of Stock or in cash (valued at the Fair Market Value per share of Stock as of the date payment is owed) as provided in the applicable Award Agreement or Award Program, or, in the absence of such provision, as the Committee may determine. (b) Conditions to Payment. Each Restricted Stock Unit award granted under the Plan is payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee may specify in the applicable Award Agreement or Award Program, subject to Section 4.1(g) and intended compliance with or exemption from Code Section 409A. 4.6 Terms and Conditions of Performance Unit Awards. A Performance Unit Award shall entitle the Participant to receive, at a specified future date, payment of an amount based, all or in part, upon achievement of Performance Goals. The Performance Unit Award shall be equal to all or a portion of either (i) the value of a specified or determinable number of units (stated in terms of a designated or determinable dollar amount per unit) granted by the Committee, or (ii) a percentage or multiple of a specified amount determined by the Committee. At the time of the grant, the Committee must determine the base value of each unit; the number of units subject to a Performance Unit Award, the specified amount and the percentage or multiple of the specified amount, as may be applicable; and the Performance Goals applicable to the determination of the ultimate payment value of the Performance Unit Award. The Committee may provide for an alternative base value for each unit or an alternative percentage or multiple under certain specified conditions. (a) Payment. Payment in respect of Performance Unit Awards may be made by the Company in cash or shares of Stock (valued at Fair Market Value per share as of the date payment is owed) as provided in the applicable Award Agreement or Award Program or, in the absence of such provision, as the Committee may determine. 9 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LI44001A.;11 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 50D*/120D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 63843 P r o x y (b) Conditions to Payment. Each Performance Unit Award granted under the Plan shall be payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee may specify in the applicable Award Agreement or Award Program, subject to Section 4.1(g) and intended compliance with or exemption from Code Section 409A. 4.7 Terms and Conditions of Dividend Equivalent Rights. A Dividend Equivalent Right entitles the Participant to receive payments from the Company in an amount determined by reference to any cash dividends paid on a specified number of shares of Stock to Company stockholders of record during the period such rights are effective. Dividend Equivalent Rights may be granted in connection with other Awards but may not be granted in connection with an Option or a Stock Appreciation Right. The Committee may impose such restrictions and conditions on any Dividend Equivalent Right as the Committee in its discretion shall determine, including the date any such right shall terminate and may reserve the right to terminate, amend or suspend any such right at any time. (a) Payment. Payment in respect of a Dividend Equivalent Right may be made by the Company in cash or shares of Stock (valued at Fair Market Value per share on the date of payment or exercise) as provided in the Award Agreement or Award Program, or, in the absence of such provision, as the Committee may determine. (b) Conditions to Payment. Each Dividend Equivalent Right granted under the Plan is payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee specifies in the applicable Award Agreement or Award Program, subject to Section 4.1(g) and intended compliance with or exemption from Code Section 409A. 4.8 Cash Awards. In addition to Dividend Equivalent Rights, the Committee may, at any time and in its discretion, grant to any Participant the right to receive a cash amount, at such time, in such amount and subject to such terms and conditions as determined by the Committee in its discretion. 4.9 Terms and Conditions of Deferrals. If permitted or required by the Committee, a Participant may or shall defer the receipt of cash or Stock from the exercise or payment of an Award. If a Participant defers receipt, the Company’s obligation to issue the cash or shares of Stock will be reflected in a bookkeeping account. All such deferrals shall be subject to such terms and conditions as the Committee may establish, subject to intended compliance with or exemption from Code Section 409A. (a) Payment. Payment in respect of Deferrals may be made by the Company in cash or shares of Stock, whichever is provided for in the applicable Award Agreement or Award Program. (b) Conditions to Payment. Each Deferral under the Plan shall be payable at such time or times or on the occurrence of such event or events, and in such amounts as the Committee may specify in the applicable Award Agreement or Award Program; provided, however, that subsequent to the date of a Deferral, the Committee may accelerate the time or times at which the Deferral will be paid in whole or in part, subject to intended compliance with or exemption from Code Section 409A. ARTICLE 5. RESTRICTIONS ON STOCK 5.1 Escrow of Shares. Any shares of Stock issued under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a Stock certificate. If a Stock certificate is issued with respect to Restricted Stock, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. The Committee may require that such certificate will be held by a custodian designated by the Committee (the ‘‘Custodian’’), who for the term specified in the applicable Award Agreement, will have the full power and authority in the Participant’s name, place and stead to transfer, assign and convey to the Company 10 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 8808 any shares of Stock held by the Custodian for such Participant, if the Participant forfeits the shares under the terms of the applicable Award Agreement. During the period that shares of Stock remain subject to forfeiture, the Participant is entitled to all rights, except as provided in the applicable Award Agreement, applicable to shares of Stock not so held. 5.2 Restrictions on Transfer. The Participant does not have the right to make or permit to exist any disposition of the shares of Stock issued pursuant to the Plan until such shares are vested except as provided in the Plan or the applicable Award Agreement or Award Program. Any disposition of the shares of Stock issued under the Plan by the Participant not made in accordance with the Plan or the applicable Award Agreement or Award Program will be void. The Company will not recognize, or have the duty to recognize, any disposition not made in accordance with the Plan and the applicable Award Agreement or Award Program, and the shares so transferred will continue to be bound by the Plan and the applicable Award Agreement or Award Program. ARTICLE 6. GENERAL PROVISIONS 6.1 Withholding. The Company shall deduct from all cash distributions under the Plan all taxes required to be withheld by the applicable jurisdiction. Whenever the Company proposes or is required to issue or transfer shares of Stock under the Plan or upon the vesting of any Stock Award, the Company has the right to require the recipient to remit to the Company an amount sufficient to satisfy the taxes required to be withheld by the applicable jurisdiction prior to the delivery of any certificate or certificates for such shares or the vesting of such Stock Award. A Participant may pay the withholding obligation in cash, or, if the applicable Award Agreement or Award Program provides, a Participant may be permitted, or may be required, to have the number of shares of Stock the Participant is to receive reduced by, or with respect to a Stock Award, by tendering back to the Company, a number of whole shares of Stock which, when multiplied by the Fair Market Value of the shares of Stock, is sufficient to satisfy the tax withholding obligation (after taking into account any withholding in cash required because only whole shares of stock can be withheld or tendered), at tax withholding rates determined by the Company to be required, or in the Company’s sole discretion, permitted, but not in excess of the maximum statutory tax rates in the applicable jurisdiction. 6.2 Changes in Capitalization; Merger; Liquidation. (a) Equity Restructuring. The number of shares of Stock reserved for the grant of Awards; the number of shares of Stock reserved for issuance upon the exercise, settlement, or payment, as applicable, of each outstanding Dividend Equivalent Right, Option, Performance Unit Award, Restricted Stock Unit, and Stock Appreciation Right and upon vesting, settlement, or grant, as applicable, of each Stock Award; the Exercise Price of each outstanding Option, the Threshold Price of each outstanding Stock Appreciation Right, and the specified number of shares of Stock to which each outstanding Dividend Equivalent Right, Option, Performance Unit Award, Restricted Stock Unit, Stock Appreciation Right and Stock Award pertains, shall be proportionately adjusted for any nonreciprocal transaction between the Company and the holders of capital stock of the Company that causes the per share value of the shares of Stock underlying a Stock Award to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend (each, an ‘‘Equity Restructuring’’). (b) Other Changes in Capital Structure. In the event of a merger, consolidation, reorganization, extraordinary dividend, spin-off, sale of substantially all of the Company’s assets, other change in capital structure of the Company, tender offer for shares of Stock, or a Change in Control that in each case does not constitute an Equity Restructuring, the Committee may make such adjustments with respect to Awards and take such other action as it deems necessary or appropriate to reflect such merger, consolidation, reorganization or tender offer, including, without limitation, the substitution of new Awards, or the adjustment of outstanding Awards, the 11 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 3 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 34088 P r o x y acceleration of Awards (other than an acceleration not permitted by Section 4.1(g)), the removal of restrictions on outstanding Awards, or the termination of outstanding Awards in exchange for the cash value determined in good faith by the Committee of the vested and/or unvested portion of the Award. Any adjustment pursuant to this Section may provide, in the Committee’s discretion, for the elimination without payment therefor of any fractional shares that might otherwise become subject to any Award, but except as set forth in this Section and Section 4.1(g) may not otherwise diminish the then value of the Award. (c) Substitution. Any adjustment described in this Section may include a substitution in whole or in part of other equity securities of the issuer and the class involved in such Equity Restructuring in lieu of the shares of Stock that are subject to the Award. (d) Plan is not a Limit on Company Powers. The existence of the Plan and the Awards granted pursuant to the Plan shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets, or any other corporate act or proceeding. 6.3 Compliance with Code. All Incentive Stock Options to be granted hereunder are intended to comply with Code Section 422, and all provisions of the Plan and all Incentive Stock Options granted hereunder shall be construed in such manner as to effectuate that intent. All Awards under the Plan are intended to be exempt from or in compliance with Code Section 409A and shall be construed in such manner to effectuate that intent. If an Award, Award Agreement, Award Program, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would cause an Award to fail to satisfy or be exempt from Code Section 409A, then unless the Committee provides otherwise, such Award, Award Agreement, Award Program, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result, and the related provisions of the Award Agreement, Award Program or Plan will be deemed modified, or, if necessary, suspended to comply with or be exempt from Code Section 409A to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant. 6.4 No Representations or Covenants. Although the Company may endeavor to structure an Award to receive favorable U.S. or foreign tax treatment (e.g., under Code Section 422) or to avoid adverse tax treatment (e.g., under Code Section 409A), the Company makes no representation or covenant to that effect, makes no representation or covenant that such tax treatment will apply and expressly disavows any covenant to maintain favorable tax treatment or avoid unfavorable tax treatment. 6.5 Right to Terminate Employment or Service. Nothing in the Plan or in any Award confers upon any Participant the right to continue as an employee, officer, director or consultant of the Company or any of its Affiliates or affects the right of the Company or any of its Affiliates to terminate the Participant’s employment or services at any time. 6.6 Non-Alienation of Benefits. Other than as provided herein, no Award under the Plan may be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge; and any attempt to do so shall be void. No such Award may, prior to settlement and receipt by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the Participant. 6.7 Conditions and Restrictions upon Stock subject to Awards. The Committee may provide that shares of Stock issued under an Award shall be subject to such further restrictions, conditions and 12 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 110D*/120D Foot: 0D/ 0D VJ RSeq: 4 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 57941 limitations as the Committee in its discretion may specify at the time of granting the Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant of any Shares issued under an Award, including without limitation: (a) restrictions under an insider trading policy or pursuant to applicable law, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participants and holders of other Company equity compensation arrangements, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (d) provisions requiring shares of Stock to be sold on the open market or to the Company in order to satisfy tax withholding or other obligations. 6.8 Compliance with Laws. The granting of awards and the issuance of shares of Stock under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or stock exchanges on which the Company’s securities are listed as may be required. The Company shall have no obligation to issue or deliver evidence of title for shares of Stock issued under the Plan before: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and (b) completion of any registration or other qualification of the shares of Stock under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective. The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 6.9 Restrictions on Delivery and Sale of Shares; Legends. Each Award is subject to the condition that if at any time the Committee, in its discretion, shall determine that the listing, registration or qualification of the shares covered by such Award upon any securities exchange or under any state or federal law is necessary or desirable as a condition of or in connection with the granting of such Award or the purchase or delivery of shares thereunder, the delivery of any or all shares pursuant to such Award may be withheld unless and until such listing, registration or qualification shall have been effected. If a registration statement is not in effect under the Securities Act of 1933 or any applicable state securities laws with respect to the shares of Stock purchasable or otherwise deliverable under Awards then outstanding, the Committee may require, as a condition of delivery of Stock pursuant to an Award, that the Participant or other recipient of an Award represent, in writing, that the shares received pursuant to the Award are being acquired for investment and not with a view to distribution and agree that the shares will not be disposed of except pursuant to an effective registration statement, unless the Company shall have received an opinion of counsel that such disposition is exempt from such requirement under the Securities Act of 1933 and any applicable state securities laws. The Company may include on certificates representing shares delivered pursuant to an Award such legends referring to the foregoing representations or restrictions or any other applicable restrictions on resale as the Company, in its discretion, shall deem appropriate. 6.10 Listing and Legal Compliance. The Committee may suspend the exercise or payment of any Award so long as it determines that securities exchange listing or registration or qualification under any securities laws is required in connection therewith and has not been completed on terms acceptable to the Committee. 6.11 Clawback. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the 13 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 230D*/240D Foot: 0D/ 0D VJ RSeq: 5 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 46018 P r o x y misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve (12) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever just occurred) of the financial document embodying such financial reporting requirement. The Plan will be administered in accordance with Section 10D of the Exchange Act, any applicable rules and regulations promulgated by the Securities Exchange Commission and any national securities exchange or national securities association on which shares of Stock may be traded, and any Company policy regarding compensation recoupment. In addition, each Award shall be subject to forfeiture to the extent provided in any applicable clawback policy adopted by the Company or otherwise required pursuant to applicable law. This Section will not be the Company’s exclusive remedy with respect to such matters. 6.12 Awards to Non-U.S. Employees. The Committee shall have the power and authority to determine which Affiliates shall be covered by the Plan and which employees outside the U.S. shall be eligible to participate in the Plan. The Committee may adopt, amend or rescind rules, procedures or sub-plans relating to the operation and administration of the Plan to accommodate the specific requirements of local laws, procedures, and practices. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on death, disability or retirement or on termination of employment; available methods or exercise or settlement of an award; payment of income, social insurance contributions and payroll taxes; the withholding procedures and handling of any stock certificate or other indicia of ownership which vary with local requirements. The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations. 6.13 Indemnification. Subject to requirements of Delaware law, each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3.5, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such action, suit, or proceeding against him, provided such person such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own behalf, unless such loss, cost, liability, or expense is a result of such person’s own willful misconduct or except as expressly provided by Delaware law. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 6.14 Termination and Amendment of the Plan. The Board of Directors at any time may amend or terminate the Plan without stockholder approval; provided, however, that the Board of Directors (a) may condition any amendment on the approval of stockholders of the Company if such approval is necessary or advisable with respect to tax, securities or other applicable laws, and (b) shall obtain stockholder approval for any amendment to the Plan that, except as provided in Section 6.2, increases the number of shares of Stock available under the Plan, materially expands the classes of individuals eligible to receive Awards, materially expands the type of awards available under the Plan, would permit Option Repricing or Stock Appreciation Right Repricing, or would otherwise require stockholder approval under the rules of the applicable stock exchange. No such termination or 14 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8  MERRILL CORPORATION CHE108068// 2-APR-18 15:18 DISK126:[18ZAG1.18ZAG44001]LK44001A.;16 mrll_1116.fmt Free: 4110DM/0D Foot: 0D/ 0D VJ RSeq: 6 Clr: 0 DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;141 3-3 B Cs: 47594 amendment without the consent of the holder of an Award may adversely affect the rights of the Participant under such Award. 6.15 Stockholder Approval. The Plan must be submitted to the stockholders of the Company for their approval within twelve (12) months before or after the adoption of the Plan by the Board of Directors of the Company. If such approval is not obtained, the Prior Plan shall remain in force and effect and any Award granted hereunder will be void. 6.16 Choice of Law. The laws of the State of Delaware shall govern the Plan, to the extent not preempted by federal law, without reference to the principles of conflict or choice of laws that might otherwise refer to the laws of another jurisdiction. NEENAH, INC. By: Title: 15 Neenah Paper, Inc. DEF 14A Proj: P2940ATA18 Job: 18ZAG44001 (18-2940-1) Page Dim: 8.500� X 11.000� Copy Dim: 38. X 54.3 File: LK44001A.;16 v6.8 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________ FORM 10-K _______________________________________________ (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32240 F o r m 1 0 - K (Exact name of registrant as specified in its charter) 31OCT201109101132 Delaware (State or other jurisdiction of incorporation or organization) 3460 Preston Ridge Road Alpharetta, Georgia (Address of principal executive offices) 20-1308307 (I.R.S. Employer Identification No.) 30005 (Zip Code) Registrant's telephone number, including area code: (678) 566-6500 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock — $0.01 Par Value Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act. Yes 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. Yes 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 such 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. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the registrant's common stock held by non-affiliates on June 30, 2017 (based on the closing stock price on the New York Stock Exchange) on such date was approximately $1,175,000,000. As of February 21, 2018, there were 16,883,000 shares of the Company's common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain information contained in the definitive proxy statement for the Company's Annual Meeting of Stockholders to be held on May 23, 2018 is incorporated by reference into Part III hereof. (This page has been left blank intentionally.) TABLE OF CONTENTS Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors and Executive Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and Management Certain Relationships and Related Transactions and Director Independence Principal Accountant Fees and Services Exhibits and Financial Statement Schedule Form 10-K Summary Page 1 12 21 22 23 24 25 27 31 45 47 47 48 48 49 50 51 51 51 52 54 55 F o r m 1 0 - K Part I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Part II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Part III Item 10. Item 11. Item 12. Item 13. Item 14. Part IV Item 15. Item 16. Signatures (This page has been left blank intentionally.) PART I Effective January 1, 2018, Neenah Paper, Inc. changed its name to Neenah, Inc. In this report, unless the context requires otherwise, references to "we," "us," "our," "Neenah" or the "Company" are intended to mean Neenah, Inc., its consolidated subsidiaries and predecessor companies. The Company's ticker symbol on the New York Stock Exchange remains "NP" and names of subsidiaries were not affected. Item 1. Business Overview F o r m 1 0 - K We are a specialty materials company organized into two primary businesses: a performance-based technical products business and a premium fine paper and packaging business. Our technical products business is a leading international producer of transportation, water and other filter media and durable, saturated and coated substrates for a variety of end markets. We focus on categories where we believe we are, or can be, a market leader. These categories include filtration media for transportation, water and other uses, backings for specialty tapes and abrasives, performance labels, digital image transfer, and other specialty markets. Our dedicated technical products manufacturing facilities are located near Munich, Germany, Eerbeek, Netherlands, Bolton, England, Munising, Michigan, and Pittsfield, Massachusetts. In addition, certain technical products are manufactured along with fine paper and packaging products in shared facilities located in upstate New York, Brattleboro, Vermont, and Quakertown, Pennsylvania. In 2017, a filtration machine (which was converted from a fine paper machine) and adjacent saturating plant began production in Appleton, Wisconsin, a site also shared with the fine paper and packaging business. On November 1, 2017, we completed the acquisition of W.A. Sanders Coldenhove Holding B.V. ("Coldenhove" and the "Coldenhove Acquisition") for approximately $45 million. Coldenhove is a specialty materials manufacturer based in the Netherlands, with a leading position in digital transfer media and other technical products. We believe our fine paper and packaging business is the leading supplier of premium printing, packaging, and other high end specialty papers in North America. Our products include some of the most recognized and preferred brands in North America, where we enjoy leading market positions in many of our product categories. We sell our products primarily to 1 authorized paper distributors, as well as through converters, major national retailers and specialty businesses. Our primary fine paper and packaging manufacturing facilities are located in Neenah and Whiting, Wisconsin and in Brattleboro, Vermont. Certain products are manufactured in shared facilities located in upstate New York, Brattleboro, Vermont, and Quakertown, Pennsylvania, as well as a site shared with technical products in 2017 in Appleton, Wisconsin. In August 2017, we purchased a laminating asset in Great Barrington, Massachusetts to support continued growth in our premium packaging business. For a description of the shared facilities, see Item 2, "Properties." Company Structure Our corporate structure consists of Neenah, Inc. and eight direct wholly owned subsidiaries. Neenah, Inc. is a Delaware corporation that holds our trademarks and patents related to all of our U.S. businesses (except Neenah Paper FVC, Inc), all of our U.S. fine paper and packaging inventory, the real estate, mills and manufacturing assets associated with our fine paper and packaging operations in Neenah and Whiting, Wisconsin and all of the equity in our subsidiaries listed below. The common stock of Neenah is publicly traded on the New York Stock Exchange under the symbol "NP." Neenah Paper Michigan, Inc. is a Delaware corporation and a wholly owned subsidiary of Neenah that owns the real estate, mill and manufacturing assets associated with our U.S. technical products business in Munising, Michigan. Neenah Paper FVC, LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that owns all of the equity of Neenah Paper FR, LLC. Neenah Paper FR, LLC ("Fox River") is a Delaware limited liability company that owns the real estate, mill and manufacturing assets associated with our fine paper and packaging operation in Appleton, Wisconsin and leases the real estate and owns the manufacturing assets associated with our fine paper and packaging operations in Great Barrington, Massachusetts. Neenah Paper International Holding Company, LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that owns all of the equity of Neenah Paper International, LLC. Neenah Paper International, LLC is a Delaware limited liability company that owns all of the equity of Neenah Germany GmbH and in conjunction with Neenah Germany GmbH all of the equity of Neenah Services GmbH & Co. KG. NPCC Holding Company LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that owns all of the equity of Neenah Paper Company of Canada ("Neenah Canada"). Neenah Canada is a Nova Scotia unlimited liability corporation that holds certain post-employment liabilities of our former Canadian operations. Neenah Paper International Finance Company BV is a private company with limited liability organized under the laws of the Netherlands and a wholly owned subsidiary of Neenah that facilitates the financing of our international operations. Neenah Filtration, LLC is a Delaware limited liability company and wholly owned subsidiary of Neenah that owns all of the equity of Neenah Technical Materials, Inc. ("NTM") and Neenah Filtration Appleton, LLC ("NFA"). NTM is a Massachusetts corporation that owns all of the real estate, mills and manufacturing assets associated with our technical materials business in Pittsfield, Massachusetts. NFA is a Delaware limited liability company that owns certain assets associated with our filtration business in Appleton, Wisconsin. The filtration assets in Appleton, Wisconsin have started production in January 2017. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources." Neenah FMK Holdings, LLC is a Delaware limited liability company and a wholly owned subsidiary of Neenah that owns all of the equity of ASP FiberMark, LLC ("ASP"). ASP is a Delaware limited liability company that owns all of the equity of Neenah Northeast, LLC ("NNE") and Neenah International UK Limited, a United Kingdom corporation ("Neenah UK"). NNE is a Delaware limited liability company that owns certain real estate, mills and manufacturing assets associated with our fine paper and packaging business and technical products business located in Brattleboro, Vermont, West Springfield, Massachusetts, Quakertown and Reading, Pennsylvania, and Brownville and Lowville, New York. Neenah UK is a United Kingdom corporation that owns all of the equity of Neenah Red Bridge International Limited ("Red Bridge"). Red Bridge is a United Kingdom corporation that owns all of the real estate, manufacturing assets and inventory associated with our technical products business in Bolton, England. 2 Neenah Global Holdings B.V. is a private company with limited liability organized under the laws of the Netherlands and a wholly owned subsidiary of Neenah that owns all of the equity of W.A. Sanders Coldenhove Holding BV ("Coldenhove Holding"). Coldenhove Holding is a private company with limited liability organized under the laws of the Netherlands that owns all of the equity of W.A. Sanders Papierfabriek "Coldenhove" BV ("Neenah Coldenhove"). Neenah Coldenhove a private company with limited liability organized under the laws of the Netherlands that owns substantially all of real estate, manufacturing assets and inventory associated with our technical products business in Eerbeek, Netherlands. History of the Businesses Neenah was incorporated in April 2004 in contemplation of the spin-off by Kimberly-Clark Corporation ("Kimberly- Clark") of its technical products and fine paper businesses in the United States and its Canadian pulp business (collectively, the "Pulp and Paper Business"). We had no material assets or activities until Kimberly-Clark's transfer to us of the Pulp and Paper business on November 30, 2004. On that date, Kimberly-Clark completed the distribution of all of the shares of our common stock to the stockholders of Kimberly-Clark (the "Spin-Off"). Following the Spin-Off, we are an independent public company and Kimberly-Clark has no ownership interest in us. Former Pulp Operations. At the Spin-Off, our pulp operations consisted of mills located in Terrace Bay, Ontario and Pictou, Nova Scotia and approximately 975,000 acres of related woodlands. We disposed of these mills and woodlands in a series of transactions from 2006 to 2010. Technical Products. The Munising, Michigan mill was purchased by Kimberly-Clark in 1952. Subsequent to the purchase, the mill was converted to produce durable, saturated and coated papers for sale and use in a variety of industrial applications for our technical products business. In October 2006, we purchased the outstanding interests of FiberMark Services GmbH & Co. KG and the outstanding interests of FiberMark Beteiligungs GmbH (collectively "Neenah Germany"). At acquisition, the Neenah Germany assets consisted of two mills located near Munich, Germany and a third mill near Frankfurt, Germany. These mills produced a wide range of products, including transportation filter media, nonwoven wall coverings, masking and other tapes, abrasive backings, and specialized printing and coating substrates. In October 2015, we sold our paper mill located near Frankfurt, Germany (the "Lahnstein Mill") to the Kajo Neukirchen Group (the "Buyer"). The Lahnstein Mill had been operating as a stand-alone business, manufacturing non-woven wallcoverings and various other specialty papers. See Note 13 of Notes to Consolidated Financial Statements, "Discontinued Operations." F o r m 1 0 - K In July 2014, we purchased all of the outstanding equity of Crane Technical Materials, Inc. from Crane & Co., Inc. The acquired business provides performance-oriented wet laid nonwoven media for water filtration end markets as well as environmental, energy and industrial uses. The business has two manufacturing facilities in Pittsfield, Massachusetts. On November 1, 2017, we purchased all of the outstanding equity of Coldenhove. The acquired business is a specialty materials manufacturer based in the Netherlands, with a leading position in digital transfer media and other technical products. The business has one manufacturing facility in Eerbeek, Netherlands. See Note 4 of Notes to Consolidated Financial Statements, "Acquisitions." Fine Paper and Packaging. The fine paper and packaging business was incorporated in 1885 as Neenah Paper Company, which initially operated a single paper mill in Neenah, Wisconsin. Kimberly-Clark acquired the mill in 1956. In 1981, Kimberly-Clark purchased an additional mill located in Whiting, Wisconsin and in the late 1980s and early 1990s, the capacity of the fine paper and packaging business was expanded by building two new paper machines at the Whiting mill and completing a major expansion of the Neenah facility with the installation of a new paper machine, finishing center, customer service center and an expanded distribution center. In the first of the series of consolidating acquisitions, in March 2007, we acquired the assets and brands of Fox River. In January 2012, we purchased certain premium fine paper brands and other assets from Wausau Paper Mills, LLC, a subsidiary of Wausau Paper Corp. ("Wausau") and in January 2013, we purchased certain premium business paper brands from the Southworth Company ("Southworth"). In August 2017, we purchased a laminating asset in Great Barrington, Massachusetts to support continued growth in our premium packaging business. FiberMark Acquisition. On August 1, 2015, we purchased all of the outstanding equity of ASP FiberMark, LLC ("FiberMark") from ASP FiberMark Holdings, LLC ("American Securities") for approximately $118 million (the 3 "FiberMark Acquisition"). We added specialty coating and finishing capabilities with this acquisition, particularly in luxury packaging and technical products. The results of operations and assets related to the FiberMark Acquisition are reflected in each of our business segments. Business Strategy Our mission is to create value by improving the image and performance of everything we touch. We expect to create value by growing in specialized niche markets that value performance or image and where we have competitive advantages. In managing our businesses, we believe that achieving and maintaining a leadership position in our markets, responding effectively to customer needs and competitive challenges, employing capital optimally, controlling costs, and managing risks are important to our long-term success. Strategies to deliver value include: Enhance our leading positions in high value core categories — We will increase our participation in niche markets that can provide us with leading positions and value our core competencies in performance-based fiber and non-woven media production, coating and saturating. Key markets include transportation filtration, specialty backings and technical products, and premium fine paper and packaging. Increasing our size, growth rate and portfolio diversification — We will invest and focus resources in higher growth specialty markets such as filtration, digital image transfer, and premium packaging, to grow with customers in new products and geographies and to enter into adjacent markets that are growing and profitable. We will do this both through organic initiatives that build on our technologies and capabilities, and through acquisitions that fit with our competencies and provide attractive financial returns. Delivering consistent, attractive returns to our shareholders — We will continue to use Return on Invested Capital ("ROIC") as a key metric to evaluate investment decisions, measure our performance, maintain a prudent capital structure and deploy cash flows in ways that can provide value, including direct cash returns to shareholders through a meaningful dividend. Products Technical Products. Our technical products business is a leading international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers, such as filtration media for transportation, water and other filtration markets, and saturated and coated performance materials used for industrial backings, labels, digital image transfer, and a variety of other end markets. In general, our technical products are sold to other manufacturers as key components for their finished products. Many of our key market segments served, including filtration and specialty backings for tape and abrasives, are global in scope. JET-PRO®SofStretchTM , KIMDURA®, PREVAILTM, NEENAH®, and GESSNER® are brands of our technical products business. The following is a description of certain key products and markets: Filtration media for transportation including induction air, fuel, oil, and cabin air applications. Transportation filtration media are sold to suppliers of automotive companies as original equipment on new cars and trucks as well as to the automotive aftermarket, which represents the large majority of sales. Filtration media for water and other industrial end markets. Primary applications include reverse osmosis, catalytic conversion, nanofiltration, ultrafiltration, pervaporation and vapor permeation, as well as other applications for specialty markets. Specialty backings including a) saturated and unsaturated crepe and flat paper tapes sold to manufacturers to produce finished pressure sensitive products for sale in automotive, transportation, manufacturing, building construction, and industrial general purpose applications, including sales in the consumer do-it-yourself retail channel and b) coated lightweight abrasive paper used in the automotive, construction, metal and woodworking industries for both dry and wet sanding applications. Digital image transfer media is used to transfer digital images onto clothing, sportswear, and other materials. A fiber-based sheet undergoes various coatings to impart required performance. 4 Label and tag products made from both saturated base label stock and purchased synthetic base label stock, with coatings applied to allow for high quality variable and digital printing. The synthetic label stock is recognized as a high quality, UV (ultra-violet) stable product used for outdoor applications. Label and tag stock is sold to pressure sensitive coaters, who in turn sell the coated label and tag stock to the label printing community. Other latex saturated and coated papers for use by a wide variety of manufacturers. Premask paper is used as a protective over wrap for products during the manufacturing process and for applying signs, labeling and other finished products. Medical packaging paper is a polymer impregnated base sheet that provides a breathable sterilization barrier that provides unique properties. Digital transfer papers used to transfer ink or images from paper to clothing, hats, coffee mugs, and other surfaces using a proprietary imaging coating for use in digital printing applications. Publishing and security papers used to produce book covers, stationery, fancy packaging and passports. Other specialty products include clean room papers, durable printing papers, release papers and furniture backers. Fine Paper and Packaging. Our fine paper and packaging business manufactures and sells world-class branded premium writing, text, cover and specialty papers and envelopes used in high end commercial printing services, corporate identity packages, and advertising collateral. In addition, we produce premium packaging and wide format applications. Often these papers are characterized by distinctive coating, finishing, colors, and textures. Commercial printing papers include premium writing, text and cover papers, and envelopes. Uses include advertising collateral, stationery, corporate identity packages and brochures, pocket folders, annual reports, advertising inserts, direct mail, business cards, scrapbooks, and a variety of other uses where colors, texture, coating, unique finishes or heavier weight papers are desired. Our market leading brands in this category include CLASSIC®, CLASSIC CREST®, ESSE®, ENVIRONMENT®, CAPITOL BOND®, ROYAL SUNDANCE®, SOUTHWORTH®, and TOUCHE® trademarks. Our fine paper and packaging business has an exclusive agreement to manufacture, market and distribute Crane & Co.'s CRANE'S CREST®, CRANE'S BOND®, and CRANE'S LETTRA®, branded fine papers in the commercial print category. Our fine paper and packaging business has an exclusive agreement to market and distribute Gruppo Cordenons SpA's SO...SILK®, PLIKE® and STARDREAM® branded fine papers in the U.S. and Canada. The fine paper and packaging business also sells private watermarked paper and other specialty writing, text, and cover papers. Additionally, the fine paper and packaging business provides leading solutions in the wide format arena, led by its Neenah Wide Format® and CONVERD® brands. Premium packaging products are used for wine, spirits and beer labels, folding cartons, box wrap, bags, hang tags, and stored value cards servicing high-end retail, cosmetics, spirits, and electronics end-use markets. Our market leading brands in these categories include NEENAH® Folding Board, "ESTATE LABEL®, Neenah® Box Wrap, PELLAQ®, KIVAR®, SKIVERTEX®, ILLUSIO®, and SENZO®. Bright papers are used in applications such as direct mail, advertising inserts, scrapbooks and marketing collateral. Our brands in this category include ASTROBRIGHTS® and CREATIVE COLLECTIONTM. Additionally, business papers for professionals and small businesses are sold under our Southworth® brand through major retailers. The fine paper and packaging business also produces and sells other specialty papers such as translucent papers, art papers, papers for optical scanning and other specialized applications. Markets and Customers Technical Products. The technical products business sells its products globally to other manufacturers who convert our product for sale into product categories generally used as base materials in the following applications: filtration, component backing materials for manufactured products such as tape and abrasives, and other specialized product uses such as graphics and identification. Several products (filtration media, abrasives, specialty tapes, labels) are used in markets that are directly affected by economic business cycles. Other market segments such as image transfer papers used in small/home office and consumer applications are relatively stable. Most products are performance-based and require qualification at customers; however, certain categories may also be subject to price competition and the substitution of lower cost substrates in some less demanding applications. 5 F o r m 1 0 - K The technical products business relies on a team of direct sales representatives and customer service representatives to market and sell approximately 95 percent of its sales volume directly to customers and converters. The technical products business has more than 500 customers worldwide. The distribution of sales in 2017 was approximately 47 percent in North America, 36 percent in Europe and 17 percent in Latin America and Asia. Customers typically convert and transform base papers and film into finished rolls and sheets by adding adhesives, coatings, and finishes. These transformed products are then sold to end-users. Sales to the technical products business's three largest customers combined represented approximately 15 percent of total sales for the segment in 2017. Although a complete loss of any of these customers would cause a temporary decline in the business's sales volume, the decline could be partially offset by expanding sales to existing customers, and further offset over a several month period with the addition of new customers. Fine Paper and Packaging. We believe our fine paper and packaging business is the leading supplier of premium writing, text and cover papers, bright papers and specialty papers in North America. These products are used in high-end collateral material, business and legal professions, and corporate identity products. Our premium packaging business includes products such as food and beverage labels and high-end packaging materials such as folding cartons and box wrap used for luxury retail goods. Bright papers are generally used by consumers for flyers, direct mail and packaging. The fine paper and packaging business sells its products in a variety of channels including authorized paper distributors, converters, retailers, and direct to end users. Sales to distributors account for approximately 60 percent of revenue in the fine paper and packaging business. During 2017, approximately 10 percent of the sales of our fine paper and packaging business were exported to markets outside the United States. Sales to each of the two largest customers of the fine paper and packaging business represented approximately 15 percent of its total sales in 2017. We practice limited sales distribution to improve our ability to control the marketing of our products. Although a complete loss of these customers would cause a temporary decline in the business's sales volume, the decline could be partially offset by expanding sales to existing customers, and further offset over a several month period with the addition of new customers. Concentration. For the year ended December 31, 2017, sales to each of Veritiv and CNG represented approximately 7 percent of consolidated net sales and approximately 15 percent of net sales of the fine paper and packaging business. For the year ended December 31, 2016 and 2015 sales to Veritiv represented approximately 8 percent and 10 percent, respectively, of consolidated net sales and approximately 15 percent and 20 percent, respectively, of net sales of the fine paper and packaging business. 6 The following graphs present further information about our businesses by geographic area and product line (dollars in millions): Net Sales from Geographic Region (in Millions) Net Sales by Product Line (in Millions) F o r m 1 0 - K 7 Net sales are attributed to geographic areas based on the physical location of the selling entities and the physical location of the assets. See Note 14 of Notes to Consolidated Financial Statements, "Business Segment and Geographic Information", for information with respect to net sales, profits and long-lived assets by business segment. Raw Materials Technical Products. Softwood pulp, specialty pulp and fibers, and latex are the primary raw materials consumed by our technical products business. The technical products business purchases softwood pulp, specialty pulp and fibers, and latex from various external suppliers. We believe that all of the raw materials for our technical products operations, except for certain specialty latex grades and specialty softwood pulp, are readily available from several sources and that the loss of a single supplier would not cause a shutdown of our manufacturing operations. Our technical products business acquires all of its specialized pulp requirements from two global suppliers and certain critical specialty latex grades from four suppliers. In general, these supply arrangements are covered by formal contracts, and represent multi-year business relationships that have historically been sufficient to meet our needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of an interruption of production at any one supplier, we believe that each of these suppliers individually would be able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp grades or other latex grades that would allow us to meet required product performance characteristics and incur only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative pulp or latex grades would have a material effect on our operations. Fine Paper and Packaging. Hardwood pulp is the primary raw material used to produce products of the fine paper and packaging business. Other significant raw material inputs in the production of fine paper and packaging products include softwood pulp, recycled fiber, cotton fiber, dyes and fillers. The fine paper and packaging business purchases all of its raw materials externally. We believe that all of the raw materials for our fine paper and packaging operations are readily available from several sources and that the loss of a single supplier would not cause a shutdown of our manufacturing operations. Energy and Water The equipment used to manufacture the products of our technical products and fine paper and packaging businesses uses significant amounts of energy, primarily electricity, natural gas, oil and coal. We generate substantially all of our electrical energy at the Munising mill and approximately 25 percent of the electrical energy at our mills in Appleton, Wisconsin and Bruckmühl, Germany. We also purchase electrical energy from external sources, including electricity generated from renewable sources. Availability of energy is not expected to be a problem in the foreseeable future, but the purchase price of such energy can and likely will fluctuate significantly based on changes in demand and other factors. An adequate supply of water is needed to manufacture our products. We believe that there is an adequate supply of water for this purpose at each of our manufacturing locations. Working Capital Technical Products. The technical products business maintains approximately 25 to 30 days of raw materials and supplies inventories to support its manufacturing operations and approximately 25 to 35 days of finished goods and semi-finished goods inventory to support customer orders for its products. Sales terms in the technical products business vary depending on the type of product sold and customer category. Extended credit terms of up to 120 days are offered to customers located in certain international markets. In general, sales are collected in approximately 45 to 55 days and supplier invoices are paid within 20 to 30 days. Fine Paper and Packaging. The fine paper and packaging business maintains approximately 10 days of raw material inventories to support its paper making operations and about 55 days of finished goods inventory to fill customer orders. 8 Fine paper and packaging sales terms range between 20 and 30 days with discounts of zero to two percent for customer payments, with discounts of one percent and 20-day terms used most often. Extended credit terms are offered to customers located in certain international markets. Supplier invoices are typically paid within 60 days. Competition Technical Products. Our technical products business competes in global markets with a number of large multinational competitors, including Ahlstrom-Munksjö, ArjoWiggins SAS and Hollingsworth & Vose Company. It also competes in some, but not all, of these segments with smaller regional manufacturers, such as Monadnock Paper Mills, Inc., Expera Specialty Solutions LLC., Potsdam Specialty Paper, Inc. and Paper Line S.p.A. We believe the basis of competition in most of these segments are the ability to design and develop customized product features to meet customer performance specifications while maintaining quality, customer service and price. We believe our research and development program gives us an advantage in customizing base papers and developing advanced filter media to meet customer needs. Fine Paper and Packaging. We believe our fine paper and packaging business is the leading supplier of premium printing and other high end specialty papers in North America. Our fine paper and packaging business also competes in the premium segment of the uncoated free sheet market. The fine paper and packaging business competes directly in North America with Mohawk Fine Paper Inc. and other smaller companies. We believe the primary basis of competition for premium fine papers are brand recognition, product quality, customer service, product availability, promotional support and variety of colors and textures. Price also can be a factor particularly for lower quality printing needs that may compete with opaque and offset papers. We have and will continue to invest in advertising and other programs aimed at graphic designers, printers and corporate end-users in order to maintain a high level of brand awareness as well as communicate the advantages of using our products. Our premium packaging business is focused on high-end packaging needs in end market verticals like beauty products, spirits and retail. Primary bases of competition are similarly brand recognition, product quality, customer service, product availability, and a variety of colors and textures. Premium packaging is primarily a North American business, but we also sell to customers in Asia and other markets outside the U.S. We believe the premium packaging market to be highly fragmented, with multiple competitors, many of which produce premium packaging products as a small subset of larger packaging operations. F o r m 1 0 - K Research and Development Our technical products business maintains research and development laboratories in Feldkirchen-Westerham, Germany, Eerbeek, Netherlands, Munising, Michigan and Pittsfield, Massachusetts to support its strategy of developing new products and technologies, and to support growth in its existing product lines and other strategically important markets. We also have a research and development laboratory in West Springfield, Massachusetts that supports both our technical products and fine paper and packaging businesses. We have continually invested in product research and development with spending of $8.9 million in 2017, $9.4 million in 2016 and $6.8 million in 2015. Intellectual Property We own more than 100 granted patents and have multiple pending patent applications in the United States, Canada, Europe and certain other countries covering image transfer paper, abrasives and medical packaging, and other paper processing. We also own more than 150 trademarks with registrations in approximately 80 countries. Our image transfer patents have contributed to establishing the technical products business as a leading global supplier of image transfer papers through our highly recognized JET-PRO®, 3G JET-OPAQUE®, TECHNIPRINT®, LASER-ONE OPAQUE® and IMAGE CLIP® brands. The KIMDURA® and MUNISING LP® trademarks have also made a significant contribution to the marketing of synthetic film and clean room papers of the technical products business. And with Neenah’s recent acquisition of Coldenhove Papier, Neenah added more depth and strength to its technical products portfolio with the well-recognized dye- sublimation and digital decor JETCOL® and DIGICOL® brands, which are also supported by patented technology. For more than 100 years, Neenah’s fine paper and packaging business has built its market leading reputation on creating and manufacturing trademarked brands for premium writing, text, cover, digital, packaging, and specialty needs. The Neenah signature portfolio includes innovative, market leading brands such as CLASSIC® (including CLASSIC 9 CREST®, CLASSIC® Linen, CLASSIC® Laid, CLASSIC COLUMNS®, CLASSIC® Stipple, CLASSIC® Woodgrain, and CLASSIC® Techweave), ASTROBRIGHTS®, ENVIRONMENT®, The Design Collection, ROYAL SUNDANCE®, SOUTHWORTH® and many more. Our fine paper and packaging business provides unique and sustainable packaging papers and custom solutions for premium packaging needs. With brands that stand for consistency and quality such as NEENAH® Folding Board, NEENAH® Box Wrap, ESTATE LABEL®, BELLA® Label, and NEENAH IMAGEMAX® Paper Card, our fine paper and packaging business enables leading and emerging brands to deliver on their promise. Our fine paper and packaging business maintains a well-rounded and well-respected portfolio of brands allowing us to be recognized as an industry leader setting standards for quality, consistency, and dependability on press. Our 2015 acquisition of FiberMark added additional trademarks recognized in both the publishing and packaging markets, including SKIVERTEX®, KIVAR®, CORVON®, HYFLEX®, TOUCHE®, and MULTICOLOR®. Development work after the acquisition added the MONTELENA® mark to our portfolio as well. Finally, the GESSNER® trademark has played an important role in the marketing of Neenah’s filtration product lines. With the expansion of our newest filtration facility in Appleton, WI, Neenah expects increased recognition of this brand domestically and internationally. Backlog and Seasonality Technical Products. In general, sales and profits for the technical products business have been relatively stronger in the first half of the year with reductions in the third quarter due to reduced customer converting schedules and in the fourth quarter due to a reduction in year-end inventory levels by our customers. The order flow for the technical products business is subject to seasonal peaks for several of its products, such as the larger volume grades of specialty tape, abrasives, premask, and label stock used primarily in the downstream finished goods manufacturing process. To assure timely shipments during these seasonal peaks, the technical products business provides certain customers with finished goods inventory on consignment. Historically, consignment sales have represented approximately 15 percent of the technical products business's annual sales. Orders are typically shipped within six to eight weeks of receipt of the order. However, the technical products business periodically experiences periods where order entry levels surge, and order backlogs can increase substantially. Raw materials are purchased and manufacturing schedules are planned based on customer forecasts, current market conditions and individual orders for custom products. The order backlog in the technical products business on December 31, 2017 was approximately $122.1 million and represented approximately 24 percent of current year sales. The order backlog in the technical products business on December 31, 2016 was approximately $101 million and represented approximately 22 percent of prior year sales. We previously filled the order backlog from December 31, 2016 and expect to fill the order backlog from December 31, 2017 within the next year. Fine Paper and Packaging. The fine paper and packaging business has historically not experienced seasonality. Orders for stock products are typically shipped within two days, while custom orders are shipped within two to three weeks of receipt. Raw material purchases and manufacturing schedules are planned based on a combination of historical trends, customer forecasts and current market conditions. The order backlogs in the fine paper and packaging business on December 31, 2017 and 2016 were $19.9 million and $19.6 million, respectively, which represent approximately 15 days of sales. The order backlogs from December 31, 2017 and 2016 were filled in the respective following years. The operating results for each of our businesses are influenced by the timing of our annual maintenance downs, which are generally scheduled in the third quarter. Employee and Labor Relations As of December 31, 2017, we had approximately 2,612 regular full-time employees of whom 1,174 hourly and 578 salaried employees were located in the United States and 431 hourly and 429 salaried employees were located in Europe. Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the "IG BCE"). In June 2017, the IG BCE and a national trade association representing all employers in the industry signed a collective bargaining agreement covering union employees of Neenah Germany that expires in February 2019. Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of 10 employees covered by the collective bargaining agreement with the IG BCE that expires in February 2019 cannot be determined. As of December 31, 2017, 668 employees are covered under collective bargaining agreements that expire in the next 12 months, with the exception of the employees covered by the collective bargaining arrangement with the IG BCE. We believe we have satisfactory relations with our employees covered by collective bargaining agreements and do not expect the negotiation of new collective bargaining agreements to have a material effect on our results of operations or cash flows. See Note 12 of Notes to Consolidated Financial Statements, "Contingencies and Legal Matters — Employees and Labor Relations." Environmental, Health and Safety Matters Our operations are subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters. We believe our operations are in compliance with, or we are taking actions designed to ensure compliance with, these laws, regulations and ordinances. However, the nature of our operations exposes us to the risk of claims concerning non-compliance with environmental, health and safety laws or standards, and there can be no assurance that material costs or liabilities will not be incurred in connection with those claims. Except for certain orders issued by environmental, health and safety regulatory agencies with which we believe we are in compliance and which we believe are immaterial to our financial condition, results of operations and liquidity, we are not currently named as a party in any judicial or administrative proceeding relating to environmental, health and safety matters. Greenhouse gas ("GHG") emissions have increasingly become the subject of political and regulatory focus. Concern over potential climate change, including global warming, has led to legislative and regulatory initiatives directed at limiting GHG emissions. In addition to certain federal proposals in the United States to regulate GHG emissions, Germany, the United Kingdom (“U.K.”) and all the states in which we operate are currently considering GHG legislation or regulations, either individually and/or as part of regional initiatives. While not all are likely to become law it is reasonably possible that additional climate change related mandates will be forthcoming, and it is expected that they may adversely impact our costs by increasing energy costs and raw material prices, requiring operational or equipment modifications to reduce emissions and creating costs to comply with regulations or to mitigate the financial consequences of such compliance. While we have incurred in the past several years, and will continue to incur, capital and operating expenditures in order to comply with environmental, health and safety laws, regulations and ordinances, we believe that our future cost of compliance with environmental, health and safety laws, regulations and ordinances, and our exposure to liability for environmental, health and safety claims will not have a material effect on our financial condition, results of operations or liquidity. However, future events, such as changes in existing laws and regulations, new legislation to limit GHG emissions or contamination of sites owned, operated or used for waste disposal by us (including currently unknown contamination and contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on our financial condition, results of operations or liquidity. We have planned capital expenditures to comply with environmental, health and safety laws, regulations and ordinances during the period 2018 through 2019 of approximately $1 million to $2 million annually. Our anticipated capital expenditures for environmental projects are not expected to have a material effect on our financial condition, results of operations or liquidity. F o r m 1 0 - K AVAILABLE INFORMATION We are subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. As such, we file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission ("SEC"). Our SEC filings are available to the public on the SEC's web site at www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our common stock is traded on the New York Stock Exchange under the symbol NP. You may inspect the reports, proxy statements and other information concerning us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Our web site is www.neenah.com. Information on our web site is not incorporated by reference in this document. Our reports on Form 10-K, Form 10-Q and Form 8-K, as well as amendments to those reports, are and will be available free of 11 charge on our web site as soon as reasonably practicable after we file or furnish such reports with the SEC. In addition, you may request a copy of any of these reports (excluding exhibits) at no cost upon written request to us at: Investor Relations, Neenah, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005. Item 1A. Risk Factors You should carefully consider each of the following risks and all of the other information contained in this Annual Report on Form 10-K. Some of the risks described below relate principally to our business and the industry in which we operate, while others relate principally to our indebtedness. The remaining risks relate principally to the securities markets generally and ownership of our common stock. Our business, financial condition, results of operations or liquidity could be materially affected by any of these risks, and, as a result, the trading price of our common stock could decline. The risks described below are not the only ones we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Risks Related to Our Business and Industry Our business will suffer if we are unable to effectively respond to decreased demand for some of our products due to conditions in the global economy or secular pressures in some markets. We have experienced and may experience in the future decreased demand for some of our products due to slowing or negative global economic growth, uncertainty in credit markets, declining consumer and business confidence, fluctuating commodity prices, increased unemployment and other challenges affecting the global economy. Parts of our fine paper and packaging business are subject to electronic substitution and, for fine paper products in particular, are in secular decline. Our efforts to offset these declines with new fine paper and packaging products and growth in existing fine paper and office products categories are not certain to fully offset the market declines, and evaluation of scope our manufacturing footprint may be required in the future. In addition, our customers may experience deterioration of their businesses, cash flow shortages, and difficulty obtaining financing. If we are unable to implement business strategies to effectively respond to decreased demand for our products, our financial position, cash flows and results of operations would be adversely affected. Changes in international geopolitical and macro economic conditions generally, and particularly in Germany, could adversely affect our business and results of operations. Fluctuations in the prices of and the demand for products could result in smaller profit margins and lower sales volumes. Our operating results and business prospects could be adversely affected by risks related to the countries outside the United States in which we have manufacturing facilities or sell our products, including Germany, the Eurozone and the U.K. Downturns in economic activity, adverse tax consequences, fluctuations in the value of local currency versus the U.S. dollar, or any change in social, political, macro economic or labor conditions in any of these countries or regions could negatively affect our financial results. Historically, economic and market shifts, and fluctuations in capacity have created cyclical changes in prices, sales volume and margins for products in the paper, packaging and related industries. The length and magnitude of industry cycles have varied over time and by product, but generally reflect changes in macroeconomic conditions and levels of industry capacity. The overall levels of demand for many of our products reflect fluctuations in levels of end-user demand, which depend in large part on general macroeconomic conditions in North America and regional economic conditions in our markets (including Europe, Asia, and Central and South America), as well as foreign currency exchange rates. The foregoing factors could materially and adversely impact our sales, cash flows, profitability and results of operations. The availability of and prices for raw materials, energy and transportation services will significantly impact our business. We purchase a substantial portion of the raw materials, energy, transportation and distribution services (primarily over-the- road freight) and other inputs necessary to produce our products on the open market, and, as a result, the price and other terms of those purchases are subject to change based on factors such as worldwide supply and demand and government regulation. We do not have significant influence over our raw material, energy or transportation prices and our ability to 12 pass increases in those prices along to purchasers of our products may be challenged, unless those increases coincide with increased demand for the product. Therefore, raw material, energy, transportation and other input prices could increase at the same time that prices for our products are steady or decreasing. In addition, we may not be able to recoup other cost increases we may experience, such as those resulting from inflation or from increases in wages or salaries, health care, pension or other employee benefits costs, insurance costs and other costs. Our technical products business acquires certain of its specialized pulp requirements from two global suppliers and certain critical specialty latex grades from a limited number of suppliers. In general, these supply arrangements are covered by formal contracts and represent multi-year business relationships that have historically been sufficient to meet our needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of an interruption of production at any one supplier, we believe that each of these suppliers individually would be able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp grades or other latex grades that would allow us to meet required product performance characteristics and incur only a limited disruption in our production. Our fine paper and packaging business acquires a substantial majority of the cotton fiber used in the production of certain branded bond paper products pursuant to annual agreements with two North American producers. The balance of our cotton fiber requirements are acquired through "spot market" purchases from a variety of other producers. We believe that a partial or total disruption in the production of cotton fibers at our two primary suppliers would increase our reliance on "spot market" purchases with a likely corresponding increase in cost. Our operating results are likely to fluctuate. Our operating results are subject to substantial quarterly and annual fluctuations due to a number of factors, many of which are beyond our control. Operating results could be adversely affected by general economic conditions causing a downturn in the market for paper products. Additional factors that could affect our results include, among others, changes in the market price of pulp, other raw materials and distribution/transportation services, the effects of competitive pricing pressures, production capacity levels and manufacturing yields, availability and cost of products from our suppliers, the gain or loss of significant customers, our ability to develop, introduce and market new products and technologies on a timely basis, changes in the mix of products produced and sold, seasonal customer demand, the relative strength of the Euro versus the U.S. dollar, increasing interest rates and environmental costs. The timing and effect of the foregoing factors are difficult to predict, and these or other factors could materially adversely affect our quarterly or annual operating results. F o r m 1 0 - K We face many competitors, several of which have greater financial and other resources. We face competition in each of our business segments from companies that produce the same type of products that we produce or that produce lower priced alternative products that customers may use instead of our products. Some of our competitors have greater financial, sales and marketing, or research and development resources than we do. Greater financial resources and product development capabilities may also allow our competitors to respond more quickly to new opportunities or changes in customer requirements. Our businesses are significantly dependent on sales to their largest customers. Sales to the two largest customers of the fine paper and packaging business each represented approximately 15 percent of total sales for the segment in 2017. Sales to the three largest customers of the technical products business combined represented approximately 15 percent of total sales for the segment in 2017. A significant loss of business from any of our major fine paper and packaging or technical products customers may have a material adverse effect on our financial condition, results of operations and liquidity. We are also subject to credit risk associated with our customer concentration. If one or more of our largest fine paper and packaging or technical products customers were to become bankrupt, insolvent or otherwise were unable to pay for services provided, we may incur significant write-offs of accounts receivable. We cannot be certain that our tax planning strategies will be effective and that our research and development tax credits will continue to be available to offset our tax liability. We are continuously undergoing examination by the Internal Revenue Service (the "IRS") as well as taxing authorities in various state and foreign jurisdictions in which we operate. The IRS and other taxing authorities routinely challenge certain deductions and credits reported on our income tax returns. As of December 31, 2017, we had $15.5 million of U.S. federal and $6.9 million of U.S. state research and development tax credits ("R&D Credits") which, if not used, will expire between 2030 and 2037 for the U.S. federal R&D Credits and 13 between 2020 and 2032 for the state R&D Credits. The availability of state NOLs and state credits to offset taxable income and income tax, respectively, could also be substantially reduced if we were to undergo an "ownership change" as defined within certain state tax codes. In accordance with Accounting Standards Codification ("ASC") Topic 740, Income Taxes ("ASC Topic 740"), as of December 31, 2017, we have recorded a liability of $10.0 million for uncertain tax positions where we believe it is "more likely than not" that the benefit reported on our income tax return will not be realized. There can be no assurance, however, that the actual amount of unrealized deductions will not exceed the amounts we have recognized for uncertain tax positions. Federal income tax reform could have unforeseen effects on our financial condition and results of operations. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act , hereafter referred to as the “Tax Act”. The Company is in the process of determining the impact to the financial statements of all aspects of the Tax Act and will reflect the impact of such reform in the financial statements during the period in which such amounts can be reasonably estimated. The Tax Act significantly changes how the U.S. taxes corporations. The Tax Act requires complex computations to be performed that were not previously required in U.S. tax law, significant judgments to be made in interpretation of the provisions of the Tax Act and significant estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered that is different from our interpretation. As we complete our analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may materially impact our provision for income taxes in the period in which the adjustments are made. We have significant obligations for pension and other postretirement benefits. We have significant obligations for pension and other postretirement benefits which could require future funding beyond that which we have funded in the past or which we currently anticipate. At December 31, 2017, our projected pension benefit obligations were $463.9 million and exceeded the fair value of pension plan assets by $63.5 million. In 2017, we made total contributions to qualified pension trusts of $14.3 million. In addition, during 2017 we paid pension benefits for unfunded qualified and supplemental retirement plans of $2.6 million. At December 31, 2017, our projected other postretirement benefit obligations were $44.0 million. No assets have been set aside to satisfy our other postretirement benefit obligations. In 2017, we made payments for postretirement benefits other than pensions of $3.8 million. A material increase in funding requirements or benefit payments could have a material effect on our cash flows. We may be required to pay material amounts under multiemployer pension plans. We contribute to the PACE Industry Union-Management Pension Fund (the “PIUMPF"), a multiemployer pension plan. The amount of our annual contributions to the PIUMPF is negotiated with the plan and the bargaining unit representing our employees covered by the plan. In 2017, we contributed approximately $0.1 million to the PIUMPF. In addition, in the event of a partial or complete withdrawal by us from the PIUMPF at a time when the plan is underfunded, we would be liable for a proportionate share of such plan's unfunded vested benefits, referred to as a withdrawal liability. In the event that any other contributing employer withdrew from the PIUMPF at a time when the plan is underfunded, and such employer cannot satisfy its obligations to the plan at the time of withdrawal, then the proportionate share of the plan's unfunded vested benefits that would be allocable to us and to the other remaining contributing employers, would increase and there could be an increase to our required annual contributions. In future negotiations of collective bargaining agreements with the labor union that participates in the PIUMPF, we may decide to discontinue participation in the plan and we could incur additional costs associated with no longer participating in the plan. The PIUMPF was certified to be in "critical status" for the plan year beginning January 1, 2010, and continued to be in critical status for the plan year beginning January 1, 2017. In 2013, two large employers withdrew from the PIUMPF. Further withdrawals by other contributing employers could cause a "mass withdrawal" from, or effectively a termination of, the PIUMPF or alternatively we could elect to withdraw. Although we have no current intention to withdraw from the PIUMPF, if we were to withdraw, either completely or partially, we would incur a withdrawal liability based on our share of the PIUMPF's unfunded vested benefits. Based on information as of December 31, 2016 provided by the PIUMPF and reviewed by our actuarial consultant, we estimate that, as of December 31, 2017, the payments that we would be required to make to PIUMPF in the event of our complete withdrawal would be approximately $0.1 million per year on a pre-tax basis. These payments would continue for 20 years, unless we were deemed to be included in a "mass withdrawal" from 14 the PIUMPF, in which case these payments would continue in perpetuity. However, we are not able to determine the exact amount of our withdrawal liability because the amount could be higher or lower depending on the nature and timing of any triggering event, the funded status of the plan and our level of contributions to the plan prior to the triggering event. These withdrawal liability payments would be in addition to pension contributions to any new pension plan adopted or contributed to by us to replace the PIUMPF and could have a material effect on our cash flows. Adverse changes to pension laws and regulations could increase the likelihood and amount of our liabilities arising under the PIUMPF. The outcome of legal actions and claims may adversely affect us. We are involved in legal actions and claims arising in the ordinary course of our business. The outcome of such legal actions and claims against us cannot be predicted with certainty. Legal actions and claims against us could have a material effect on our financial condition, results of operations and liquidity. Labor interruptions would adversely affect our business. Except for our Pittsfield, Massachusetts, Brownville, New York and Quakertown, Pennsylvania manufacturing facilities which are non-union, substantially all of our hourly employees are unionized. In addition, some key customers and suppliers are also unionized. Strikes, lockouts or other work stoppages or slowdowns involving our unionized employees, and/or those of our suppliers and customers, could have a material effect on us. If we are unable to continue to implement our business strategies, our financial conditions and operating results could be materially affected. Our future operating results will depend, in part, on the extent to which we can successfully implement our business strategies, including expansion and growth of our technical products (filtration and performance materials) and packaging businesses in a cost effective manner. Additionally, a slower than anticipated loading of our new filtration asset in Appleton, Wisconsin could cause our results to be lower than expected in the future. Our strategies are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. If we are unable to successfully implement our business strategies, our business, financial condition and operating results could be materially adversely affected. We may not successfully integrate acquisitions and may be unable to achieve anticipated cost savings or other synergies. The integration of the operations of acquired companies involves a number of risks and presents financial, managerial, legal and operational challenges. We may have difficulty, and may incur unanticipated expenses related to, integrating information systems, financial reporting activities, and integrating and retaining management and personnel from acquired companies. We may not be able to achieve anticipated cost savings or commercial or growth synergies, for a number of reasons, including contractual constraints and obligations or an inability to take advantage of expected commercial opportunities, increased operating efficiencies or commercial expansion of key technologies. Failure to successfully integrate acquired companies may have an adverse effect on our business, financial condition, results of operations, and cash flows. We may not be able to adequately protect our intellectual property and proprietary rights, which could harm our future success and competitive position. Our future success and competitive position also depends, in part, upon our ability to obtain and maintain protection for our intellectual property and proprietary rights. Failure to protect our existing intellectual property rights may result in the loss of valuable technologies or may require us to license other companies' intellectual property rights. It is possible that any of our patents may be invalidated, rendered unenforceable, circumvented, challenged or licensed to others or any of our pending or future patent applications may not be issued within the scope of the claims sought by us, if at all. Further, others may develop technologies that are similar or superior to our technologies, duplicate our technologies or design around our patents, and steps taken by us to protect our technologies may not prevent misappropriation of such technologies. Future dividends on our common stock may be restricted or eliminated. Dividends are declared at the discretion of our Board of Directors, and future dividends will depend on our future earnings, cash flow, financial requirements and other factors. Our ability to pay cash dividends on our common stock is limited under the terms of both our bank credit agreement and the indenture for our $175 million of senior notes due November 2021 (the "2021 Senior Notes"). As of December 31, 2017, under the most restrictive terms of our bank credit agreement and the 15 F o r m 1 0 - K indenture for the 2021 Senior Notes, our ability to pay cash dividends on our common stock is limited, as described under "Risks Relating to Our Indebtedness." There can be no assurance that we will continue to pay dividends in the future. We may be required to record a charge to our earnings if our goodwill or intangible assets become impaired. As of December 31, 2017, we had goodwill of $85.3 million and other intangible assets of $78.7 million. Goodwill and other intangible assets are recorded at fair value on the date of acquisition. In accordance with applicable accounting guidance, we review goodwill and other indefinite-lived intangible assets at least annually for impairment, and long-lived intangible assets when facts and circumstances warrant an impairment review. Impairment may result from, among other things, deterioration in performance, adverse market conditions, acceleration of the secular decline in fine paper and office products or a lack of success in our efforts to offset these declines with new fine paper and packaging products, which could lead to a reduction in the size of our manufacturing footprint, adverse changes in applicable laws or regulations, and a variety of other factors. The amount of any non-cash impairment would be recognized immediately through our consolidated statement of operations. Any future goodwill or other intangible asset impairment could have a material adverse effect on our results of operations and financial position. If we have a catastrophic loss or unforeseen or recurring operational problems at any of our facilities, we could suffer significant lost production and/or cost increases. Our technical products and fine paper and packaging businesses may suffer catastrophic loss due to fire, flood, terrorism, mechanical failure, or other natural or man-made events. If any of our facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, delay or reduce shipments, reduce revenue, and result in significant expenses to repair or replace the facility. These expenses and losses may not be adequately covered by property or business interruption insurance. Even if covered by insurance, our inability to deliver our products to customers, even on a short- term basis, may cause us to lose market share on a more permanent basis. Fluctuations in currency exchange rates could adversely affect our results. Exchange rate fluctuations for the Euro do not have a material effect on the operations or cash flows of our German and Dutch technical products businesses. Our German and Dutch technical products business incurs most of its costs and sells most of its production in Europe and, therefore, its operations and cash flows are not materially affected by changes in the exchange rate of the Euro relative to the U.S. dollar. Changes in the Euro exchange rate relative to the U.S. dollar will, however, have an effect on our balance sheet and reported results of operations. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk." In addition, because we transact business in other foreign countries, some of our revenues and expenses are denominated in a currency other than the local currency of our operations. As a result, changes in exchange rates between the currency in which the transaction is denominated and the local currency of our operations into which the transaction is being recorded can impact the amount of local currency recorded for such transaction. This can result in more or less local currency revenues or costs related to such transaction, and thus have an effect on our reported sales and income before income taxes. Our activities are subject to extensive government regulation, which could increase our costs, cause us to incur liabilities and adversely affect the manufacturing and marketing of our products. Our operations are subject to federal, state and local laws, regulations and ordinances in the United States, Germany, the Netherlands and elsewhere in the world relating to various environmental, health and safety matters. The nature of our operations requires that we invest capital and incur operating costs to comply with those laws, regulations and ordinances and exposes us to the risk of claims concerning non-compliance with environmental, health and safety laws or standards. We cannot assure that significant additional expenditures will not be required to maintain compliance with, or satisfy potential claims arising from, such laws, regulations and ordinances. Future events, such as changes in existing laws and regulations or contamination of sites owned, operated or used for waste disposal by us (including currently unknown contamination and contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs that could require significantly higher capital expenditures and operating costs, which would reduce the funds otherwise available for operations, capital expenditures, future business opportunities or other purposes. Additionally, in the U.S., portions of the Moving Ahead for Progress in the 21st Century Act (“MAP-21”, primarily, the electronic logging device (ELD) rules under MAP-21) have created a decrease in levels of capacity in the over-the-road freight sector which could have an adverse impact on our business. The current operating environment in the over-the-road freight and transportation sector resulting from fluctuating fuel costs, industry-specific regulations (such as hours-of- service and ELD rules), a shortage of qualified drivers, and other economic factors are causing a tightening of capacity and 16 an increase in prices charged to shippers, such as us, in the over-the-road transportation and distribution sector generally, and in our carrier networks specifically, which could have an adverse impact on our business. We are subject to risks associated with possible climate change legislation and various cost and manufacturing issues associated with such legislation. GHG emissions have increasingly become the subject of political and regulatory focus. Concern over potential climate change, including global warming, has led to legislative and regulatory initiatives directed at limiting GHG emissions. In addition to certain federal proposals in the United States to regulate GHG emissions, Germany, the U.K. and all the states in which we operate are currently considering GHG legislation or regulations, either individually and/or as part of regional initiatives. While not all are likely to become law it is reasonably possible that additional climate change related mandates will be forthcoming, and it is expected that they may adversely impact our costs by increasing energy costs and raw material prices, requiring operational or equipment modifications to reduce emissions and creating costs to comply with regulations or to mitigate the financial consequences of compliance. We are subject to cybersecurity risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology that manages operations and other business processes. We use information technologies to securely manage operations and various business functions. We rely on various technologies to process, store and report on our business and interact with customers, vendors and employees. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security design and controls, and those of our third party providers, our information technology and infrastructure may be vulnerable to cyber attacks by hackers or breaches due to employee error, malfeasance or other disruptions. Any such breach could result in operational disruptions or the misappropriation of sensitive data that could subject us to civil and criminal penalties, litigation or have a negative impact on our reputation. There can be no assurance that such disruptions or misappropriations and the resulting repercussions will not negatively impact our cash flows and materially affect our results of operations or financial condition. The U.S. Congress is considering cybersecurity legislation that, if enacted, could impose additional obligations on us and could expand our potential liability in the event of a cyber-security incident. Additionally, we collect, process, store, use and transmit personal data for use in our business, most of which relates to our global employees. Personal data is increasingly subject to legal and regulatory protections around the world, which vary widely in approach and which possibly conflict with one another. As discussed above, in recent years, U.S. legislators and regulatory agencies, such as the Federal Trade Commission, as well as U.S. states, have increased their focus on protecting personal data by law and regulation, and have increased enforcement actions for violations of privacy and data protection requirements. The European Commission also recently approved and adopted the General Data Protection Regulation ("GDPR") in the European Union, a new data protection law, which will apply beginning in May 2018. These data protection laws and regulations are intended to protect the privacy and security of personal data, including credit card information that is collected, processed and transmitted in or from the relevant jurisdiction. Implementation of and compliance with these laws and regulations may be more costly or take longer than we anticipate, or could otherwise adversely affect our business operations, which could negatively impact our financial position or cash flows. Additionally, media coverage of data breaches has escalated, in part because of the increased number of enforcement actions, investigations and lawsuits. As this focus and attention on privacy and data protection increases, we also risk exposure to potential liabilities and costs resulting from the compliance with, or any failure to comply with applicable legal requirements, conflicts among these legal requirements or differences in approaches to privacy and security of travel data. Our business could be materially adversely affected by our inability, or the inability of our vendors who receive personal data from us, to comply with legal obligations regarding the use of personal data, new data handling requirements that conflict with or negatively impact our business practices. Our business may suffer if we do not retain our senior management. We depend on our senior management. The loss of services of members of our senior management team could adversely affect our business until suitable replacements can be found. There may be a limited number of persons with the requisite skills to serve in these positions and we may be unable to locate or employ qualified personnel on acceptable terms. In addition, our future success requires us to continue to attract and retain competent personnel. F o r m 1 0 - K 17 Risks Relating to Our Indebtedness We may not be able to fund our future capital requirements internally or obtain third-party financing. We may be required or choose to obtain additional debt or equity financing to meet our future working capital requirements, as well as to fund capital expenditures and acquisitions. To the extent we must obtain financing from external sources to fund our capital requirements, we cannot guarantee financing will be available on favorable terms, if at all. As of December 31, 2017, we have required debt payments of $1.4 million during the year ending December 31, 2018. We may not be able to generate sufficient cash flow to meet our debt obligations, including the 2021 Senior Notes. Our ability to make scheduled payments or to refinance our obligations with respect to the 2021 Senior Notes, our other debt and our other liabilities will depend on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to certain financial, business and other factors beyond our control. If our cash flow and capital resources are insufficient to fund our debt obligations and other liabilities, we could face substantial liquidity problems and may be forced to reduce or delay scheduled expansions and capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. We cannot assure that our operating performance, cash flow and capital resources will be sufficient to repay our debt in the future. In the event that we are required to dispose of material assets or operations or restructure our debt to meet our debt and other obligations, we can make no assurances as to the terms of any such transaction or how quickly any such transaction could be completed. If we cannot make scheduled payments on our debt, we will be in default and, as a result: • • our debt holders could declare all outstanding principal and interest to be due and payable; our senior secured lenders could terminate their commitments and commence foreclosure proceedings against our assets; and • we could be forced into bankruptcy or liquidation. If our operating performance declines in the future or we breach our covenants under our revolving credit facility, we may need to obtain waivers from the lenders under our revolving credit facility to avoid being in default. We may not be able to obtain these waivers. If this occurs, we would be in default under our revolving credit facility. We have significant indebtedness which subjects us to restrictive covenants relating to the operation of our business. As of December 31, 2017, we had $175 million of 2021 Senior Notes, $76.9 million in revolving credit borrowings and $6.4 million of project financing outstanding. In addition, availability under our bank credit agreement was approximately $92 million. Our leverage could have important consequences. For example, it could: • make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on the 2021 Senior Notes and our other indebtedness; place us at a disadvantage to our competitors; require us to dedicate a substantial portion of our cash flow from operations to service payments on our indebtedness, thereby reducing funds available for other purposes; increase our vulnerability to a downturn in general economic conditions or the industry in which we operate; limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and general corporate and other purposes; and limit our ability to plan for and react to changes in our business and the industry in which we operate. • • • • • The terms of our indebtedness, including our bank credit agreement and the indenture governing the 2021 Senior Notes, contain covenants restricting our ability to, among other things, incur certain additional debt, incur or create certain liens, make specified restricted payments, pay dividends, authorize or issue capital stock, enter into transactions with our affiliates, consolidate or merge with or acquire another business, sell certain of our assets or liquidate, dissolve or wind-up our Company. Under the most restrictive terms of the Third Amended and Restated Credit Agreement, we are permitted to pay cash dividends on or repurchase shares of our common stock up to the amount available under the Third Amended and Restated Credit Agreement, as long as the availability under the Third Amended and Restated Credit Agreement exceeds $25 million. If the availability is below $25 million, we are restricted from paying dividends or repurchasing shares. Under 18 the most restrictive terms of the 2021 Senior Notes, we are permitted to pay cash dividends of up to $25 million in a calendar year, but not permitted to repurchase shares of our common stock. However, as long as the net leverage ratio (net debt/EBITDA) under the 2021 Senior Notes is below 2.5x, we can pay dividends or repurchase shares without limitation. Refer to Item 7A, "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources" for the current limitations on our ability to pay dividends on or repurchase shares of our common stock. In addition, if the aggregate availability under our revolving credit facilities is less than the greater of (i) $25 million and (ii) 12.5 percent of the maximum aggregate commitments under our revolving credit facilities as then in effect, we will be subject to increased reporting obligations and controls until such time as availability is more than the greater of (a) $35 million and (b) 17.5 percent of the maximum aggregate commitments under our revolving credit facilities as then in effect for at least 60 consecutive days and no default or event of default has occurred or is continuing during such 60-day period. If aggregate availability under our revolving credit facilities is less than the greater of (i) $20 million and (ii) 10 percent of the maximum aggregate commitments under our revolving credit facilities as then in effect, we are required to comply with a fixed charge coverage ratio (as defined in our bank credit agreement) of not less than 1.1 to 1.0 for the preceding four- quarter period, tested as of the end of each quarter. Such compliance, once required, would no longer be necessary once (x) aggregate availability under our revolving credit facilities exceeds the greater of (i) 17.5 percent of the aggregate commitment for our revolving credit facilities and (ii) $35 million for 60 consecutive days and (y) no default or event of default has occurred and is continuing during such 60-day period. As of December 31, 2017, aggregate availability under our revolving credit facilities exceeded the minimum required amount, and we are not required to comply with such fixed charge coverage ratio. Our revolving credit facilities accrue interest at variable rates. As of December 31, 2017, we had $76.9 million of revolving credit borrowings outstanding which mature on December 18, 2019. We may reduce our exposure to rising interest rates by entering into interest rate hedging arrangements, although those arrangements may result in us incurring higher interest expenses than we would incur without the arrangements. If interest rates increase in the absence of such arrangements, we will need to dedicate more of our cash flow from operations to make payments on our debt. For more information on our liquidity, see Item 7A, "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources." Our failure to comply with the covenants contained in our revolving credit facility or the indenture governing the 2021 Senior Notes could result in an event of default that could cause acceleration of our indebtedness. Our failure to comply with the covenants and other requirements contained in the indenture governing the 2021 Senior Notes, our revolving credit facility or our other debt instruments could cause an event of default under the relevant debt instrument. The occurrence of an event of default could trigger a default under our other debt instruments, prohibit us from accessing additional borrowings and permit the holders of the defaulted debt to declare amounts outstanding with respect to that debt to be immediately due and payable. Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments, and we may be unable to refinance or restructure the payments on indebtedness on favorable terms, or at all. Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness. Because the terms of our bank credit agreement and the indenture governing the 2021 Senior Notes do not fully prohibit us or our subsidiaries from incurring additional indebtedness, we and our subsidiaries may be able to incur substantial additional indebtedness in the future, some of which may be secured. If we or any of our subsidiaries incur additional indebtedness, the related risks that we and they face may intensify. Our bank credit agreement is secured by a majority of our assets. Our bank credit agreement is secured by a majority of our assets. Availability under our bank credit agreement will fluctuate over time depending on the value of our inventory, receivables and various capital assets. An extended work stoppage or decline in sales volumes would result in a decrease in the value of the assets securing the bank credit agreement. A reduction in availability under the bank credit agreement could have a material effect on our liquidity. F o r m 1 0 - K 19 Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of financing and have an adverse effect on the market price of our securities. Our debt currently has a non-investment grade rating, and there can be no assurance that any rating assigned by the rating agencies will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency's judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital, which could have a material adverse impact on our financial condition and results of operations. We depend on our subsidiaries to generate cash flow to meet our debt service obligations. We conduct a substantial portion of our business through our subsidiaries. Consequently, our cash flow and ability to service our debt obligations depend upon the earnings of our subsidiaries and the distribution of those earnings to us, or upon loans, advances or other payments made by these entities to us. The ability of these entities to pay dividends or make other payments or advances to us will be subject to applicable laws and contractual restrictions contained in the instruments governing their debt, including our revolving credit facility and the indenture governing the 2021 Senior Notes. These limitations are also subject to important exceptions and qualifications. The ability of our subsidiaries to generate sufficient cash flow from operations to allow us to make scheduled payments on our debt will depend upon their future financial performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control as well as their ability to repatriate cash to us. If our subsidiaries do not generate sufficient cash flow from operations to help us satisfy our debt obligations, including payments on the 2021 Senior Notes, or if they are unable to distribute sufficient cash flow to us, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital expenditures or seeking to raise additional capital. Refinancing may not be possible, and any assets may not be saleable, or, if sold, we may not realize sufficient amounts from those sales. Additional financing may not be available on acceptable terms, if at all, or we may be prohibited from incurring it, if available, under the terms of our various debt instruments then in effect. Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms would have an adverse effect on our business, financial condition and results of operations. FORWARD-LOOKING STATEMENTS Certain statements in this Annual Report on Form 10-K may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), or in releases made by the SEC, all as may be amended from time to time. Statements contained in this Annual Report on Form 10-K that are not historical facts may be forward-looking statements within the meaning of the PSLRA. Any such forward-looking statements reflect our beliefs and assumptions and are based on information currently available to us. Forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. We caution investors that any forward-looking statements we make are not guarantees or indicative of future performance. For additional information regarding factors that may cause our results of operations to differ materially from those presented herein, please see "Risk Factors" contained in this Annual Report on Form 10-K and as are detailed from time to time in other reports we file with the SEC. 20 You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expect," "anticipate," "contemplate," "estimate," "believe," "plan," "project," "predict," "potential" or "continue," or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement: • • • • • • • • • • • • • • • • • • • changes in market demand for our products due to global economic and political conditions; the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases; the loss of current customers or the inability to obtain new customers; increases in commodity prices, (particularly for pulp, energy and latex) due to constrained global supplies or unexpected supply disruptions; our ability to control costs, including transportation, and implement measures designed to enhance operating efficiencies; the availability of raw materials and energy; the enactment of adverse state, federal or foreign tax or other legislation or changes in government policy or regulation, including the recent Tax Act; unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations; fluctuations in (i) exchange rates (in particular changes in the U.S. dollar/Euro currency exchange rates) and (ii) interest rates; increases in the funding requirements for our pension and postretirement liabilities; our ability to successfully integrate acquired businesses into our existing operations; changes in asset valuations including write-downs of assets including property, plant and equipment; inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons; loss of key personnel; strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions; capital and credit market volatility and fluctuations in global equity and fixed-income markets; our existing and future indebtedness; our net operating losses may not be available to offset our tax liability and other tax planning strategies may not be effective; other risks that are detailed from time to time in reports we file with the SEC; and other factors described under "Risk Factors." You are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made, when evaluating the information presented in this information statement. We undertake no duty to update these forward-looking statements after the date of this Form 10-K, even though our situation may change in the future. F o r m 1 0 - K Item 1B. Unresolved Staff Comments None. 21 Item 2. Properties Our principal executive offices are located in Alpharetta, Georgia, a suburb of Atlanta, Georgia. We operate 11 manufacturing facilities in the United States that produce printing and writing, text, cover, durable saturated and coated substrates, premium packaging, filtration and other specialty papers for a variety of end uses. We operate two manufacturing facilities in Germany that produce transportation and other filter media, and durable and saturated substrates. We own and operate one manufacturing facility in the Netherlands that produces digital transfer media and other technical products. We own and operate one manufacturing facility in the U.K. that produces durable printing and specialty paper. We believe that each of these facilities is adequately maintained and is suitable for conducting our operations and business. We manage machine operating schedules at our manufacturing locations to fulfill customer orders in a timely manner and control inventory levels. As of December 31, 2017, following are the locations of our principal facilities and operating equipment and the products produced at each location: Location Equipment/Resources Owned or Leased Products Fine Paper and Packaging Segment Neenah Mill Neenah, Wisconsin Whiting Mill Whiting, Wisconsin Converting Center Neenah, Wisconsin Great Barrington Mill Great Barrington, Massachusetts Technical Products Segment Munising Mill Munising, Michigan Pittsfield Mill Pittsfield, Massachusetts Bruckmühl Mill Bruckmühl, Germany Weidach Mill Feldkirchen-Westerham, Germany Red Bridge Mill Bolton, England Eerbeek Mill Eerbeek, Netherlands Shared Facilities Appleton Mill Appleton, Wisconsin Brattleboro Mill Brattleboro, Vermont Brownville Mill Brownville, New York Lowville Mill Lowville, New York Two paper machines; paper finishing equipment Four paper machines; paper finishing equipment Owned Owned Paper finishing equipment Owned Paper finishing equipment Owned; leased facility Printing and writing, text, cover, packaging and other specialty papers Printing and writing, text, cover, packaging and other specialty papers Printing and writing, text, cover, packaging and other specialty papers Laminated specialty papers and toll converting services Two paper machines; two off line saturators; two off line coaters; specialty finishing equipment Three paper machines; paper finishing equipment One paper machine; two saturator/ coaters; finishing equipment Two paper machines; three saturators; one laminator; three meltblown machines; specialty finishing equipment Saturating, coating, and finishing equipment Two paper machines; paper finishing equipment Owned Owned Owned Owned Owned Owned Tapes, abrasives, premask, medical packaging and other durable, saturated and coated substrates Reverse osmosis filtration and glass applications Masking tape backings and abrasive backings Transportation filtration and other industrial filter media Durable printing, specialty paper, and coated substrates Digital dye sublimation and image transfer printing paper Two paper machines; saturating equipment; paper finishing equipment Owned One paper machine; coating and paper finishing equipment Owned Transportation filtration, printing and writing, text, cover, packaging, and other specialty papers Printing, packaging, specialty paper board, and coated substrates One paper machine; one off-line Owned Durable printing, packaging, and specialty paper Durable printing, packaging, and specialty paper Durable printing, packaging, and specialty paper coater Saturating, coating, embossing and finishing equipment Owned Quakertown Mill Quakertown, Pennsylvania Saturating, coating, embossing and finishing equipment Owned 22 See Note 7 of Notes to Consolidated Financial Statements, "Debt", for a description of the material encumbrances attached to the properties described in the table above. As of December 31, 2017, following are the locations of our owned and leased office and laboratory space and the functions performed at each location. Administrative Location Alpharetta, Georgia Leased Office Space Office/Other Space Function Neenah and Appleton, Wisconsin Owned Office Space Munising, Michigan Pittsfield, Massachusetts West Springfield, Massachusetts Owned Office and Laboratory Space Owned Office and Laboratory Space Owned Office and Laboratory Space Feldkirchen-Westerham, Germany Owned Office and Laboratory Space Eerbeek, Netherlands Owned Office and Laboratory Space Corporate Headquarters, Administration and Design Center Administration Administration and Research and Development for our technical products businesses Administration and Research and Development for our technical products businesses Administration and Research and Development for our technical products and fine paper and packaging businesses Administration and Research and Development for our technical product businesses Administration and Research and Development for our technical product businesses Capacity Utilization Paper machines in our manufacturing facilities generally operate on a combination of three-shift five- or seven-day schedules to meet demand. We are not constrained by input factors and the maximum operating capacity of our manufacturing facilities is calculated based on operating days to account for variations in mix and different units of measure between assets. Due to required maintenance downtime and contract holidays, the maximum number of operating days is defined as 350 days per year. We generally expect to utilize approximately 80 to 90 percent of our maximum operating capacity. The following table presents our percentage utilization of maximum operating capacity by segment: F o r m 1 0 - K Technical Products Fine Paper and Packaging Item 3. Legal Proceedings Litigation Year Ended December 31, 2017 2016 2015 88% 81% 87% 80% 84% 80% We are involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on our consolidated financial condition, results of operations or liquidity. 23 Income Taxes We periodically undergo examination by the IRS as well as various state and foreign jurisdictions. The IRS and other taxing authorities routinely challenge certain deductions and credits we report on our income tax returns. Item 4. Mine Safety Disclosures Not applicable. 24 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities PART II Neenah common stock is listed on the New York Stock Exchange and is traded under the ticker symbol NP. Trading, as reported on the New York Stock Exchange, Inc. Composite Transactions Tape, and dividend information follows: 2017 Fourth quarter Third quarter Second quarter First quarter 2016 Fourth quarter Third quarter Second quarter First quarter Common Stock Market Price High Low Dividends Declared $ $ $ $ $ $ $ $ 93.10 86.35 82.40 86.55 90.23 82.24 74.15 64.10 $ $ $ $ $ $ $ $ 80.00 75.65 72.35 73.05 75.50 70.62 61.77 63.37 $ $ $ $ $ $ $ $ 0.37 0.37 0.37 0.37 0.33 0.33 0.33 0.33 For the year ended December 31, 2017 we paid quarterly cash dividends of $0.37 per common share or $25.1 million annually. For the year ended December 31, 2016, we paid quarterly cash dividends of $0.33 per common share or $22.4 million annually. In November 2017, our Board of Directors approved an 11 percent increase in the quarterly dividend rate on our common stock to $0.41 per share, scheduled to be paid in March 2018. Dividends are declared at the discretion of the Board of Directors, and future dividends will depend on our future earnings, cash flow, financial requirements and other factors. Our ability to pay cash dividends on our common stock is limited under the terms of both our bank credit agreement and our 2021 Senior Notes. Under the most restrictive terms of the Third Amended and Restated Credit Agreement, we are permitted to pay cash dividends on or repurchase shares of our common stock up to the amount available under the Third Amended and Restated Credit Agreement, as long as the availability under the Third Amended and Restated Credit Agreement exceeds $25 million. If the availability is below $25 million, we are restricted from paying dividends or repurchasing shares. As of December 31, 2017, our availability exceeded $25 million, so this restriction did not apply. Under the most restrictive terms of the 2021 Senior Notes, we are permitted to pay cash dividends of up to $25 million in a calendar year, but not permitted to repurchase shares of our common stock. However, as long as the net leverage ratio (net debt/EBITDA) under the 2021 Senior Notes is below 2.5x, we can pay dividends or repurchase shares without limitation. In the event the net leverage ratio exceeds 2.5x, we may still pay dividends in excess of $25 million or repurchase shares by utilizing "restricted payment baskets" as defined in the indenture for the 2021 Senior Notes. As of December 31, 2017, since our leverage ratio was less than 2.5x, none of these covenants were restrictive to our ability to pay dividends on or repurchase shares of our common stock. As of February 22, 2018, Neenah had approximately 1,250 holders of record of its common stock. The closing price of Neenah's common stock on February 22, 2018 was $79.25. 25 F o r m 1 0 - K Purchases of Equity Securities: The following table sets forth certain information regarding purchases of our common stock during the fourth quarter of 2017. Period October 2017 November 2017 December 2017 _______________________ Total Number of Shares Purchased (a) Average Price Paid Per Share (c) — $ — $ $ 24,127 — — 90.65 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs — $ — $ — $ 25,000,000 25,000,000 25,000,000 (a) Transactions include the purchase of vested restricted shares from employees to satisfy minimum tax withholding requirements upon vesting of stock-based awards. See Note 9 of Notes to Consolidated Financial Statements, "Stock Compensation Plans." (b) In May 2017, our Board of Directors authorized a program for the purchase of up to $25 million of outstanding common stock which was in effect till December 31, 2017. In November 2017, our Board of Directors authorized a program for the purchase of up to $25 million of outstanding common stock effective January 1, 2018. The program does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. (c) Average price paid per share for shares purchased as part of our program. Equity Compensation Plan Information The following table summarizes information about outstanding options (in this report, unless the context requires otherwise, references to "options" are intended to include stock appreciation rights) and restricted stock units and shares reserved for future issuance under our existing equity compensation plans as of December 31, 2017. (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights (b) Weighted- average exercise price of outstanding options, warrants, and rights (1) (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) 310,176 (2)(3) $ 55.60 — 310,176 $ — 55.60 680,000 — 680,000 Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total _______________________ (1) The weighted-average exercise price of outstanding options, warrants and rights does not take into account restricted stock units since they do not have an exercise price. (2) Includes (i) 180,000 shares issuable upon the exercise of outstanding options and stock appreciation rights ("SARs"), (ii) 41,377 shares issuable following the vesting and conversion of outstanding performance share unit awards, and (iii) 88,799 shares issuable upon the vesting and conversion of outstanding restricted stock units, all as of December 31, 2017. As of December 31, 2017, we had an aggregate of 464,958 stock options and SARs outstanding. The weighted average exercise price of the stock options and SARs was $55.6 per share and the remaining contractual life of such awards was 6.6 years. (3) Includes 159,200 shares that would be issued upon the assumed exercise of 425,200 SARs at the $90.65 per share closing price of our common stock on December 31, 2017. 26 Item 6. Selected Financial Data The following table sets forth our selected historical financial and other data. You should read the information set forth below in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements and the notes to those consolidated financial statements included elsewhere in this Annual Report. The statement of operations data for the years ended December 31, 2017, 2016 and 2015 and the balance sheet data as of December 31, 2017 and 2016 set forth below are derived from our audited historical consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The balance sheet data as of December 31, 2015, 2014 and 2013 and the statement of operations data for the years ended December 31, 2014 and 2013 set forth below are derived from our historical consolidated financial statements not included in this Annual Report on Form 10-K. On October 31, 2015, we sold the Lahnstein Mill for net cash proceeds of approximately $5.4 million. For the years ended December 31, 2016 and December 31, 2015, discontinued operations reported on the consolidated statements of operations reflect the results of operations and the loss on sale of the Lahnstein Mill. The consolidated statements of operations for the years ended December 31, 2014 and 2013 have been restated to report results of the Lahnstein Mill as discontinued operations. As of December 31, 2015, 2014 and 2013, the assets and liabilities of the Lahnstein Mill are classified as assets held for sale on the consolidated balance sheet. See Note 13 of Notes to Consolidated Financial Statements, "Discontinued Operations." F o r m 1 0 - K 27 Consolidated Statement of Operations Data Net sales Cost of products sold Gross profit Selling, general and administrative expenses Acquisition/integration/restructuring costs (a) Insurance settlement (b) Pension plan settlement charge (c) Loss on early extinguishment of debt (d) Other (income) expense — net Operating income Interest expense — net Income from continuing operations before income taxes Provision for income taxes (i) Income from continuing operations Income (loss) from discontinued operations, net of taxes (f) Net income Earnings from continuing operations per basic share Earnings from continuing operations per diluted share Cash dividends per common share Other Financial Data Net cash flow provided by (used for): Operating activities (i) Capital expenditures (h) Other investing activities (g) Financing activities (d)(i) Ratio of earnings to fixed charges (e) Year Ended December 31, 2017 2016 2015 2014 2013 $ 979.9 $ 941.5 $ 887.7 $ 839.7 $ 781.7 781.2 198.7 96.5 1.3 (3.2) 0.6 — (0.8) 104.3 12.6 91.7 11.4 80.3 — 80.3 4.74 4.68 1.48 $ $ $ $ 727.0 214.5 92.2 7.0 — 0.8 — 0.4 114.1 11.1 103.0 29.6 692.3 195.4 86.5 6.5 — — — 1.0 101.4 11.5 89.9 29.4 73.4 (0.4) $ 73.0 60.5 (9.4) $ 51.1 668.9 170.8 78.0 621.8 159.9 74.7 2.3 — 3.5 0.2 0.2 86.6 11.1 75.5 7.5 68.0 0.7 0.4 — 0.2 0.5 1.5 82.6 11.0 71.6 23.1 48.5 3.5 $ 68.7 $ 52.0 $ 4.33 $ 3.58 $ 4.05 $ 2.97 $ 4.26 $ 3.53 $ 3.99 $ 2.91 $ 1.32 $ 1.20 $ 1.02 $ 0.70 $ 100.0 (42.7) (52.3) (3.8) 7.1x $ 115.8 (68.5) 0.3 (48.4) 8.7x $ 111.2 (48.1) (112.0) (18.8) 7.7x $ 94.5 (27.9) (77.0) 10.2 $ 83.5 (28.7) (4.6) 15.0 6.9x 6.9x Consolidated Balance Sheet Data Cash and cash equivalents Working capital, less cash and cash equivalents Total assets (i) Long-term debt (d)(i) Total liabilities (i) Total stockholders' equity _______________________ December 31, 2017 2016 2015 2014 2013 (Dollars in millions) $ 4.5 $ 3.1 $ 4.2 $ 72.6 $ 156.1 904.4 254.1 504.5 399.9 125.2 765.6 219.7 427.3 338.3 136.3 751.4 228.2 439.8 311.6 129.5 724.5 226.8 435.8 288.7 73.4 123.9 670.9 185.5 403.4 267.5 28 (a) For the year ended December 31, 2017, we incurred of $1.3 million of acquisition costs related to the Coldenhove Acquisition and $0.6 million of pension settlement charges. For the year ended December 31, 2016, we incurred $4.1 million of integration costs related to the FiberMark Acquisition, $2.7 million of non-capitalized trial costs related to the U.S. filtration project, $0.2 million of other one-time costs and $0.8 million of pension settlement charges. For the year ended December 31, 2015, we incurred $5.3 million of integration costs related to the FiberMark Acquisition and $1.2 million of restructuring costs. For the year ended December 31, 2014, we incurred $1.0 million of integration costs related to the acquisition of the Crane technical materials business and $1.3 million of restructuring costs. For the year ended December 31, 2013, we incurred $0.4 million of integration costs related to the acquisition of the Southworth brands. (b) For the year ended December 31, 2017, we recorded a representations and warranties insurance settlement of $3.2 million related to the FiberMark acquisition. (c) For the year ended December 31, 2016, we elected settlement accounting even though the benefit payments did not exceed the sum of expected service cost and interest costs of the affected plans, and recognized a settlement loss of $0.8 million. For the years ended December 31, 2014 and 2013, benefit payments under certain pension plans exceeded the sum of expected service cost and interest costs for the plan for the respective calendar years. In accordance with ASC Topic 715, Compensation — Retirement Benefits ("ASC Topic 715"), we measured the liabilities of the post-retirement benefit plans and recognized settlement losses of $3.5 million and $0.2 million, respectively. (d) For the year ended December 31, 2014, we amended and restated our existing bank credit facility and recognized a pre-tax loss of $0.2 million for the write-off of unamortized debt issuance costs. For the year ended December 31, 2013, we redeemed $90 million of 2014 Senior Notes and repaid all outstanding term loan borrowings ($29.3 million). In connection with the early extinguishment of debt we recognized a pre-tax loss of $0.5 million for the write-off of unamortized debt issuance costs. For the year ended December 31, 2012, we completed an early redemption of $68 million in aggregate principal amount of the 2014 Senior Notes. In connection with the early redemption we recognized a pre-tax loss of $0.6 million, including a call premium and the write-off of unamortized debt issuance costs. (e) For purposes of determining the ratio of earnings to fixed charges, earnings consist of income before income taxes (less interest) plus fixed charges. Fixed charges consist of interest expense, including amortization of debt issuance costs, and the estimated interest portion of rental expense. (f) The following table presents the results of discontinued operations: Year Ended December 31, 2017 2016 (1) 2015 (2) 2014 2013 (3) F o r m 1 0 - K Discontinued operations: (4) Income from operations Loss on sale of the Lahnstein Mill (4) Income (loss) before income taxes Provision (benefit) for income taxes Income (loss) from discontinued operations, net of taxes _______________________ $ — $ — $ $ 0.2 (13.6) (13.4) (4.0) — — (0.6) (0.6) (0.2) $ — $ (0.4) $ (9.4) $ — 0.9 — 0.9 0.2 0.7 $ $ 5.4 — 5.4 1.9 3.5 (1) The loss in 2016 was due to the final adjustment of the sales price of the Lahnstein Mill. (2) The loss on sale of the Lahnstein Mill includes a net curtailment gain related to the divesture of the pension plan of $15.8 million, including a $5.5 million write-off of deferred actuarial losses in 2015. (3) During the first quarter of 2013, we received a refund of excess pension contributions from the terminated Terrace Bay pension plan. As a result, we recorded income before income taxes from discontinued operations of $4.2 million and a related provision for income taxes of $1.6 million. (4) On October 31, 2015, we sold the Lahnstein Mill. For the year ended December 31, 2017, 2016, 2015, 2014 and 2013, the results of operations and the loss on sale of the Lahnstein Mill are reported as discontinued operations in the Consolidated Statement of Operations Data. (g) In November 2017, we purchased all of the outstanding equity of Coldenhove for approximately $45 million. In August 2015, we purchased all of the outstanding equity of FiberMark for approximately $118 million. In July 2014, we purchased all of the outstanding equity of Crane for approximately $72 million. 29 (h) During the year ended December 31, 2016, we completed our U.S. Filtration project. (i) At December 31, 2017, financial statements reflect the adjustments arising from the U.S. tax reform signed on December 22, 2017. See Note 6 of Notes to Consolidated Financial Statements, "Income Taxes." At December 31, 2016, we adopted ASC Topic No. 2016-09 and applied the guidance retroactively to January 1, 2016. At December 31, 2015, we adopted ASC Topic No. 2015-03 and ASC Topic No. 2015-17 and elected to apply the guidance retroactively to all periods presented. 30 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis presents the factors that had a material effect on our results of operations during the years ended December 31, 2017, 2016 and 2015. Also discussed is our financial position as of the end of those years. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements. Introduction This Management's Discussion and Analysis of Financial Condition is intended to provide investors with an understanding of the historical performance of our business, its financial condition and its prospects. We will discuss and provide our analysis of the following: • Overview of Business; • Business Segments; • Results of Operations and Related Information; • Liquidity and Capital Resources; • Adoption of New Accounting Pronouncements; and • Critical Accounting Policies and Use of Estimates. Overview of Business We are a leading producer of technical products and premium fine papers and packaging. We have two primary operations: our technical products business and our fine paper and packaging business. Our mission is to create value by improving the image and performance of everything we touch. We expect to create value by growing in specialized niche markets that value performance or image and where we have competitive advantages. In managing our businesses, we believe that achieving and maintaining a leadership position in our markets, responding effectively to customer needs and competitive challenges, employing capital optimally, controlling costs and managing risks are important to long-term success. Changes in input costs and general economic conditions can also impact our results. In this discussion and analysis, we will refer to these factors. • Competitive Environment — Our past results have been and our future prospects will be significantly affected by the competitive environment in which we operate. While our businesses are oriented to premium performance and quality, they may also face competitive pressures from lower value products and in most of our markets our businesses compete directly with well-known competitors, some of which are larger and more diversified. • Economic Conditions and Input Costs — The markets for all of our products are affected to a significant degree by economic conditions, including rapid changes in freight and input costs, particularly for pulp, latex and natural gas that may not be recovered immediately through pricing or other actions. Our results are also affected by fluctuations in exchange rates, particularly for the Euro. Business Segments Our reportable operating segments consist of Technical Products, Fine Paper and Packaging, and Other. Our technical products business is a leading international producer of transportation, water and other filter media and durable, saturated and coated substrates for a variety of end markets. We focus on categories where we believe we are, or can be, a market leader. These categories include filtration media for transportation, water and other uses, backings for specialty tapes and abrasives, performance labels, digital image transfer, and other specialty markets. Our dedicated technical products manufacturing facilities are located near Munich, Germany, Eerbeek, Netherlands, Bolton, England, 31 F o r m 1 0 - K Munising, Michigan, and Pittsfield, Massachusetts. In addition, certain technical products are manufactured along with fine paper and packaging products in shared facilities located in upstate New York, Brattleboro, Vermont, and Quakertown, Pennsylvania. In 2017, a filtration machine (which was converted from a fine paper machine) and adjacent saturating plant began production in Appleton, Wisconsin, a site also shared with the fine paper and packaging business. We believe our fine paper and packaging business is the leading supplier of premium printing, packaging, and other high end specialty papers in North America. Our products include some of the most recognized and preferred brands in North America, where we enjoy leading market positions in many of our product categories. We sell our products primarily to authorized paper distributors, as well as through converters, major national retailers and specialty businesses. Our primary fine paper and packaging manufacturing facilities are located in Neenah and Whiting, Wisconsin and in Brattleboro, Vermont. Certain products are manufactured in shared facilities located in upstate New York, Brattleboro, Vermont, and Quakertown, Pennsylvania, as well as a site shared with technical products in 2017 in Appleton, Wisconsin. In August 2017, we purchased a laminating asset in Great Barrington, Massachusetts to support continued growth in our premium packaging business. Our other segment includes certain product lines composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These products are primarily manufactured at our mill in Brattleboro, Vermont. Results of Operations and Related Information In this section, we discuss and analyze our net sales, income before interest and income taxes (which we refer to as "operating income") and other information relevant to an understanding of our results of operations. Executive Summary For the year ended December 31, 2017, consolidated net sales of $979.9 million increased $38.4 million, or 4 percent, from $941.5 million in 2016. The increase resulted from growth in both Technical Products and Fine Paper and Packaging, due to higher volumes, higher priced mix and favorable currency effects in Technical Products, and due to growth in premium packaging and higher selling prices, partly offset by lower priced mix in Fine Paper and Packaging. Excluding the November 1, 2017, Coldenhove Acquisition, consolidated net sales increased 3 percent from the prior year. Consolidated operating income of $104.3 million for the year ended December 31, 2017 decreased $9.8 million, or 9 percent, from the prior year. The decline was primarily due to higher costs from the U.S. transportation filtration business start-up phase. Operating income benefited in 2017 from higher volumes and selling prices, proceeds from a representations and warranties insurance settlement and improved operational efficiencies. In addition to filtration start-up costs, operating income decreased due to higher input and freight costs, a lower value mix in Fine Paper and Packaging, and acquisition costs related to the Coldenhove Acquisition. Excluding the insurance settlement of $3.2 million, acquisition and integration costs of $1.3 million, and pension and SERP settlement charges of $0.6 million in 2017, and aggregate charges of $7.8 million for integration and restructuring costs and pension settlement losses in 2016, operating income for the year ended December 31, 2017 decreased $18.9 million from the prior year. See later in this section for further information regarding the presentation of operating income, as adjusted. Cash provided by operating activities of $100 million for the year ended December 31, 2017 was $15.8 million lower than cash provided by operating activities of $115.8 million in the prior year primarily due to lower operating earnings and an increased investment in working capital. These items were partly offset by lower cash tax payments and lower contributions and benefit payments for post-retirement benefit obligations. Capital expenditures for the year ended December 31, 2017 were $42.7 million compared to $68.5 million in the prior year. Higher spending in 2016 was due to an investment in U.S. transportation filtration assets that was completed at the end of 2016. 32 Analysis of Net Sales — Years Ended December 31, 2017, 2016 and 2015 Analysis of Net Sales — Years Ended December 31, 2017, 2016 and 2015 The following table presents net sales by segment and net sales expressed as a percentage of total net sales: The following table presents net sales by segment and net sales expressed as a percentage of total net sales: Net sales Net sales Technical Products Technical Products Fine Paper and Packaging Fine Paper and Packaging Other Other Consolidated Consolidated Commentary: Commentary: Year 2017 versus 2016 Year 2017 versus 2016 Year Ended December 31, Year Ended December 31, 2017 2017 2017 2017 2016 2016 2016 2016 2015 2015 2015 2015 $ 502.1 $ 502.1 52% $ 466.4 52% $ 466.4 50% $ 429.2 50% $ 429.2 48% 48% 455.3 455.3 46% 46% 452.1 452.1 48% 48% 442.7 442.7 50% 50% 22.5 22.5 2% 2% 23.0 23.0 2% 2% 15.8 15.8 2% 2% $ 979.9 $ 979.9 100% $ 941.5 100% $ 941.5 100% $ 887.7 100% $ 887.7 100% 100% For the Year For the Year Ended Ended December 31, December 31, 2017 2017 2016 2016 Change in Net Sales Compared to the Prior Year Change in Net Sales Compared to the Prior Year Change Due To Change Due To Total Change Total Change Volume Volume Net Price Net Price Currency Currency Technical Products Technical Products $ $ 502.1 502.1 $ $ 466.4 466.4 $ $ 35.7 35.7 $ $ 22.9 22.9 $ $ Fine Paper and Packaging Fine Paper and Packaging Other Other Consolidated Consolidated 455.3 455.3 22.5 22.5 452.1 452.1 23.0 23.0 $ $ 979.9 979.9 $ $ 941.5 941.5 $ $ 3.2 (0.5) 38.4 3.2 (0.5) 38.4 $ 7.2 7.2 — — $ 30.1 30.1 $ $ 10.0 (4.0) (0.5) 5.5 10.0 $ (4.0) (0.5) 5.5 $ $ $ 2.8 2.8 — — — — 2.8 2.8 F o r m 1 0 - K Consolidated net sales for the year ended December 31, 2017 were $38.4 million (4%) higher than the prior year. The Consolidated net sales for the year ended December 31, 2017 were $38.4 million (4%) higher than the prior year. The increase resulted from growth in both Technical Products and Fine Paper and Packaging, due to higher volumes, higher increase resulted from growth in both Technical Products and Fine Paper and Packaging, due to higher volumes, higher priced mix and favorable currency effects in Technical Products, and due to growth in premium packaging and higher priced mix and favorable currency effects in Technical Products, and due to growth in premium packaging and higher selling prices, partly offset by lower priced mix in Fine Paper and Packaging. Excluding the November 1, 2017, selling prices, partly offset by lower priced mix in Fine Paper and Packaging. Excluding the November 1, 2017, Coldenhove Acquisition, consolidated net sales increased 3 percent from the prior year. Coldenhove Acquisition, consolidated net sales increased 3 percent from the prior year. • Net sales in our technical products business increased $35.7 million (8%) from the prior year due to higher volumes in • Net sales in our technical products business increased $35.7 million (8%) from the prior year due to higher volumes in backings, label and other filtration, as well as higher priced mix, acquired volume and favorable currency effects. backings, label and other filtration, as well as higher priced mix, acquired volume and favorable currency effects. Excluding the Coldenhove Acquisition, technical product sales increased $28.2 million (6%). Net selling prices Excluding the Coldenhove Acquisition, technical product sales increased $28.2 million (6%). Net selling prices increased due to a higher-priced mix of products sold and increased selling prices. increased due to a higher-priced mix of products sold and increased selling prices. • Net sales in our fine paper and packaging business increased $3.2 million (1%) from the prior year due to higher • Net sales in our fine paper and packaging business increased $3.2 million (1%) from the prior year due to higher volumes largely offset by lower priced mix. Increased volumes reflected double digit growth in premium packaging as well as more direct sales of non-branded products, which more than offset the decline in commercial print. volumes largely offset by lower priced mix. Increased volumes reflected double digit growth in premium packaging as well as more direct sales of non-branded products, which more than offset the decline in commercial print. • Net sales in our other business segment decreased $0.5 million from the prior year period due to lower priced mix. • Net sales in our other business segment decreased $0.5 million from the prior year period due to lower priced mix. 33 33 Year 2016 versus 2015 Technical Products Fine Paper and Packaging Other Consolidated Change in Net Sales Compared to the Prior Year For the Years Ended December 31, 2016 2015 Total Change Volume Net Price Currency Change Due To $ $ 466.4 $ 429.2 $ 37.2 $ 452.1 23.0 442.7 15.8 9.4 7.2 $ 49.8 18.2 7.2 941.5 $ 887.7 $ 53.8 $ 75.2 $ (11.0) $ (8.8) — (19.8) $ (1.6) — — (1.6) Consolidated net sales for the year ended December 31, 2016 were $53.8 million (6%) higher than the prior year. The increase reflects a full year of the acquired volume from the August 1, 2015 FiberMark Acquisition and other incremental volume growth which more than offset lower net selling prices and currency effects. Excluding currency exchange effects, consolidated net sales increased $55.4 million from the prior year. • Net sales in our technical products business increased $37.2 million (9%) from the prior year due to acquired volume and organic volume growth, which were partially offset by lower net selling prices. Excluding currency exchange effects, technical product sales increased $38.8 million (9%). Organic volumes increased from the prior year period due to growth in transportation filtration and backings for tapes and abrasives. Net selling prices were down primarily due to a lower-priced mix of products sold but also for reduced selling prices on products with contractual adjusters for certain input costs. • Net sales in our fine paper and packaging business increased $9.4 million (2%) from the prior year due to acquired volume, which was partially offset by lower net selling prices. Net selling prices were down from the prior year due to a lower-priced mix of products sold in 2016, which reflected a higher proportion of sales of non-branded products. • Net sales in our other business segment increased $7.2 million from the prior year period due to acquired volume. Analysis of Operating Income — Years Ended December 31, 2017, 2016 and 2015 The following table sets forth line items from our consolidated statements of operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results: Net sales Cost of products sold Gross profit Selling, general and administrative expenses Integration costs and settlement charges Other (income) expense — net Operating income Interest expense — net Income from continuing operations before income taxes Provision for income taxes Income from continuing operations 34 Year Ended December 31, 2017 2016 2015 100.0 % 100.0% 100.0% 79.7 % 20.3 % 9.8 % (0.1)% — % 10.6 % 1.2 % 9.4 % 1.2 % 8.2 % 77.2% 22.8% 9.8% 0.8% 0.1% 12.1% 1.2% 10.9% 3.1% 7.8% 78.0% 22.0% 9.8% 0.7% 0.1% 11.4% 1.3% 10.1% 3.3% 6.8% Commentary: Year 2017 versus 2016 Change in Operating Income (Loss) Compared to the Prior Year For the Years Ended December 31, 2017 2016 Total Change Volume Net Price (a) Input Costs (b) Currency Other (c) Change Due To Technical Products $ 55.3 $ 65.6 $ (10.3) $ 5.9 $ 1.9 $ (5.6) $ 0.4 $ (13.0) Fine Paper and Packaging Other Unallocated corporate costs 69.5 (0.4) 70.7 (1.1) (1.2) 0.7 2.9 (0.3) (3.4) (0.5) (2.5) (0.1) Consolidated $ 104.3 $ 114.1 $ _______________________ (20.1) (21.1) 1.0 (9.8) $ — 8.5 $ — (2.0) $ — (8.2) $ — — — 0.4 1.8 1.6 1.8 $ (7.8) (a) Includes price changes, net of changes in product mix. (b) Includes price changes for raw materials and energy. (c) Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses, start- up and other costs for the U.S. transportation filtration business, insurance settlement and acquisition/integration/ restructuring costs. Consolidated operating income of $104.3 million for the year ended December 31, 2017 decreased $9.8 million (9%) from the prior year. The decline was primarily due to higher costs from the U.S. transportation filtration business start-up phase. Operating income benefited in 2017 from higher volumes and selling prices, proceeds from a representations and warranties insurance settlement and improved operational efficiencies. In addition to filtration start-up costs, operating income decreased due to higher input and freight costs, a lower value mix in Fine Paper and Packaging, and acquisition costs related to the Coldenhove Acquisition. Excluding the insurance settlement of $3.2 million, acquisition and integration costs of $1.3 million, and pension and SERP settlement charges of $0.6 million in 2017, and aggregate charges of $7.8 million for integration and restructuring costs and pension settlement losses, operating income for the year ended December 31, 2017 decreased $18.9 million (16%) from the prior year. See later in this section for further information regarding the presentation of operating income, as adjusted. F o r m 1 0 - K • Operating income for our technical products business decreased $10.3 million (16%) from the prior year primarily due to higher costs from the U.S. transportation filtration start-up. Excluding the higher costs from the U.S. transportation filtration business, operating income for technical products increased due to higher sales volumes, manufacturing efficiencies, and lower integration and restructuring costs. These items were partially offset by unfavorable impacts from higher material and transportation costs. Results for the year ended December 31, 2016 include $1.4 million for integration/restructuring costs. Excluding integration/restructuring costs, operating income for the technical products business decreased $11.7 million (17%). • Operating income for our fine paper and packaging business decreased $1.2 million (2%) from the prior year period primarily due to higher material and transportation costs and a lower priced product mix, that were partly offset by higher sales volume, increased selling prices, lower integration costs, and an insurance settlement of $2.9 million. Results for the year ended December 31, 2016 include $1.8 million for integration costs related to the FiberMark Acquisition. Excluding the insurance settlement and integration costs, operating income for the fine paper and packaging business decreased $5.9 million (8%). • Unallocated corporate costs for the year ended December 31, 2017 were $20.1 million, or $1.0 million less than the prior year. Excluding charges of $1.3 million for acquisition and integration, and $0.6 million of pension and SERP settlement charges in 2017, and $0.8 million for a pension plan settlement charge and $2.7 million of restructuring costs in 2016, unallocated corporate expenses were $0.6 million unfavorable to the prior year. 35 Year 2016 versus 2015 Technical Products Fine Paper and Packaging Other Unallocated corporate costs Consolidated Change in Operating Income (Loss) Compared to the Prior Year For the Years Ended December 31, 2016 2015 Total Change $ 65.6 $ 54.1 $ 11.5 Volume 9.1 $ Change Due To Input Costs (b) Net Price (a) $ (5.5) $ 70.7 (1.1) 67.3 (2.0) 3.4 0.9 0.2 0.7 (4.1) — Other (c) Currency $ (0.5) $ (2.6) — — (3.1) 0.2 11.0 10.4 — (21.1) 114.1 $ (18.0) 101.4 $ (3.1) 12.7 $ — 10.0 $ $ — (9.6) $ — 21.4 $ — (3.1) (0.5) $ (8.6) _______________________ (a) Includes price changes, net of changes in product mix. (b) Includes price changes for raw materials and energy. (c) Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses, start- up and other costs for the U.S. filtration business, insurance settlement, and acquisition/integration/restructuring costs. Consolidated operating income of $114.1 million for the year ended December 31, 2016 increased $12.7 million (13%) from the prior year. The favorable comparison to the prior year was primarily due to lower manufacturing material costs (including purchasing synergies resulting from the FiberMark Acquisition), and increased sales as a result of incremental volume growth. These favorable variances were partially offset by incremental acquired SG&A, lower net selling prices, and higher integration and restructuring costs, primarily due to costs related to the Appleton filtration machine conversion and a pension settlement charge. Excluding aggregate charges of $7.8 million in 2016 for integration and restructuring costs and pension settlement losses, and aggregate charges of $6.5 million in 2015 for integration and restructuring costs, operating income for the year ended December 31, 2016 increased $14.0 million (13%) from the prior year. • Operating income for our technical products business increased $11.5 million (21%) from the prior year primarily due to lower manufacturing input costs and operational efficiencies, organic and acquired volume growth, and lower integration and restructuring costs. These favorable variances were partially offset by added SG&A from the acquisition, lower net selling prices and currency effects. Results for the years ended December 31, 2016 and 2015 include $1.4 million and $1.8 million for integration/restructuring costs, respectively. Excluding integration/ restructuring costs, operating income for the technical products business increased $11.1 million (20%). • Operating income for our fine paper and packaging business increased $3.4 million (5%) from the prior year period primarily due to lower manufacturing material prices and increased volume, partially offset by a lower-priced mix of products sold and added SG&A from the acquisition. Results for the years ended December 31, 2016 and 2015 include $1.8 million and 1.5 million for integration costs related to the FiberMark Acquisition, respectively. Excluding integration costs, operating income for the fine paper and packaging business increased $3.7 million (5%). • Unallocated corporate costs for the year ended December 31, 2016 were $21.1 million, or $3.1 million unfavorable to the prior year. The unfavorable comparison to the prior year period is primarily due to pre-operating costs related to conversion of a fine paper machine to filtration, which went into production in early 2017. Excluding charges of $2.7 million of restructuring costs and a pension plan settlement charge of $0.8 million in 2016, and $0.8 million of restructuring costs in 2015, unallocated corporate expenses were $0.4 million unfavorable to the prior year. 36 The following table sets forth our operating income by segment for the periods indicated: Operating income Technical Products Fine Paper and Packaging Other Unallocated corporate costs Operating Income as Reported Non-GAAP Adjustments Technical Products Integration/restructuring costs Fine Paper and Packaging Insurance settlement Integration/Restructuring costs Total Other Insurance settlement Integration/restructuring costs Total Unallocated corporate costs Pension plan settlement charge Acquisition/integration/restructuring costs Total Total non-GAAP Adjustments Operating Income as Adjusted Year Ended December 31, 2017 2016 2015 $ 55.3 $ 65.6 $ 54.1 69.5 (0.4) (20.1) 104.3 70.7 (1.1) (21.1) 114.1 67.3 (2.0) (18.0) 101.4 — (2.9) — (2.9) (0.3) — (0.3) 0.6 1.3 1.9 (1.3) 103.0 $ 1.4 — 1.8 1.8 — 1.1 1.1 0.8 2.7 3.5 7.8 1.8 — 1.5 1.5 — 2.4 2.4 — 0.8 0.8 6.5 $ 121.9 $ 107.9 F o r m 1 0 - K In accordance with generally accepted accounting principles in the United States ("GAAP"), consolidated operating income includes the pre-tax effects of the representations and warranties insurance settlement, acquisition, integration and restructuring costs, and pension plan settlement charges. We believe that by adjusting reported operating income to exclude the effects of these items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing operations. We believe that providing adjusted operating results will help investors gain an additional perspective of underlying business trends and results. Adjusted operating income is not a recognized term under GAAP and should not be considered in isolation or as a substitute for operating income derived in accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures. Additional Statement of Operations Commentary: • • SG&A expense of $96.5 million for the year ended December 31, 2017 was $4.3 million higher than the prior year due to increased SG&A associated with U.S. transportation filtration business, incremental costs related to the Coldenhove Acquisition, and higher spending due to increased sales in Technical Products. SG&A expense as a percentage of net sales for the year ended December 31, 2017, was approximately 9.8 percent and was comparable to the prior year. SG&A expense of $92.2 million for the year ended December 31, 2016 was $5.7 million higher than the prior year due to incremental selling and administrative costs related to the FiberMark Acquisition. SG&A expense as a percentage of net sales for the year ended December 31, 2016, was approximately 9.8 percent and was comparable to the year ended December 31, 2015. 37 • • For the years ended December 31, 2017, 2016 and 2015, we incurred $12.7 million, $11.2 million and $11.7 million of interest expense, respectively. The increase in interest expense in 2017 was primarily due to capitalization of interest of $0.8 million for the U.S. filtration project in 2016, higher interest rates in 2017 and higher borrowing related to the Coldenhove Acquisition. In general, our effective tax rate differs from the U.S. statutory tax rate of 35 percent primarily due to impacts of our corporate tax structure, benefits from R&D Credits earned, the mix of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate and changes in federal and state tax rates. For the year ended December 31, 2017, our effective income tax rate related to continuing operations was 12 percent, primarily due to the reduction in the U.S. federal tax rate. On December 22, 2017, the U.S. government enacted comprehensive tax legislation, commonly referred to as the "Tax Act". The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes and changing how foreign earnings are subject to U.S. tax. The Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. The Company has not completed our determination of the accounting implications of the Tax Act on its tax accruals. However, the Company reasonably estimated the effects of the Tax Act and recorded provisional amounts in the financial statements as of December 31, 2017. Consistent with guidance issued by the SEC, which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Act, the Company provisionally recorded an income tax benefit of $6.5 million related to the Tax Act. This amount is comprised of a $10.3 million tax benefit from the remeasurement of federal net deferred tax liabilities resulting from the reduction in the U.S. statutory corporate tax rate to 21% from 35%, less $3.8 million of tax expense from the mandatory one-time tax on the accumulated earnings of its foreign subsidiaries. As the Company completes its analysis of the Tax Act, collects and prepares necessary data and interprets any additional guidance issued by the U.S. Treasury Department, the IRS and other standard-setting bodies, adjustments to the provisional amounts may be required. In addition, adjustments to the provisional amounts may be needed to reflect legislative actions by the various U.S. states related to application of the Tax Act provisions on 2017 state tax returns. These adjustments could significantly impact the Company’s provision for income taxes in the period in which the adjustments are made. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them. As a result, the Company did not provide deferred income taxes on the 2017 unremitted earnings of our German operations. In addition, in the second quarter of 2017, the deferred tax liability of $4.1 million which was recorded in 2016 on unremitted German earnings was eliminated with a reduction to income tax expense. As noted above, the Tax Act includes a mandatory one-time tax on unremitted accumulated earnings of all foreign subsidiaries, and as a result, all previously unremitted earnings are now subject to U.S. tax and a liability of $3.8 million was recorded thereon as of December 31, 2017. Beginning in 2018, the Tax Act will generally provide a 100% deduction for U.S. federal tax purposes of dividends received by the Company from its foreign subsidiaries. The Company is currently evaluating the potential U.S. federal and state and foreign tax liabilities that would result from future repatriations, if any, and how the Tax Act will affect the Company's existing accounting assertion with regard to the indefinite reinvestment of undistributed foreign earnings. The Company will complete this evaluation and determine the impacts, if any, of U.S. federal and state and foreign legislation on its indefinite reinvestment assertion within the one-year measurement period. For the year ended December 31, 2016, our effective income tax rate related to continuing operations was 29 percent. The adoption of ASU 2016-09 allowed excess tax benefits from share-based payments to be shown as a reduction to income tax expense and reduced the rate for the year by 3 percent. For the year ended December 31, 2015, our effective income tax rate related to continuing operations was 33 percent and included the benefit from recognizing R&D Credits earned in prior periods. For a reconciliation of effective tax rate to the U.S. federal statutory tax rate, see Note 6 of Notes to Consolidated Financial Statements, "Income Taxes." 38 Liquidity and Capital Resources Net cash flow provided by (used in): Operating activities Investing activities: Capital expenditures Acquisitions Asset acquisition Proceeds on sale of discontinued operations Other investing activities Total Financing activities Effect of exchange rate changes on cash and cash equivalents Year Ended December 31, 2017 2016 2015 $ 100.0 $ 115.8 $ 111.2 (42.7) (43.1) (8.0) — (1.2) (95.0) (3.8) 0.2 (68.5) — — — 0.3 (68.2) (48.4) (0.3) (1.1) $ (48.1) (118.2) — 5.4 0.8 (160.1) (18.8) (0.7) (68.4) Net increase (decrease) in cash and cash equivalents $ 1.4 $ Operating Cash Flow Commentary • Cash provided by operating activities of $100 million for the year ended December 31, 2017 was $15.8 million less than cash provided by operating activities of $115.8 million in the prior year. The unfavorable comparison was primarily due to a $9.8 million decrease in operating income and an increase of $10.6 million in our investment in working capital for the year ended December 31, 2017. These items were offset by lower cash tax payments and lower contributions and benefit payments for post-retirement benefit obligations in 2017. • Cash provided by operating activities of $115.8 million for the year ended December 31, 2016 was $16.7 million favorable to cash provided by operating activities of $111.2 million in the prior year. The favorable comparison was primarily due to a a $12.7 million increase in operating income and the benefits of higher utilization of U.S. federal R&D Credits. These favorable variances were partially offset by higher post-retirement benefit contributions in 2016 and a decrease of $1.8 million in our investment in working capital in the prior year compared to an increase of $1.2 million in our investment in working capital for the year ended December 31, 2016. F o r m 1 0 - K Investing Commentary: • • • For the years ended December 31, 2017 and 2016, cash used by investing activities was $95.0 million and $68.2 million, respectively. Capital expenditures for the year ended December 31, 2017 were $42.7 million compared to spending of $68.5 million in the prior year. The capital expenditures were higher than normal in the prior year, due to the U.S. transportation filtration project which was completed in 2016. For the year ended December 31, 2017, cash used by investing activities includes $43.1 million for the Coldenhove Acquisition and $8.0 million for acquisition of a laminating asset. For the year ended December 31, 2015, cash used by investing activities includes $118.2 million for the FiberMark Acquisition. For the year ended December 31, 2015, we received net cash proceeds of $5.4 million from the sale of the Lahnstein Mill. • Capital expenditures for the year ended December 31, 2016 were $68.5 million compared to spending of $48.1 million in the prior year. The capital expenditures were higher than normal due to the U.S. Filtration project which was completed in 2016. • For 2018, we expect aggregate annual capital expenditures to be within our target range of approximately 3 to 5 percent of net sales. We believe that the level of our capital spending can be more than adequately funded from cash 39 provided from operating activities and allows us to maintain the efficiency and cost effectiveness of our assets and also invest in expanded manufacturing capabilities to successfully pursue strategic initiatives and deliver attractive returns. Financing Commentary: Our liquidity requirements are provided by cash generated from operations and short and long-term borrowings. • For the year ended December 31, 2017, cash used by financing activities was $3.8 million compared to cash used by financing activities of $48.4 million for the prior year. The decrease was due to higher net debt borrowings and lower share repurchases, offset by higher dividends paid in 2017. For the year ended December 31, 2016, cash used by financing activities was $48.4 million compared to cash used by financing activities of $18.8 million for the prior year. The change was due to higher net debt repayments, and higher share repurchases and dividends paid in 2016. • We have the following short- and long-term borrowings: Secured Bank Credit Facility In December 2014, we entered into the Third Amended Credit Agreement. The Third Amended Credit Agreement, among other things: (1) increased the maximum principal amount of our existing credit facility for the U.S. Revolving Credit Facility to $125 million; (2) established the German Revolving Credit Facility in the maximum principal amount of $75 million; (3) caused Neenah and the other domestic borrowers to guarantee, among other things, the obligations arising under the German Revolving Credit Facility; (4) provides for the Global Revolving Credit Facilities to mature on December 18, 2019; and (5) provides for an accordion feature permitting one or more increases in the Global Revolving Credit Facilities in an aggregate principal amount not exceeding $50 million, such that the aggregate commitments under the Global Revolving Credit Facilities do not exceed $250 million. In addition, domestic borrowers may request letters of credit under the U.S. Revolving Credit Facility in an aggregate face amount not to exceed $20 million outstanding at any time, and German borrowers may request letters of credit under the German Revolving Credit Facility in an aggregate face amount not to exceed $2 million outstanding at any time. See Note 7 of Notes to Consolidated Financial Statements, "Debt." Unsecured Senior Notes We have $175 million of 2021 Senior Notes. Proceeds from this offering were used to retire the remaining principal amount of 2014 Senior Notes, to repay approximately $56 million in outstanding revolver borrowings under our bank credit agreement and for general corporate purposes. See Note 7 of Notes to Consolidated Financial Statements, "Debt." Other Debt In June 2014, we repaid the remaining €3.7 million ($5.2 million) in outstanding project financing borrowings under the German Loan Agreement. The Second German Loan Agreement provides for €9.0 million of construction financing which is secured by the melt blown machine. The loan matures in September 2022 and principal is repaid in equal quarterly installments. At December 31, 2017, €5.3 million ($6.4 million, based on exchange rates at December 31, 2017) was outstanding under the Second German Loan Agreement. • Availability under our revolving credit facility varies over time depending on the value of our inventory, receivables and various capital assets. As of December 31, 2017, we had $76.9 million outstanding under our Revolver and $91.9 million of available credit (based on exchange rates at December 31, 2017). • We have required debt payments through December 31, 2017 of $1.4 million on the Second German Loan Agreement. • For the year ended December 31, 2017, cash and cash equivalents increased $1.4 million to $4.5 million at December 31, 2017 from $3.1 million at December 31, 2016. Total debt increased $34.6 million to $255.5 million at December 31, 2017 from $220.9 million at December 31, 2016. Net debt (total debt minus cash and cash equivalents) increased by $33.2 million primarily due to the Coldenhove Acquisition. 40 • As of December 31, 2017, majority of our cash balance was held at entities outside of the U.S. As of December 31, 2017, there were no restrictions regarding the repatriation of our non-U.S. cash. Transactions with Shareholders • • • • For the years ended December 31, 2017 and 2016, we paid quarterly cash dividends of $0.37 per common share or $25.1 million annually and $0.33 per common share or $22.4 million annually, respectively. In November 2017, our Board of Directors approved an 11 percent increase in the quarterly dividend rate on our common stock to $0.41 per share, scheduled to be paid in March 2018. In May 2017, our Board of Directors authorized the 2017 Stock Purchase Plan which was in effect till December 31, 2017. In November 2017, our Board of Directors authorized a program for the purchase of up to $25 million of outstanding common stock effective January 1, 2018 ("2018 Stock Purchase Plan"). The program does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. Purchases under the 2018 Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. For the year ended December 31, 2017, we acquired approximately 85,354 shares of Common Stock at a cost of $6.8 million. For further details on our Stock Purchase Plans refer to Note 10 of Notes to Consolidated Financial Statements, "Stockholders' Equity." For the years ended December 31, 2017 and 2016, we acquired approximately 28,000 and 46,000 of Common Stock, respectively, at a cost of $2.5 million and $3.8 million, respectively, for shares surrendered by employees to pay taxes due on vested restricted stock awards and stock appreciation rights exercised. In addition, we received $0.4 million in proceeds from the exercise of employee stock options for each of the years ended December 31, 2017 and 2016. • Under the most restrictive terms of the Third Amended and Restated Credit Agreement, we are permitted to pay cash dividends on or repurchase shares of our common stock up to the amount available under the Third Amended and Restated Credit Agreement, as long as the availability under the Third Amended and Restated Credit Agreement exceeds $25 million. If the availability is below $25 million, we are restricted from paying dividends or repurchasing shares. As of December 31, 2017, our availability exceeded $25 million, so this restriction did not apply. See our availability under the Third Amended and Restated Credit Agreement in Note 7 of Notes to Consolidated Financial Statements, "Debt." Under the most restrictive terms of the 2021 Senior Notes, we are permitted to pay cash dividends of up to $25 million in a calendar year, but not permitted to repurchase shares of our common stock. However, as long as the net leverage ratio (net debt/EBITDA) under the 2021 Senior Notes is below 2.5x, we can pay dividends or repurchase shares without limitation. In the event the net leverage ratio exceeds 2.5x, we may still pay dividends in excess of $25 million or repurchase shares by utilizing "restricted payment baskets" as defined in the indenture for the 2021 Senior Notes. As of December 31, 2017, since our leverage ratio was less than 2.5x, none of these covenants were restrictive to our ability to pay dividends on or repurchase shares of our common stock. Other Items: • As of December 31, 2017, we had $44.0 million of state NOLs. Our state NOLs may be used to offset approximately $2.6 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2018 and 2036. In addition, we had $15.5 million of U.S. federal and $6.9 million of U.S. state R&D Credits which, if not used, will expire between 2030 and 2037 for the U.S. federal R&D Credits and between 2020 and 2032 for the state R&D Credits. Management believes that our ability to generate cash from operations and our borrowing capacity are adequate to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate adequate cash from operations beyond 2017 will depend on, among other things, our ability to successfully implement our business strategies, control costs in line with market conditions and manage the impact of changes in input prices and currencies. We can give no assurance we will be able to successfully implement these items. F o r m 1 0 - K 41 Contractual Obligations The following table presents the total contractual obligations for which cash flows are fixed or determinable as of December 31, 2017: (In millions) 2018 2019 2020 2021 2022 Beyond 2022 Total Long-term debt payments Interest payments on long-term debt (a) Open purchase orders (b) Other post-employment benefit obligations (c) Contributions to pension trusts Minimum purchase commitments (d) Operating leases $ 1.4 $ 78.2 $ 1.3 $ 176.4 $ 1.0 $ — $ 258.3 11.4 67.0 5.3 14.7 12.3 4.0 11.3 — 4.3 — 6.1 2.6 9.3 — 4.6 — — 2.1 4.3 — 4.9 — — 1.8 — — 4.8 — — 1.6 — — 18.1 — — 3.7 36.3 67.0 42.0 14.7 18.4 15.8 Total contractual obligations $ 116.1 $ 102.5 $ 17.3 $ 187.4 $ 7.4 $ 21.8 $ 452.5 _______________________ (a) Interest payments on long-term debt includes interest on variable rate debt at December 31, 2017 weighted average interest rates. (b) The open purchase orders displayed in the table represent amounts we anticipate will become payable within the next 12 months for goods and services that we have negotiated for delivery. (c) The above table includes future payments that we will make for postretirement benefits other than pensions. Those amounts are estimated using actuarial assumptions, including expected future service, to project the future obligations. (d) The minimum purchase commitments in 2018 are primarily for coal and corn starch contracts. Although we are primarily liable for payments on the above operating leases and minimum purchase commitments, based on historic operating performance and forecasted future cash flows, we believe our exposure to losses, if any, under these arrangements is not material. Adoption of New Accounting Pronouncements See Note 2 of Notes to Consolidated Financial Statements, "Summary of Significant Accounting Policies — Recently Adopted Accounting Standards" for a description of accounting standards adopted in the year ended December 31, 2017. Critical Accounting Policies and Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires estimates and assumptions that affect the reported amounts and related disclosures of assets and liabilities at the date of the financial statements and net sales and expenses during the reporting period. Actual results could differ from these estimates, and changes in these estimates are recorded when known. The critical accounting policies used in the preparation of the consolidated financial statements are those that are important both to the presentation of financial condition and results of operations and require significant judgments with regard to estimates used. These critical judgments relate to the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of expenses. 42 The following summary provides further information about the critical accounting policies and should be read in conjunction with the notes to the consolidated financial statements. We believe that the consistent application of our policies provides readers of our financial statements with useful and reliable information about our operating results and financial condition. We have discussed the application of these critical accounting policies with our Board of Directors and Audit Committee. Inventories We value U.S. inventories at the lower of cost, using the Last-In, First-Out ("LIFO") method, or market. German and Dutch inventories are valued at the lower of cost, using a weighted-average cost method, or market. The First-In, First-Out value of U.S. inventories valued on the LIFO method was $120.1 million and $106.8 million at December 31, 2017 and 2016, respectively and exceeded such LIFO value by $10.5 million and $8.2 million, respectively. Cost includes labor, materials and production overhead. Under the LIFO inventory valuation method, changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these materials and other costs may have been incurred at significantly different values due to the length of time of our production cycle. Since we value most of our inventory utilizing the LIFO inventory costing methodology, rapid changes in raw material costs have an impact on our operating results. Income Taxes Significant judgment is required in determining our global provision for income taxes and recording the related tax assets and liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is less than certain. Our effective income tax rates include the tax effects of certain special items, such as foreign tax rate differences, tax effects of foreign financing structures, R&D Credits and excess tax benefits from stock compensation. While we believe that these judgments and estimates are appropriate and reasonable under the circumstances, actual resolution of these matters may differ from recorded estimated amounts. As of December 31, 2017, we have aggregate deferred income tax assets of $10.1 million related to temporary differences, net operating losses and R&D Credits of the state of Wisconsin only. U.S. federal R&D Credits are netted against deferred income tax liabilities. As of December 31, 2016, our aggregate deferred income tax assets were $6.1 million and included all deferred attributes of U.S. federal and state jurisdictions. As of December 31, 2016, we recorded a valuation allowance of $3.1 million against a portion of our U.S. state R&D Credits. In determining the need for a valuation allowance, we consider many factors, including specific taxing jurisdictions, sources of taxable income, income tax strategies and forecasted earnings for the entities in each jurisdiction. A valuation allowance would be recognized if, based on the weight of available evidence, we conclude that it is more likely than not that some portion or all of the deferred income tax assets will not be realized. As of December 31, 2017 and 2016, our liability for uncertain income taxes positions was $10.0 million and $10.3 million, respectively. In evaluating and estimating tax positions and tax benefits, we consider many factors which may result in periodic adjustments and which may not accurately anticipate actual outcomes. F o r m 1 0 - K Pension and Other Postretirement Benefits Consolidated pension expense related to continuing operations for defined benefit pension plans was $7.0 million, $9.5 million and $6.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. Accounting for defined benefit pension plans requires various assumptions, including, but not limited to, discount rates, expected long-term rates of return on plan assets, future compensation growth rates and mortality rates. Accounting for our postretirement benefit plans also requires various assumptions, which include, but are not limited to, discount rates and annual rates of increase in the per capita costs of health care benefits. The following chart summarizes the more significant assumptions used in the actuarial valuation of our defined benefit plans for each of the past three years: 43 Pension plans Weighted average discount rate for benefit expense Weighted average discount rate for benefit obligation Expected long-term rate on plan assets Rate of compensation increase Postretirement benefit plans Weighted average discount rate for benefit expense Weighted average discount rate for benefit obligation Health care cost trend rate assumed for next year Ultimate cost trend rate Year that the ultimate cost trend rate is reached 2017 2016 2015 4.18% 4.54% 3.91% 3.49% 4.16% 4.54% 6.31% 6.20% 6.50% 2.49% 2.18% 2.92% 3.89% 4.07% 4.05% 3.27% 3.69% 4.07% 6.80% 7.00% 7.30% 4.50% 4.50% 4.50% 2027 2037 2037 The discount (or settlement) rate that is utilized for determining the present value of future pension obligations in the U.S. is generally based on the yield for a theoretical basket of AA-rated corporate bonds currently available in the market place, whose duration matches the timing of expected pension benefit payments. The discount (or settlement) rate that is utilized for determining the present value of future pension obligations in Germany is generally based on the IBOXX index of AA- rated corporate bonds adjusted to match the timing of expected pension benefit payments. The expected long-term rate of return on pension fund assets held by our pension trusts was determined based on several factors, including input from pension investment consultants and projected long-term returns of broad equity and bond indices. We also considered the plans' historical 10-year and 15-year compounded annual returns. We evaluate our investment strategy and long-term rate of return on pension asset assumptions at least annually. For the years ended December 31, 2017, 2016 and 2015, consolidated postretirement health care and life insurance plan benefit expense was $2.7 million, $3.3 million and $3.4 million, respectively. The discount (or settlement) rate that is utilized for determining the present value of future postretirement health care and life insurance plan benefit obligations in the U.S. is generally based on the yield for a theoretical basket of AA-rated corporate bonds currently available in the market place, whose duration matches the timing of expected postretirement health care and life insurance benefit payments. The discount (or settlement) rate that is utilized for determining the present value of future postretirement health care and life insurance obligations for our foreign benefit plans is generally based on an index of AA-rated corporate bonds adjusted to match the timing of expected benefit payments. We evaluate these assumptions at least once each year or as facts and circumstances dictate and we make changes as conditions warrant. Changes to these assumptions will increase or decrease our reported net periodic benefit expense, which will result in changes to the recorded benefit plan assets and liabilities. Useful Life and Impairment of Long-Lived Assets Property, Plant and Equipment For financial reporting purposes, depreciation is principally computed on the straight-line method over estimated useful asset lives. The weighted average remaining useful lives for buildings, land improvements and machinery and equipment are approximately 20 years, 12 years and 9.5 years respectively. We also use units-of-production method of depreciation for the U.S. transportation filtration production assets with a gross book value of $66.6 million, which reflects the nature of the assets' utilization. Property, plant and equipment are tested for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment ("ASC Topic 360"), whenever events or changes in circumstances indicate that the carrying amounts of such long-lived assets may not be recoverable from future net pre-tax cash flows. Impairment testing requires significant management judgment including estimating the future success of product lines, future sales volumes, growth rates for selling prices and costs, alternative uses for the assets and estimated proceeds from disposal of the assets. Impairment testing is conducted at the lowest level where cash flows can be measured and are independent of cash flows of other assets. An asset impairment would be indicated if the sum of the expected future net pre-tax cash flows from the use of the asset (undiscounted and without interest charges) is less than the carrying amount of the asset. An impairment loss would be measured based on the difference between the fair value of the asset and its carrying amount. We determine fair value 44 based on an expected present value technique using multiple cash flow scenarios that reflect a range of possible outcomes and a risk free rate of interest are used to estimate fair value. The estimates and assumptions used in the impairment analysis are consistent with the business plans and estimates we use to manage our business operations. The use of different assumptions would increase or decrease the estimated fair value of the asset and would increase or decrease the impairment charge. Actual outcomes may differ from the estimates. Goodwill and Other Intangible Assets with Indefinite Lives We test goodwill for impairment at least annually in conjunction with preparation of Neenah's annual business plan, or more frequently if events or circumstances indicate it might be impaired. We tested goodwill for impairment as of November 30, 2017. We elected the option under ASC Topic 350, Intangibles — Goodwill and Other, to perform a qualitative assessment of our reporting units to determine whether further impairment testing is necessary. In this qualitative assessment, we considered the following items for each of the reporting units: macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In addition, for each of these reporting units, the most recent fair value determination results in an amount that exceeds the carrying amount of the reporting units. Based on these assessments, we determined that the likelihood that a current fair value determination would be less than the current carrying amount of the reporting unit is not more likely than not. As of November 30, 2017 no impairment was indicated. Other Intangible Assets Certain trade names are estimated to have indefinite useful lives and as such are not amortized. Intangible assets with indefinite lives are annually reviewed for impairment in accordance with ASC Topic 350. Acquired intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful lives, and reviewed for impairment in accordance with ASC Topic 360. Intangible assets consist primarily of customer relationships, trade names and acquired intellectual property. Such intangible assets are amortized using the straight-line method over estimated useful lives of between 10 and 15 years. Our annual test of other intangible assets for impairment at November 30, 2017, 2016 and 2015 indicated that the carrying amount of such assets was recoverable. F o r m 1 0 - K Acquisition Accounting We account for acquisitions under ASC Topic 805, which requires companies to record assets acquired and liabilities assumed at their respective fair market values at the date of acquisition. The accounting for acquisitions involves a considerable amount of judgment and estimate, including the fair value of certain forms of consideration; fair value of acquired intangible assets involving projections of future revenues and cash flows that are then either discounted at an estimated discount rate or measured at an estimated royalty rate; fair value of other acquired assets and assumed liabilities, including potential contingencies; and the useful lives of the acquired assets. The assumptions used are determined at the time of the acquisition in accordance with accepted valuation models. Projections are developed using internal forecasts, available industry and market data and estimates of long-term rates of growth for our business. The impact of prior or future acquisitions on our financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates. Refer to Note 4, “Acquisitions”, of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for further discussion of business combination accounting valuation methodology and assumptions. Item 7A. Quantitative and Qualitative Disclosures About Market Risk As a multinational enterprise, we are exposed to risks such as changes in commodity prices, foreign currency exchange rates, interest rates and environmental regulation. A variety of practices are employed to manage these risks, including operating and financing activities and, where deemed appropriate, the use of derivative instruments. Derivative instruments are used only for risk management purposes and not for speculation or trading. Presented below is a description of our most significant risks. 45 Foreign Currency Risk Our reported operating results are affected by changes in the exchange rates of the local currencies of our non-U.S. operations relative to the U.S. dollar. For the year ended December 31, 2017, a hypothetical 10 percent strengthening of the U.S dollar relative to the local currencies of our non-U.S. operations would have decreased our income before income taxes by approximately $3.9 million. We do not hedge our exposure to exchange risk on reported operating results. The translation of the balance sheets of our non-U.S. operations from their local currencies into U.S. dollars is also sensitive to changes in the exchange rate of the U.S. dollar. Consequently, we performed a sensitivity test to determine if changes in the exchange rate would have a significant effect on the translation of the balance sheets of our non-U.S. operations into U.S. dollars. These translation gains or losses are recorded as unrealized translation adjustments ("UTA", a component of accumulated other comprehensive income) within stockholders' equity. The hypothetical change in UTA is calculated by multiplying the net assets of our non-U.S. operations by a 10 percent change in the exchange rate of their local currencies compared to the U.S. dollar. As of December 31, 2017, the net assets of our non-U.S. operations exceeded their net liabilities by approximately $214 million. As of December 31, 2017, a 10 percent strengthening of the U.S. dollar relative to the local currencies of our non-U.S. operations would have decreased our stockholders' equity by approximately $22 million. Commodity Risk Pulp We purchase the wood pulp used to produce our products on the open market, and, as a result, the price and other terms of those purchases are subject to change based on factors such as worldwide supply and demand and government regulation. We do not have significant influence over the price paid for our wood pulp purchases. Therefore, an increase in wood pulp prices could occur at the same time that prices for our products are decreasing and have an adverse effect on our results of operations, financial position and cash flows. Based on 2017 pulp purchases, a $100 per ton increase in the average market price for pulp would have increased our annual costs for pulp purchases by approximately $23 million. Other Manufacturing Inputs We purchase a substantial portion of the other manufacturing inputs necessary to produce our products on the open market, and, as a result, the price and other terms of those purchases are subject to change based on factors such as worldwide supply and demand and government regulation. We do not have significant influence over our costs for such manufacturing inputs. Therefore, an increase in other manufacturing inputs could occur at the same time that prices for our products are decreasing and have an adverse effect on our results of operations, financial position and cash flows. Our technical products business acquires certain of its specialized pulp requirements from two global suppliers and certain critical specialty latex grades from a limited number suppliers. In general, these supply arrangements are covered by formal contracts and represent multi-year business relationships that have historically been sufficient to meet our needs. We expect these relationships to continue to operate in a satisfactory manner in the future. In the event of an interruption of production at any one supplier, we believe that each of these suppliers individually would be able to satisfy our short-term requirements for specialized pulp or specialty latex. In the event of a long-term disruption in our supply of specialized pulp or specialty latex, we believe we would be able to substitute other pulp grades or other latex grades that would allow us to meet required product performance characteristics and incur only a limited disruption in our production. As a result, we do not believe that the substitution of such alternative pulp or latex grades would have a material effect on our operations. We generate substantially all of the electrical energy used by our Munising mill and approximately 25 percent of the electrical energy at our Appleton and Bruckmühl mills. Availability of energy is not expected to be a problem in the foreseeable future, but the purchase price of such energy can and likely will fluctuate significantly based on fluctuations in demand and other factors. There is no assurance that that we will be able to obtain electricity or natural gas purchases on favorable terms in the future. Except for certain specialty latex grades and specialty softwood pulp used by our technical products business, we are not aware of any significant concentration of business transacted with a particular supplier. 46 Interest Rate Risk We are exposed to interest rate risk on our variable rate bank debt. At December 31, 2017, we had $76.9 million of variable rate borrowings outstanding. A 100 basis point increase in interest rates would increase our annual interest expense on outstanding variable rate borrowings by approximately $0.8 million. Environmental Regulation/Climate Change Legislation Our manufacturing operations are subject to extensive regulation primarily by U.S., German, Dutch and other international authorities. We have made significant capital expenditures to comply with environmental laws, rules and regulations. Due to changes in environmental laws and regulations, including potential future legislation to limit GHG emissions, the application of such regulations and changes in environmental control technology, we are not able to predict with certainty the amount of future capital spending to be incurred for environmental purposes. Taking these uncertainties into account, we have planned capital expenditures for environmental projects during the period 2018 through 2019 of approximately $1 million to $2 million annually. We believe these risks can be managed and will not have a material effect on our business or our consolidated financial position, results of operations or cash flows. Item 8. Financial Statements and Supplementary Data The information required in Item 8 is contained in and incorporated herein by reference from pages F-1 through F-55 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. F o r m 1 0 - K 47 Item 9A. Controls and Procedures Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures Our management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) or 15a-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2017. The scope of management's assessment of the effectiveness of internal control over financial reporting includes all of the Company's businesses except for the Coldenhove business acquired in November 2017. The Coldenhove business constituted approximately 8 percent of total assets and less than 1 percent of revenues and net income of the consolidated financial statement amounts as of and for the year ended December 31, 2017. Further discussion of this acquisition can be found in Note 4 "Acquisitions" to our consolidated financial statements. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based upon its assessment, management believes that as of December 31, 2017, the Company's internal controls over financial reporting were effective. The effectiveness of internal control over financial reporting as of December 31, 2017, has been audited by Deloitte & Touche LLP, the independent registered public accounting firm who also audited our consolidated financial statements. Deloitte & Touche's attestation report on the Company's internal control over financial reporting is included herein. See "Item 15, Exhibits and Financial Statement Schedule." Neenah, Inc. February 23, 2018 Changes in Internal Control Over Financial Reporting There has been no significant change in the Company's internal control over financial reporting during the three months ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Item 9B. Other Information None. 48 PART III Item 10. Directors and Executive Officers of the Registrant The information required to be set forth herein, except for the information included under Executive Officers of the Company, relating to nominees for director of Neenah and compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth under the captions "Election of Directors", "Meetings and Committees of the Board of Directors", "Corporate Governance" and "Section 16(a) Beneficial Ownership Reporting Compliance", respectively, in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2018. Such information is incorporated herein by reference. The definitive Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2017. Executive Officers of the Company Set forth below is information concerning our executive officers. Name John P. O'Donnell Matthew L. Duncan Steven S. Heinrichs Bonnie C. Lind Julie A. Schertell Byron J. Racki Armin Schwinn Position President, Chief Executive Officer and Director Senior Vice President, Chief Human Resource Officer Senior Vice President, General Counsel and Secretary Senior Vice President, Chief Financial Officer and Treasurer Senior Vice President — President, Fine Paper and Packaging Senior Vice President — President, Performance Materials Senior Vice President — Managing Director of Neenah Germany Larry N. Brownlee Vice President — Controller and Principal Accounting Officer F o r m 1 0 - K John P. O'Donnell, born in 1960, is our President and Chief Executive Officer and serves as a Director. He has been in that role since May 2011. Prior to becoming President and Chief Executive Office, Mr. O'Donnell served as our Senior Vice President, Chief Operating Officer since June 2010. In November 2007, Mr. O'Donnell joined Neenah as President, Fine Paper. Mr. O'Donnell was employed by Georgia-Pacific Corporation from 1985 until 2007 and held increasingly senior roles in the Consumer Products division. Mr. O'Donnell served as President of the North America Retail Business from 2004 through 2007, and as President of the North American Commercial Tissue business from 2002 through 2004. Matthew L. Duncan, born in 1973, is our Senior Vice President, Chief Human Resources Officer and has been in that role since joining Neenah in March 2016. Prior to his employment with Neenah, Mr. Duncan served as Vice President Human Resources for Coca-Cola Refreshments, the North American operating unit of The Coca-Cola Company. Before joining The Coca-Cola Company in 2008, Mr. Duncan served in a variety of Human Resource leadership roles with The Home Depot and Nestle. Steven S. Heinrichs, born in 1968, is our Senior Vice President, General Counsel and Secretary and has been in that role since June 2004 when he joined Kimberly-Clark as Chief Counsel, Pulp and Paper and General Counsel for Neenah, Inc. Prior to his employment with Kimberly-Clark, Mr. Heinrichs served as Associate General Counsel and Assistant Secretary for Mariner Health Care, Inc., a nursing home and long-term acute care hospital company. Before joining Mariner Health Care in 2003, Mr. Heinrichs served as Associate General Counsel and Assistant Secretary for American Commercial Lines LLC, a leading inland barge and shipbuilding company from 1998 through 2003. Mr. Heinrichs engaged in the private practice of law with Skadden, Arps, Slate, Meagher and Flom LLP and Shuttleworth, Smith, McNabb and Williams PLLC from 1994 through 1998. Mr. Heinrichs received his MBA from the Kellogg School of Management at Northwestern University in 2008, his law degree from Tulane University in 1994, and his Bachelor of Arts degree from the University of Virginia. 49 Bonnie C. Lind, born in 1958, is our Senior Vice President, Chief Financial Officer and Treasurer and has been in that role since June 2004. Ms. Lind was an employee of Kimberly-Clark from 1982 until 2004, holding a variety of increasingly senior financial and operations positions. From 1999 until June 2004, Ms. Lind served as the Assistant Treasurer of Kimberly-Clark and was responsible for managing Kimberly-Clark's global treasury operations. Prior to that, she was Director of Kimfibers with overall responsibility for the sourcing and distribution of pulp to Kimberly-Clark's global operations. Julie A. Schertell, born in 1969, is our Senior Vice President — President, Fine Paper and Packaging and has been in that role since January 2014. Ms. Schertell joined Neenah in 2008 and served as Vice President of Sales and Marketing for the Fine Paper division through December 2010 and as a Senior Vice President and President, Fine Paper through December 2013. Ms. Schertell was employed by Georgia-Pacific Corporation in the Consumer Products Retail division, where she served as Vice President of Sales Strategy from 2007-2008, and as Vice President of Customer Solutions from 2003 through 2007. Byron J. Racki, born in 1977, is a Senior Vice President of the Company and President, Performance Materials, and had been in that role since January 2017. Mr. Racki joined the Company in 2006 and has served in areas of increasing responsibility including Vice President of Sales and Marketing, Specialty Products in 2014 and 2015 and Vice President of Sales and Marketing for the Fine Paper division in 2012 and 2013. Prior to joining Neenah, Mr. Racki was employed by Kimberly-Clark in the Family Care division in various finance positions. Mr. Racki earned an MBA from the University of Texas at Austin and a Bachelor of Arts degree in Political Science and Economics from the University of Iowa. Armin Schwinn, born in 1959, has been our Senior Vice President — Managing Director of Neenah Germany since April 2010, and he is responsible for our filtration operating unit. Mr. Schwinn had been Vice President, Finance of Neenah Germany since our acquisition of FiberMark Germany in October 2006. Mr. Schwinn joined FiberMark Germany in 1995 and held increasingly senior positions within FiberMark Germany's financial, purchasing and administrative functions. Prior to this, Mr. Schwinn served in various leadership positions in other German manufacturing and service companies. Larry N. Brownlee, born in 1956, is our Vice President — Controller and Principal Accounting Officer and has been in that role since July 2004. From 1990 to 2004, Mr. Brownlee served as Controller of several public companies in the electric utility, telephone and healthcare industries. From 1979 to 1990, Mr. Brownlee was with Arthur Andersen & Co. and provided audit services to clients primarily in the manufacturing, utility and healthcare industries. Mr. Brownlee received his Masters of Accountancy from the University of Georgia in 1979. There are no family relationships among our directors or executive officers. Code of Ethics The Neenah, Inc. Code of Business Conduct and Ethics, applies to all directors, officers and employees of Neenah. The Code of Business Conduct and Ethics meets the requirements of a "code of ethics" as defined by Item 406 of Regulation S- K, and applies to our Chief Executive Officer, Chief Financial Officer (our principal financial officer) and Vice President — Controller (our principal accounting officer), as well as all other employees, as indicated above. The Code of Business Conduct and Ethics also meets the requirements of a code of conduct under New York Stock Exchange listing standards. The Code of Business Conduct and Ethics is posted on our web site at www.neenah.com under the links "Investor Relations — Corporate Governance — Code of Ethics" and print copies are available upon request without charge. You can request print copies by contacting our General Counsel in writing at Neenah, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005 or by telephone at 678-566-6500. We intend to disclose any amendments to the Code of Business Conduct and Ethics, as well as any waivers for executive officers or directors, on our web site at www.neenah.com. Information on our web site is not incorporated by reference in this document. Item 11. Executive Compensation Information relating to executive compensation and other matters is set forth under the captions "Compensation, Discussion and Analysis", "Additional Executive Compensation", "Director Compensation", and "Compensation Committee Report" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference. 50 Item 12. Security Ownership of Certain Beneficial Owners and Management Information relating to ownership of common stock of Neenah by certain persons is set forth under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference. Information regarding securities authorized for issuance under equity compensation plans of Neenah is set forth under the caption "Equity Compensation Plan Information" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions and Director Independence Information relating to existing or proposed relationships or transactions between Neenah and any affiliate of Neenah is set forth under the caption "Certain Relationships and Related Transactions" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information relating to Neenah's principal accounting fees and services is set forth under the caption "Independent Registered Public Accounting Firm Fees and Services" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference. F o r m 1 0 - K 51 PART IV Item 15. Exhibits and Financial Statement Schedule (a) Documents filed as part of this report: 1. Consolidated Financial Statements The following reports and financial statements are filed herewith on the pages indicated: Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations Consolidated Statements of Other Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Changes in Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2. Financial Statement schedule The following schedule is filed herewith: Page F-2 F-3 F-4 F-5 F-6 F-7 F-8 F-9 Schedule II — Valuation and Qualifying Accounts F-55 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. 3. Exhibits See (b) below (b) Exhibits The following exhibits are filed with or incorporated by reference in this report. Where such filing is made by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses. We will furnish any exhibit at no cost upon written request to us at: Investor Relations, Neenah, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005. Exhibit Number 2.1 Exhibit Interest Purchase Agreement by and among ASP FiberMark Holdings, LLC, ASP FiberMark, LLC, Neenah FMK Holdings, LLC and Neenah Paper, Inc. dated as of July 16, 2015 (filed as Exhibit 2.1 to the Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three months ended September 30, 2015, filed November 9, 2015 and incorporated herein by reference). 2.2 Asset Purchase Agreement, by and among Neenah Paper, Inc., Wausau Paper Corp. and Wausau Paper Mills, LLC, dated as of December 7, 2011 (filed as Exhibit 2.1 to the Neenah Paper, Inc. Current Report on Form 8-K filed January 31, 2012 and incorporated herein by reference). 52 Exhibit Number 2.30 + 3.1 3.2 3.3 4.1 4.2 10.1 10.3* 10.4* 10.5* 10.6* 10.7* 10.8* 10.9* Exhibit Securities Purchase Agreement by and among Crane Technical Materials, Inc., Crane & Co., Inc., Neenah Paper, Inc. and Neenah Filtration, LLC dated as of June 2, 2014 (filed as Exhibit 2.1 to the Neenah Paper, Inc. Quarterly Report on Form 10-Q for the three months ended June 30, 2014, filed August 7, 2014) (confidential treatment has been granted for certain portions of this exhibit pursuant to a Confidential Treatment Request filed with the Securities Exchange Commission). Amended and Restated Certificate of Incorporation of Neenah Paper, Inc. (filed as Exhibit 3.1 to the Neenah Paper, Inc. Current Report on Form 8-K filed November 30, 2004 and incorporated herein by reference). Second Amended and Restated Bylaws of Neenah, Inc. (filed as Exhibit 3.2 to the Neenah, Inc. Current Report on Form 8-K filed January 3, 2018 and incorporated herein by reference). Certificate of Ownership & Merger merging Neenah, Inc. into Neenah Paper, Inc., dated December 11, 2017 (filed herewith) Indenture dated as of May 23, 2013, by and among the Company, the Guarantors named therein, and the 2021 Notes Trustee filed as Exhibit 4.1 to the Neenah Paper, Inc. Current Report on Form 8-K, filed May 24, 2013 and incorporated herein by reference). Form of Notation of Subsidiary Guarantee (included as Exhibit E to Exhibit 4.1). Tax Sharing Agreement dated as of November 30, 2004 by and between Kimberly-Clark Corporation and Neenah Paper, Inc. (filed as Exhibit 10.2 to the Neenah Paper, Inc. Current Report on Form 8-K filed November 30, 2004 and incorporated herein by reference). Neenah Paper Supplemental Pension Plan (filed as Exhibit 10.5 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2012, filed March 7, 2013 and incorporated herein by reference). First Amendment to Neenah Paper Supplemental Pension Plan (filed as Exhibit 10.31 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 4, 2014 and incorporated herein by reference). Neenah Paper Amended and Restated Supplemental Retirement Contribution Plan, effective as of January 1, 2016 (filed as Exhibit 10.5 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 24, 2017 and incorporated herein by reference). Neenah Paper Executive Severance Plan (filed as Exhibit 10.7 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2012, filed March 7, 2013 and incorporated herein by reference). F o r m 1 0 - K First Amendment to Neenah Paper Executive Severance Plan (filed as Exhibit 10.33 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 4, 2014 and incorporated herein by reference). Neenah Paper, Inc. Amended and Restated 2004 Omnibus Stock and Incentive Compensation Plan (filed as Annex A to the Neenah Paper, Inc. Definitive Proxy Statement on Schedule 14A for the year ended December 31, 2013, filed April 12, 2013 and incorporated herein by reference). Neenah Paper Deferred Compensation Plan approved on December 11, 2006 (filed as Exhibit 10.21 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2012, filed March 7, 2013 and incorporated herein by reference). 10.10* Neenah Paper Directors' Deferred Compensation Plan approved on December 11, 2006. (filed as Exhibit 10.22 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2012, filed March 7, 2013 and incorporated herein by reference). 10.11 + Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as Exhibit 10.31 to the Neenah Paper, Inc. Annual Report on Form 10-K for the year ended December 31, 2014, filed February 27, 2015 and incorporated herein by reference) (confidential treatment has been granted for certain portions of this exhibit pursuant to a Confidential Treatment Request filed with the Securities Exchange Commission). 10.12 10.13 First Amendment, dated as of July 28, 2016, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as Exhibit 99.1 to the Neenah Paper, Inc. Current Report on Form 8-K, filed August 2, 2016 and incorporated herein by reference). Second Amendment, dated as of December 13, 2016, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as Exhibit 99.1 to the Neenah Paper, Inc. Current Report on Form 8-K, filed December 16, 2016 and incorporated herein by reference). 53 Exhibit Number 10.14* 10.15 10.16 12 21 23 24 31.1 31.2 32.1 32.2 Exhibit Form of Performance Share Award as of 2017 (filed as Exhibit 10.1 to Neenah Paper, Inc. Current Report on Form 8-K filed February 3, 2017 and incorporated by reference herein). Third Amendment, dated as of August 30, 2017, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed as Exhibit 10.1 to the Neenah Paper, Inc. Quarterly Report on Form 10-Q, filed November 8, 2017 and incorporated herein by reference). Fourth Amendment, dated as of December 14, 2017, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders (filed herewith). Statement Regarding Computation of Ratio of Earnings to Fixed Charges (filed herewith) List of Subsidiaries of Neenah, Inc. (filed herewith). Consent of Deloitte & Touche LLP (filed herewith) Power of Attorney (filed herewith) Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (filed herewith). Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (filed herewith). Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith). Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith). 101.INS XBRL Instance Document (filed herewith). 101.SC H 101.CA L 101.DE F 101.LA B XBRL Taxonomy Extension Schema Document (filed herewith). XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). XBRL Taxonomy Extension Label Linkbase Document (filed herewith). 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). _______________________ * Indicates management contract or compensatory plan or arrangement. + Pursuant to a confidential treatment request portions of this exhibit have been furnished separately to the Securities and Exchange Commission. (c) Financial Statement Schedule See Item 15(a) (2) above Item 16. Form 10-K Summary None. 54 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Neenah, Inc. By: /s/ JOHN P. O'DONNELL Name: Title: John P. O'Donnell President, Chief Executive Officer and Director (in his capacity as a duly authorized officer of the Registrant and in his capacity as Chief Executive Officer) February 23, 2018 Date: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ JOHN P. O'DONNELL John P. O'Donnell /s/ BONNIE C. LIND Bonnie C. Lind /s/ LARRY N. BROWNLEE Larry N. Brownlee President, Chief Executive Officer and Director (Principal Executive Officer) Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) Vice President — Controller (Principal Accounting Officer) /s/ SEAN T. ERWIN* Chairman of the Board and Director Sean T. Erwin /s/ WILLIAM M. COOK* Director William M. Cook /s/ MARGARET S. DANO* Director Margaret S. Dano /s/ TIMOTHY S. LUCAS* Director Timothy S. Lucas /s/ JOHN F. MCGOVERN* Director John F. McGovern /s/ PHILIP C. MOORE* Director Philip C. Moore /s/ STEPHEN M. WOOD* Director Stephen M. Wood *By: /s/ STEVEN S. HEINRICHS Steven S. Heinrichs Senior Vice President, General Counsel and Secretary Attorney-in-fact 55 F o r m 1 0 - K February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 February 23, 2018 (This page has been left blank intentionally.) TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations Consolidated Statements of Other Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Changes in Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Page F-2 F-3 F-4 F-5 F-6 F-7 F-8 F-9 F o r m 1 0 - K 56 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Neenah, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Neenah, Inc. and subsidiaries (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2017, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Atlanta, Georgia February 23, 2018 We have served as the Company's auditor since 2003. F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Neenah, Inc. To the stockholders and the Board of Directors of Neenah, Inc. Opinion on Internal Control over Financial Reporting Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Neenah, Inc. and subsidiaries (the “Company”) as of We have audited the internal control over financial reporting of Neenah, Inc. and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2017, of the Company and our report dated February 23, 2018, expressed an unqualified opinion on those December 31, 2017, of the Company and our report dated February 23, 2018, expressed an unqualified opinion on those consolidated financial statements and financial statement schedule. consolidated financial statements and financial statement schedule. As described in Management's Annual Report on Internal Control Over Financial Reporting, management excluded from As described in Management's Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at W.A. Sanders Coldenhove Holding B.V., which was acquired its assessment the internal control over financial reporting at W.A. Sanders Coldenhove Holding B.V., which was acquired on November 1, 2017 and whose financial statements constitute approximately eight percent of total assets and less than on November 1, 2017 and whose financial statements constitute approximately eight percent of total assets and less than one percent of revenues and net income of the consolidated financial statement amounts as of and for the year ended one percent of revenues and net income of the consolidated financial statement amounts as of and for the year ended December 31, 2017. Accordingly, our audit did not include the internal control over financial reporting at W.A. Sanders December 31, 2017. Accordingly, our audit did not include the internal control over financial reporting at W.A. Sanders Coldenhove Holding B.V. Coldenhove Holding B.V. Basis for Opinion Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP /s/ Deloitte & Touche LLP Atlanta, Georgia Atlanta, Georgia February 23, 2018 February 23, 2018 F-3 F-3 F o r m 1 0 - K NEENAH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share data) Year Ended December 31, 2017 2016 2015 $ 979.9 $ 941.5 $ Net sales Cost of products sold Gross profit Selling, general and administrative expenses Acquisition/integration/restructuring costs Insurance settlement Pension and SERP plan settlement charges Other (income) expense — net Operating income Interest expense Interest income Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Loss from discontinued operations, net of taxes (Note 13) 781.2 198.7 96.5 1.3 (3.2) 0.6 (0.8) 104.3 12.7 (0.1) 91.7 11.4 80.3 — 727.0 214.5 92.2 7.0 — 0.8 0.4 114.1 11.2 (0.1) 103.0 29.6 73.4 (0.4) 73.0 4.33 (0.02) 4.31 4.26 (0.02) 4.24 $ $ $ $ $ 887.7 692.3 195.4 86.5 6.5 — — 1.0 101.4 11.7 (0.2) 89.9 29.4 60.5 (9.4) 51.1 3.58 (0.56) 3.02 3.53 (0.55) 2.98 Net income $ 80.3 $ Earnings (Loss) Per Common Share Basic Continuing operations Discontinued operations Diluted Continuing operations Discontinued operations $ $ $ $ 4.74 — 4.74 4.68 — 4.68 $ $ $ $ Weighted Average Common Shares Outstanding (in thousands) Basic Diluted 16,805 17,052 16,773 17,087 16,754 17,012 See Notes to Consolidated Financial Statements F-4 NEENAH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Net income Reclassification of amounts recognized in the consolidated statement of operations: Amortization of adjustments to pension and other postretirement benefit liabilities Pension plan settlement/curtailment charge (2015 amount in discontinued operations) Amounts recognized in the consolidated statement of operations Unrealized foreign currency translation gain (loss) Net loss from pension and other postretirement benefit plans Deferred loss on "available-for-sale" securities Income (loss) from other comprehensive income items before income taxes (Benefit) provision for income taxes Other comprehensive income (loss) Comprehensive income See Notes to Consolidated Financial Statements Year Ended December 31, 2017 2016 2015 $ 80.3 $ 73.0 $ 51.1 5.9 0.6 6.5 20.0 (20.3) (0.4) 5.8 (3.0) 8.8 $ 89.1 $ 7.2 0.8 8.0 (7.1) (18.0) — (17.1) (3.4) (13.7) 59.3 $ 7.1 5.5 12.6 (15.0) (6.3) — (8.7) 1.2 (9.9) 41.2 F o r m 1 0 - K F-5 NEENAH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except share data) ASSETS Current Assets Cash and cash equivalents Accounts receivable, net Inventories Prepaid and other current assets Total Current Assets Property, Plant and Equipment — net Deferred Income Taxes Goodwill (Note 5) Intangible Assets — net (Note 5) Other Assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Debt payable within one year Accounts payable Accrued expenses Total Current Liabilities Long-Term Debt Deferred Income Taxes Noncurrent Employee Benefits Other Noncurrent Obligations TOTAL LIABILITIES Commitments and Contingencies (Notes 11 and 12) Stockholders' Equity Common stock, par value $0.01 — authorized: 100,000,000 shares; issued and outstanding: 16,870,000 shares and 16,771,000 shares Treasury stock, at cost: 1,588,000 shares and 1,475,000 shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Stockholders' Equity December 31, 2017 2016 $ 4.5 $ 115.7 143.5 21.5 285.2 425.2 10.1 85.3 78.7 19.9 3.1 96.5 116.3 20.4 236.3 364.6 6.1 70.4 74.0 14.2 $ 904.4 $ 765.6 $ 1.4 $ 65.7 57.5 124.6 254.1 15.0 100.3 10.5 504.5 0.2 (65.8) 323.9 235.7 (94.1) 399.9 1.2 55.6 51.2 108.0 219.7 10.1 86.7 2.8 427.3 0.2 (56.5) 317.0 169.6 (92.0) 338.3 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 904.4 $ 765.6 See Notes to Consolidated Financial Statements F-6 NEENAH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In millions, shares in thousands) Common Stock Shares Amount Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Balance, December 31, 2014 17,849 $ Net income Other comprehensive loss, after income taxes Dividends declared Excess tax benefits from stock-based compensation Shares purchased (Note 10) Stock options exercised Restricted stock vesting (Note 10) Stock-based compensation Other/Currency — — — — — 108 106 — — Balance, December 31, 2015 18,063 Net income Other comprehensive loss, net of income tax benefit Dividends declared Excess tax benefits from stock-based compensation Shares purchased (Note 10) Stock options exercised Restricted stock vesting (Note 10) Balance, December 31, 2016 Net income Other comprehensive income, after income tax benefit Reclassification of the stranded tax effects related to the Tax Act (Note 10) Dividends declared Shares purchased (Note 10) Stock options exercised Restricted stock vesting (Note 10) Stock-based compensation Other/Currency — — — — 71 111 — 18,245 — — — — — 140 73 — — 0.2 — $ (31.7) $ — — — — — — — — — 0.2 — — — — — — — 0.2 — — — — — — — — — — — — (5.9) — (2.5) — — (40.1) — — — (12.6) — (3.8) — (56.5) — — — — (6.8) — (2.5) — — $ (65.8) $ F o r m 1 0 - K 300.4 $ — — — 2.6 — 1.2 — 6.5 0.1 310.8 — — — — 0.4 — 5.8 317.0 — — — — — 0.4 — 6.4 0.1 $ 88.2 51.1 — (20.3) — — — — — — 119.0 73.0 — (22.4) — — — — 169.6 80.3 — 10.9 (25.1) — — — — — 323.9 $ 235.7 $ (68.4) — (9.9) — — — — — — — (78.3) — (13.7) — — — — — (92.0) — 8.8 (10.9) — — — — — — (94.1) Balance, December 31, 2017 18,458 $ 0.2 See Notes to Consolidated Financial Statements F-7 NEENAH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Stock-based compensation Excess tax benefit from stock-based compensation (Note 9) Deferred income tax provision Non-cash effects of changes in liabilities for uncertain income tax positions Pension settlement charge, net of plan payments Non-cash loss on discontinued operations Loss (gain) on asset dispositions Net cash (used in) provided by changes in operating working capital, net of effect of acquisitions (Note 15) Pension and other post-employment benefits Other NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES Capital expenditures Purchases of marketable securities Asset acquisition Net proceeds from sale of discontinued operations Proceeds from sale of property, plant and equipment Acquisitions (Note 4) Other NET CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES Proceeds from issuance of long-term debt (Note 7) Debt issuance costs Repayments of long-term debt (Note 7) Proceeds from exercise of stock options Excess tax benefit from stock-based compensation (Note 9) Cash dividends paid Shares purchased (Note 10) Other NET CASH USED IN FINANCING ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR Year Ended December 31, 2017 2016 2015 $ 80.3 $ 73.0 $ 51.1 33.3 6.4 — (0.2) (0.1) 0.6 — 0.2 (11.8) (8.0) (0.7) 100.0 (42.7) (0.6) (8.0) — — (43.1) (0.6) (95.0) 323.7 (0.3) (293.3) 0.4 — (25.1) (9.3) 0.1 (3.8) 32.0 5.8 — 16.9 (1.5) 0.8 — 0.1 (1.2) (10.9) 0.8 115.8 (68.5) (0.1) — — 0.1 — 0.3 (68.2) 243.0 (0.1) (252.9) 0.4 — (22.4) (16.4) — (48.4) 0.2 1.4 3.1 4.5 $ (0.3) (1.1) 4.2 3.1 $ $ 31.5 6.5 (2.6) 8.3 (0.1) — 12.0 (0.1) 1.8 2.9 (0.1) 111.2 (48.1) (0.2) — 5.4 0.5 (118.2) 0.5 (160.1) 151.6 — (145.6) 1.2 2.6 (20.3) (8.4) 0.1 (18.8) (0.7) (68.4) 72.6 4.2 See Notes to Consolidated Financial Statements F-8 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in millions, except as noted) Note 1. Background and Basis of Presentation Background Neenah, Inc. ("Neenah" or the "Company"), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. The technical products business is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, digital image transfer, durable label, and other specialty substrate products. The fine paper and packaging business is a supplier of branded premium printing, packaging and other high end specialty papers primarily in North America. The Company's premium writing, text and cover papers, and specialty papers are used in commercial printing and imaging applications for corporate identity packages, invitations, personal stationery and high-end advertising, as well as premium labels and luxury packaging. Basis of Presentation The consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known. Significant management judgment is required in determining the accounting for, among other things, pension and postretirement benefits, retained insurable risks, reserves for sales discounts and allowances, purchase price allocations, useful lives for depreciation and amortization, asset retirement obligations ("AROs"), future cash flows associated with impairment testing for tangible and intangible long-lived assets, goodwill, income taxes, contingencies, inventory obsolescence and market reserves and the valuation of stock-based compensation. F o r m 1 0 - K Revenue Recognition The Company recognizes sales revenue when all of the following have occurred: (1) delivery has occurred, (2) persuasive evidence of an agreement exists, (3) pricing is fixed or determinable, and (4) collection is reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Sales are reported net of allowable discounts and estimated returns. Reserves for cash discounts, trade allowances and sales returns are estimated using historical experience. The Company has completed its assessment of the ASU 2014-09, Revenue from Contracts with Customers, and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. See "Recently Adopted Accounting Standards" later in this Note for further discussion. F-9 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less. The Company places its temporary cash investments with high credit quality financial institutions. As of December 31, 2017 and 2016, $0.1 million and $0.3 million, respectively, of the Company's cash and cash equivalents is restricted to the payment of postretirement benefits for certain former Fox River executives. Inventories U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (LIFO) method for financial reporting purposes, or market. European inventories are valued at the lower of cost, using a weighted-average cost method, or market. Cost includes labor, materials and production overhead. Foreign Currency Balance sheet accounts of the Company's operations in Germany and the Netherlands, the United Kingdom (the "U.K."), and Canada are translated from Euros, British Pounds, and Canadian dollars, respectively, into U.S. dollars at period-end exchange rates, and income and expense accounts are translated at average exchange rates during the period. Translation gains or losses related to net assets located in Germany, the Netherlands, the U.K., and Canada are recorded as unrealized foreign currency translation adjustments within Accumulated other comprehensive loss in stockholders' equity. Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity's functional currency) are included in Other expense — net in the consolidated statements of operations. Property and Depreciation Property, plant and equipment are stated at cost, less accumulated depreciation. Certain costs of software developed or obtained for internal use are capitalized. When property, plant and equipment is sold or retired, the costs and the related accumulated depreciation are removed from the accounts, and the gains or losses are recorded in Other (income) expense — net. For financial reporting purposes, depreciation is principally computed on the straight-line method over estimated useful asset lives. The weighted average remaining useful lives for buildings, land improvements and machinery and equipment are approximately 20 years, 12 years and 9.5 years, respectively. The units-of-production method of depreciation is used for the U.S. transportation filtration production assets with a gross book value of $66.6 million, which reflects the nature of the assets' utilization. For income tax purposes, accelerated methods of depreciation are used. The costs of major rebuilds and replacements of plant and equipment are capitalized, and the cost of maintenance performed on manufacturing facilities, composed of labor, materials and other incremental costs, is expensed as incurred. Start-up costs for new or expanded facilities, including costs related to trial production, are expensed as incurred. The Company accounts for AROs in accordance with ASC Topic 410, Asset Retirements and Environmental Obligations, which requires companies to make estimates regarding future events in order to record a liability for AROs in the period in which a legal obligation is created. Such liabilities are recorded at fair value, with an offsetting increase to the carrying value of the related long-lived asset. As of December 31, 2017, the Company is unable to estimate its AROs for environmental liabilities at its manufacturing facilities. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the fair value recognition provisions of ASC Topic 718, Compensation — Stock Compensation ("ASC Topic 718"). The amount of stock-based compensation cost F-10 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) recognized is based on the fair value of grants that are ultimately expected to vest and is recognized pro-rata over the requisite service period for the entire award. Research and Development Expense Research and development costs are charged to expense as incurred and are recorded in "Selling, general and administrative expenses" on the consolidated statement of operations. See Note 15, "Supplemental Data — Supplemental Statement of Operations Data." Fair Value Measurements The Company measures the fair value of pension plan assets in accordance with ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820") which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Fair Value of Financial Instruments The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities. The following table presents the carrying value and the fair value of the Company's debt. F o r m 1 0 - K 2021 Senior Notes (5.25% fixed rate) Global Revolving Credit Facilities (variable rates) Second German Loan Agreement (2.5% fixed rate) Total debt _______________________ December 31, 2017 December 31, 2016 Carrying Value Fair Value (a) Carrying Value Fair Value (a) $ 175.0 $ 170.2 $ 175.0 $ 169.5 76.9 6.4 76.9 6.4 42.9 6.8 42.9 6.8 $ 258.3 $ 253.5 $ 224.7 $ 219.2 (a) Fair value for all debt instruments was estimated from Level 2 measurements. The Company's investments in marketable securities are accounted for as "available-for-sale securities" in accordance with ASC Topic 320, Investments — Debt and Equity Securities ("ASC Topic 320"). Pursuant to ASC Topic 320, marketable securities are reported at fair value on the consolidated balance sheet and unrealized holding gains and losses are reported in other comprehensive income until realized upon sale. At December 31, 2017, the Company had $3.6 million in marketable securities classified as Other assets on the consolidated balance sheet. The cost of such marketable securities was $4.1 million. Fair value for the Company's marketable securities was estimated from Level 1 inputs. The Company's marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (the "SERP"). F-11 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Fair Value of Pension Plan Assets With the exception of cash and cash equivalents which are considered Level 1, and the annuity contracts which are considered Level 3, pension plan assets are measured at Net Asset Value ("NAV") (or its equivalent) as an alternative to fair market value due to the absence of readily available market prices, and as such are not subject to the fair value hierarchy. Following is the fair value of each investment category: • Cash and cash equivalents ($1.6 million and $1.5 million at December 31, 2017 and 2016, respectively). • U.S and non-U.S. Equities ($123.2 million and $112.2 million at December 31, 2017 and 2016, respectively) — These proprietary collective funds have observable NAVs (based on the fair value of the underlying investments of the funds) that are provided to investors and provide for liquidity either immediately of within a few days. • U.S and non-U.S. Fixed Income Securities ($199.0 million and $181.1 million at December 31, 2017 and 2016, respectively) — These proprietary collective funds have observable NAVs (based on the fair value of the underlying investments of the funds) that are provided to investors and provide for liquidity either immediately of within a few days. • Hedge Fund ($28.2 million and $23.3 million at December 31, 2017 and 2016, respectively) — This fund is valued using NAVs calculated by the underlying investment managers and allow for quarterly or more frequent redemptions. In conjunction with the Coldenhove Acquisition, there were transfers in of $46.8 million into Level 3 plan assets, as the defined benefit plan for Coldenhove is administered through an insurance contract. The following table summarizes the changes in Level 3 defined benefit pension plan assets measured at fair value on a recurring basis for the year ended December 31, 2017: Return on plan assets Fair Value at January 1 Attributable to Assets Held at December 31 Attributable to Assets Sold Net Purchases/ (Settlements) Transfers into/ (out of) Level 3 Foreign currency effects Fair Value at December 31 Insurance contract $ — $ 0.2 $ — $ 0.1 $ 46.8 $ 1.3 $ 48.4 Recently Adopted Accounting Standards In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendments in this ASU provide guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for the Company as of January 1, 2018, on a prospective basis. The Company early adopted ASU 2017-01 in the third quarter of 2017. There was no material impact on the consolidated financial statements as a result of the adoption. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income (Topic 740), to address issues related to the application of ASC 740 to certain provisions of the Tax Cuts and Jobs Act (the "Tax Act"). This ASU provides an option for entities to make a one-time reclassification from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings for stranded tax effects resulting from the newly enacted tax rates for deferred tax liabilities and assets related to items within AOCI. The Company early adopted ASU 2018-02 in the fourth quarter of 2017 and accordingly reclassified $10.9 million related to stranded tax effects resulting from the Tax Act from AOCI to retained earnings. See Note 10, "Stockholders' Equity." F-12 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Accounting Standards Changes In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The Company has completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. The new standards also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. ASU 2016-09 is effective for fiscal years beginning after December 15, 2018, although early adoption is permitted. The Company is currently assessing the impact of the adoption of ASU 2016-09 on its consolidated financial statements. As of December 31, 2017, no other amendments to the ASC had been issued and not adopted by the Company that will have or are reasonably likely to have a material effect on the its financial position, results of operations or cash flows. F o r m 1 0 - K Note 3. Earnings per Share ("EPS") The Company's restricted stock units ("RSUs") are paid non-forfeitable common stock dividends and thus meet the criteria of participating securities. Accordingly, basic EPS has been calculated using the two-class method, under which earnings are allocated to both common stock and participating securities. Basic EPS has been computed by dividing net income allocated to common stock by the weighted average common shares outstanding. For the computation of basic EPS, weighted average RSUs outstanding are excluded from the calculation of weighted average shares outstanding. Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC Topic 260") requires companies with participating securities to calculate diluted earnings per share using the "two class" method. The "two class" method requires first calculating diluted earnings per share using a denominator that includes the weighted average share equivalents from the assumed conversion of dilutive securities. Diluted earnings per share is then calculated using net income reduced by the amount of distributed and undistributed earnings allocated to participating securities calculated using the "Treasury Stock" method and a denominator that includes the weighted average share equivalents from the assumed conversion of dilutive securities excluding participating securities. Companies are required to report the lower of the diluted earnings per share amounts under the two calculations subject to the anti-dilution provisions of ASC Topic 260. Diluted EPS has been computed by dividing net income allocated to common stock by the weighted average number of common shares used in computing basic EPS, further adjusted to include the dilutive impact of the exercise or conversion of common stock equivalents, such as stock options, stock appreciation rights ("SARs") and target awards of RSUs with performance conditions ("Performance Share Units" or "PSUs"), into shares of common stock as if those securities were exercised or converted. For the years ended December 31, 2017, 2016 and 2015, approximately 72,000, 35,000 and 45,000 potentially dilutive options, respectively, were excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company's common stock for the respective 12- month periods during which the options were outstanding. F-13 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following table presents the computation of basic and diluted shares of common stock used in the calculation of EPS (amounts in millions, except share and per share amounts): Earnings per basic common share Income from continuing operations Amounts attributable to participating securities Income from continuing operations available to common stockholders Income (loss) from discontinued operations, net of income taxes Amounts attributable to participating securities Net income available to common stockholders Weighted-average basic shares outstanding Basic earnings (loss) per share Continuing operations Discontinued operations Earnings per diluted common share Income from continuing operations Amounts attributable to participating securities Income from continuing operations available to common stockholders Income (loss) from discontinued operations, net of income taxes Amounts attributable to participating securities Net income available to common stockholders Weighted-average basic shares outstanding Add: Assumed incremental shares under stock-based compensation plans Weighted average diluted shares Diluted earnings (loss) per share Continuing operations Discontinued operations Note 4. Acquisitions Acquisition of Coldenhove $ $ $ $ $ Year Ended December 31, 2017 2016 2015 $ 80.3 (0.6) 79.7 — — $ 73.4 (0.7) 72.7 (0.4) — 79.7 $ 72.3 $ 60.5 (0.6) 59.9 (9.4) 0.1 50.6 16,805 16,773 16,754 4.74 — 4.74 $ $ 4.33 (0.02) 4.31 $ $ 3.58 (0.56) 3.02 Year Ended December 31, 2017 2016 2015 $ 80.3 (0.5) 79.8 — — $ 73.4 (0.6) 72.8 (0.4) — $ 79.8 $ 72.4 $ 16,805 247 17,052 16,773 314 17,087 60.5 (0.5) 60.0 (9.4) 0.1 50.7 16,754 258 17,012 $ $ 4.68 — 4.68 $ $ 4.26 (0.02) 4.24 $ $ 3.53 (0.55) 2.98 On November 1, 2017, the Company purchased all of the outstanding equity of Coldenhove for approximately $45 million. The Company also paid approximately $3 million to extinguish Coldenhove's existing debt and certain other liabilities. The payment was funded with $17 million of cash on hand and borrowings of $31 million from the Global Revolving Credit F-14 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Facilities. Coldenhove is a specialty materials manufacturer based in the Netherlands, with a leading position in digital transfer media and other technical products. The Company accounted for the transaction using the acquisition method in accordance with ASC Topic 805, Business Combinations ("ASC Topic 805"). The preliminary allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of November 1, 2017, and certain tax balances are subject to adjustment as additional information is obtained. The Company has up to 12 months from the closing of the acquisition to finalize its valuations. Changes to the valuation of tax assets and liabilities acquired may result in adjustments to the carrying value of tax assets and liabilities acquired or goodwill. Prior to the end of the one-year purchase price allocation period, if information becomes available which would indicate it is probable that such events attributable to these items had occurred as of the acquisition date and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may result in an adjustment to the carrying value of tax assets and liabilities acquired or goodwill. The following table summarizes the allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed as of December 31, 2017. Assets Acquired Cash and cash equivalents Accounts receivable Inventories Deferred income taxes Prepaid and other current assets Property, plant and equipment Non-amortizable intangible assets Amortizable intangible assets Acquired goodwill Other assets Total assets acquired Liabilities Assumed Accounts payable Accrued expenses Contingent liability (1) Deferred income taxes Noncurrent employee benefits Long-term debt Other noncurrent obligations Total liabilities assumed Net assets acquired F o r m 1 0 - K December 31, 2017 $ $ 4.9 4.7 12.7 0.4 0.2 31.2 1.2 4.7 10.0 0.1 70.1 4.1 5.4 2.3 3.5 4.9 1.8 0.1 22.1 48.0 (1) In conjunction with the acquisition, the Company assumed a contingent liability of $2.3 million related to the acquisition of direct customer relationships by Coldenhove, which amount is contingent on the growth of sales from these customer relationships. As of December 31, 2017, the liability amount is unchanged. The Company estimated the fair value of the assets and liabilities acquired in accordance with ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"). The fair value of amortizable and non-amortizable intangible assets F-15 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) was estimated by applying a royalty rate to projected revenue, net of tax impacts and adjusted for present value considerations. The Company estimated the fair value of acquired property, plant and equipment using a combination of cost and market approaches. In general, the fair value of other acquired assets and liabilities was estimated using the cost basis of Coldenhove. The excess of the purchase price over the estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as acquired goodwill. The factors contributing to the amount of goodwill recognized are based on several strategic and synergistic benefits that are expected to be realized from the acquisition of Coldenhove. These benefits include entry into profitable new markets for performance materials and specialty papers with new capabilities and recognized brands and synergies from combining the business with Neenah's existing infrastructure. None of the goodwill recognized as part of the Coldenhove acquisition will be deductible for income tax purposes. All of the acquired goodwill was allocated to the Technical Products segment. For the year ended December 31, 2017, the Company incurred $1.3 million of acquisition and restructuring costs. For the year ended December 31, 2017, the Company recorded net sales of $7.5 million and insignificant loss from operations before income taxes (excluding the acquisition related costs described above) for the acquired business. The following selected unaudited pro forma consolidated statements of operations data for the year ended December 31, 2017 and 2016 was prepared as though the Coldenhove acquisition had occurred on January 1, 2016. The information does not reflect future events that may occur after December 31, 2017 or any operating efficiencies or inefficiencies that may result from the Coldenhove acquisition. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that the Company will experience going forward. Net sales Operating income Income from continuing operations Income (loss) from discontinued operations Net income Earnings (Loss) Per Common Share Basic Continuing operations Discontinued Operations Diluted Continuing operations Discontinued Operations Acquisition of FiberMark Year Ended December 31, 2017 2016 $ 1,019.8 $ 108.9 83.0 — 83.0 $ $ $ $ $ $ 4.90 — 4.90 $ 4.84 — 4.84 $ 986.9 116.7 74.8 (0.4) 74.4 4.42 (0.02) 4.40 4.34 (0.02) 4.32 On August 1, 2015, the Company purchased all of the outstanding equity of FiberMark from American Securities for approximately $118 million. FiberMark is a specialty coatings and finishing company with a strong presence in luxury packaging and technical products. F-16 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The Company accounted for the transaction using the acquisition method in accordance with ASC Topic 805, Business Combinations ("ASC Topic 805"). The allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of August 1, 2015. The excess of the purchase price over the estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as acquired goodwill. The factors contributing to the amount of goodwill recognized are based on several strategic and synergistic benefits that are expected to be realized from the acquisition of FiberMark. These benefits include entry into profitable new markets for premium packaging, performance materials and specialty papers with new capabilities and recognized brands, synergies from combining the business with Neenah's existing infrastructure, and the opportunity to accelerate sales growth in areas like premium packaging. None of the goodwill recognized as part of the FiberMark acquisition will be deductible for income tax purposes. However, the Company did acquire all of the tax attributes associated with the FiberMark assets and liabilities, including an insignificant amount of tax deductible goodwill. Approximately $18.9 million, $6.2 million and $0.4 million of the goodwill acquired in the FiberMark acquisition was allocated to the Technical Products, Fine Paper and Packaging and Other segments, respectively. For the year ended December 31, 2016, the Company incurred $4.3 million of integration and restructuring costs. For the year ended December 31, 2015, the Company incurred $5.3 million of acquisition and integration costs. For the year ended December 31, 2015, net sales and income from operations before income taxes for the acquired businesses were $58.1 million and $1.5 million (excluding the acquisition related costs described above), respectively. In conjunction with the FiberMark acquisition, the Company identified various uncertain tax positions totaling $4.7 million. Such amount was reflected in the purchase price allocation as $3.7 million of goodwill and $1.0 million of other current assets. The following selected unaudited pro forma consolidated statements of operations data for the year ended December 31, 2016 and 2015 was prepared as though the FiberMark acquisition had occurred on January 1, 2015. The information does not reflect future events that may occur after December 31, 2016 or any operating efficiencies or inefficiencies that may result from the FiberMark acquisition. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that the Company will experience going forward. F o r m 1 0 - K Net sales Operating income Income from continuing operations Income (loss) from discontinued operations Net income Earnings (Loss) Per Common Share Basic Continuing operations Discontinued Operations Diluted Continuing operations Discontinued Operations F-17 Year Ended December 31, 2015 984.0 103.7 61.7 (9.4) 52.3 3.65 (0.56) 3.09 3.60 (0.55) 3.05 $ $ $ $ $ NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Note 5. Goodwill and Other Intangible Assets The Company follows the guidance of ASC Topic 805, Business Combinations ("ASC Topic 805"), in recording goodwill arising from a business combination as the excess of purchase price over the fair value of identifiable assets acquired and liabilities assumed. The Company tests goodwill for impairment at least annually on November 30 in conjunction with preparation of its annual business plan, or more frequently if events or circumstances indicate it might be impaired. The Company tested goodwill for impairment as of November 30, 2017. The Company elected the option under ASC Topic 350, Intangibles — Goodwill and Other, to perform a qualitative assessment of the Company's reporting units to determine whether further impairment testing is necessary. In this qualitative assessment, the Company considered the following items for each of the reporting units: macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In addition, for each of these reporting units, the most recent fair value determination results in an amount that exceeds the carrying amount of the reporting units. Based on these assessments, the Company determined that the likelihood that a current fair value determination would be less than the current carrying amount of the reporting unit is not more likely than not. There was no impairment in the carrying value of goodwill for the years ended December 31, 2017, 2016 and 2015 . Intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment. Intangible assets consist primarily of customer relationships, trade names and acquired intellectual property. Such intangible assets are amortized using the straight-line method over estimated useful lives of between 10 and 15 years. Certain trade names are estimated to have indefinite useful lives and as such are not amortized. Intangible assets with indefinite lives are reviewed for impairment at least annually. The following table presents the carrying value of goodwill by business segment and changes in the carrying value of goodwill. Technical Products Gross Amount Accumulated Impairment Losses Fine Paper and Packaging Net Gross Amount Other Gross Amount Net Balance at December 31, 2015 $ 110.7 $ (45.1) $ 65.6 $ 6.2 $ 0.4 $ 72.2 Adjustment of goodwill acquired in the Fibermark Acquisition (1) Foreign currency translation Balance at December 31, 2016 Goodwill acquired in the Coldenhove Acquisition Foreign currency translation (0.4) (2.9) 107.4 10.0 10.9 Balance at December 31, 2017 $ 128.3 $ ___________________________ — 1.5 (43.6) — (6.0) (49.6) $ (0.4) (1.4) 63.8 10.0 4.9 — — 6.2 — — — — 0.4 — — (0.4) (1.4) 70.4 10.0 4.9 78.7 $ 6.2 $ 0.4 $ 85.3 (1) As a result of finalizing the acquisition accounting for Fibermark in the first quarter of 2016, an adjustment of $0.4 million was recorded as a reduction to the net deferred tax liability and to goodwill. Other Intangible Assets As of December 31, 2017, the Company had net identifiable intangible assets of $78.7 million. All such intangible assets were acquired in the acquisitions of Neenah Germany, Fox River, FiberMark, Coldenhove and the Crane technical F-18 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) materials business, and the acquisition of the Wausau and Southworth brands. The following table details amounts related to those assets. materials business, and the acquisition of the Wausau and Southworth brands. The following table details amounts related to those assets. Amortizable intangible assets Amortizable intangible assets Customer based intangibles Customer based intangibles Trade names and trademarks Trade names and trademarks Acquired technology Acquired technology Total amortizable intangible assets Total amortizable intangible assets Trade names Trade names Total Total December 31, 2017 December 31, 2017 December 31, 2016 December 31, 2016 Gross Amount Gross Amount Accumulated Amortization Accumulated Amortization Gross Amount Gross Amount Accumulated Amortization Accumulated Amortization $ $ 39.2 39.2 $ $ 5.2 5.2 17.2 17.2 61.6 61.6 38.0 38.0 $ $ 99.6 99.6 $ $ (14.7) $ (14.7) $ (2.3) (2.3) (3.9) (3.9) (20.9) (20.9) — — (20.9) $ (20.9) $ 34.4 34.4 $ $ 6.8 6.8 14.6 14.6 55.8 55.8 36.2 36.2 92.0 92.0 $ $ (11.1) (11.1) (4.2) (4.2) (2.7) (2.7) (18.0) (18.0) — — (18.0) (18.0) The following table presents intangible assets acquired in conjunction with the Coldenhove acquisition: The following table presents intangible assets acquired in conjunction with the Coldenhove acquisition: Intangible assets — definite lived Intangible assets — definite lived Trade names and trademarks Trade names and trademarks Customer based intangibles Customer based intangibles Acquired technology Acquired technology Total Total Non-amortizable trade names Non-amortizable trade names Total intangible assets Total intangible assets Intangibles Intangibles Estimated Useful Lives (Years) Estimated Useful Lives (Years) 10 10 15 15 4 4 F o r m 1 0 - K $ $ $ $ 0.5 0.5 2.9 2.9 1.3 1.3 4.7 4.7 1.2 1.2 5.9 5.9 As of December 31, 2017, all of such intangible assets are reported within the Technical Products segment. See Note 14, As of December 31, 2017, all of such intangible assets are reported within the Technical Products segment. See Note 14, "Business Segment and Geographic Information." Aggregate amortization expense of acquired intangible assets for the "Business Segment and Geographic Information." Aggregate amortization expense of acquired intangible assets for the years ended December 31, 2017, 2016 and 2015 was $3.7 million, $3.9 million and $2.9 million, respectively and was years ended December 31, 2017, 2016 and 2015 was $3.7 million, $3.9 million and $2.9 million, respectively and was reported in Cost of products sold on the Consolidated Statement of Operations. Estimated amortization expense for the reported in Cost of products sold on the Consolidated Statement of Operations. Estimated amortization expense for the years ended December 31, 2018, 2019, 2020, 2021 and 2022 is $3.9 million, $3.9 million, $3.9 million, $3.7 million and years ended December 31, 2018, 2019, 2020, 2021 and 2022 is $3.9 million, $3.9 million, $3.9 million, $3.7 million and $3.0 million, respectively. $3.0 million, respectively. Note 6. Income Taxes Note 6. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Income tax expense represented 12.4 percent, 28.7 percent and 32.7 percent of income from continuing operations before income taxes for the years ended December 31, 2017, 2016 and 2015, respectively. The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Income tax expense represented 12.4 percent, 28.7 percent and 32.7 percent of income from continuing operations before income taxes for the years ended December 31, 2017, 2016 and 2015, respectively. On December 22, 2017, the U.S. government enacted comprehensive tax legislation, commonly referred to as the "Tax On December 22, 2017, the U.S. government enacted comprehensive tax legislation, commonly referred to as the "Tax Act". The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory Act". The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes and changing how foreign earnings are subject to U.S. tax. earnings of foreign subsidiaries, introducing new tax regimes and changing how foreign earnings are subject to U.S. tax. The Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified The Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified F-19 F-19 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) property. The Company has not completed our determination of the accounting implications of the Tax Act on its tax accruals. However, the Company reasonably estimated the effects of the Tax Act and recorded provisional amounts in the financial statements as of December 31, 2017. Consistent with guidance issued by the Securities Exchange Commission ("SEC"), which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Act, the Company provisionally recorded an income tax benefit of $6.5 million related to the Tax Act. This amount is comprised of a $10.3 million tax benefit from the remeasurement of federal net deferred tax liabilities resulting from the reduction in the U.S. statutory corporate tax rate to 21% from 35%, less $3.8 million of tax expense from the mandatory one-time tax on the accumulated earnings of its foreign subsidiaries. As the Company completes its analysis of the Tax Act, collects and prepares necessary data and interprets any additional guidance issued by the U.S. Treasury Department, the IRS and other standard-setting bodies, adjustments to the provisional amounts may be required. In addition, adjustments to the provisional amounts may be needed to reflect legislative actions by the various U.S. states related to application of the Tax Act provisions on 2017 state tax returns. These adjustments could significantly impact the Company’s provision for income taxes in the period in which the adjustments are made. In conjunction with the Tax Act, The Company early adopted ASU 2018-02 in the fourth quarter of 2017 and accordingly reclassified $10.9 million related to stranded tax effects resulting from the Tax Act from AOCI to retained earnings. See Note 10, "Stockholders' Equity." For the Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them. As a result, the Company did not provide deferred income taxes on the 2017 unremitted earnings of our German operations. In addition, in the second quarter of 2017, the deferred tax liability of $4.1 million which was recorded in 2016 on unremitted German earnings was eliminated with a reduction to income tax expense. As noted above, the Tax Act includes a mandatory one-time tax on unremitted accumulated earnings of all foreign subsidiaries, and as a result, all previously unremitted earnings are now subject to U.S. tax and a liability of $3.8 million was recorded thereon as of December 31, 2017. Beginning in 2018, the Tax Act will generally provide a 100% deduction for U.S. federal tax purposes of dividends received by the Company from its foreign subsidiaries. The Company is currently evaluating the potential U.S. federal and state and foreign tax liabilities that would result from future repatriations, if any, and how the Tax Act will affect the Company's existing accounting assertion with regard to the indefinite reinvestment of undistributed foreign earnings. The Company will complete this evaluation and determine the impacts, if any, of U.S. federal and state and foreign legislation on its indefinite reinvestment assertion within the one-year measurement period. F-20 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following table presents the principal reasons for the difference between the Company's effective income tax rate and the U.S. federal statutory income tax rate: U.S. federal statutory income tax rate U.S. state income taxes, net of federal income tax benefit Tax on foreign dividends (a) Foreign tax rate differences (b) Foreign financing structure (c) Excess tax benefits from stock compensation Research and development and other tax credits (d) Domestic production activities deduction Uncertain income tax positions Change in statutory tax rates (e) Other differences — net Effective income tax rate _______________________ Year Ended December 31, 2017 2017 2016 2016 2015 2015 35.0 % $ 32.1 35.0 % $ 36.1 35.0 % $ 31.5 1.9 % (0.3)% (3.4)% (2.2)% (4.9)% (3.3)% (0.6)% 0.8 % (10.6)% — % 1.7 (0.3) (3.1) (2.0) (4.5) (3.0) (0.5) 0.7 (9.7) — 12.4 % $ 11.4 1.9 % 2.0 4.5 % (1.6)% (2.8)% (3.0)% (2.7)% 4.6 (2.8) (1.7) (3.1) (2.9) (1.5) (0.4) — (0.7) 28.7 % $ 29.6 (0.4)% (0.7)% (1.5)% — % 2.1 % 3.6 % (2.2)% (1.3)% — (3.9)% (2.2)% 1.3 % — % 0.3 % 1.9 3.2 (2.0) (1.2) — (3.5) (2.0) 1.2 — 0.3 32.7 % $ 29.4 (a) For 2017, the amount reflects the net benefit of the indefinite reinvestment assertion of $4.1 million, less the $3.8 mandatory one-time tax on the accumulated earnings of foreign subsidiaries from the Tax Act. (b) Represents the impact on the Company's effective tax rate due to changes in the mix of earnings among taxing jurisdictions with differing statutory rates. (c) Represents the impact on the Company's effective tax rate of the Company's financing strategies. (d) For 2015, the Company recognized a $1.4 million benefit related to research and development ("R&D") tax credits of FiberMark for the period 2012 through July 2015. (e) Represents the net benefit from remeasurement of the net deferred tax liabilities, including a tax benefit of $10.3 million from the Tax Act, less $0.6 million of tax expense from a state tax rate change in Germany. F o r m 1 0 - K The Company's effective income tax rate can be affected by many factors, including but not limited to, changes in the mix of earnings in taxing jurisdictions with differing statutory rates, the availability of R&D and other tax credits, changes in corporate structure as a result of business acquisitions and dispositions, changes in the valuation of deferred tax assets and liabilities, the results of audit examinations of previously filed tax returns and changes in tax laws. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. The Company is no longer subject to U.S. federal examination for years before 2014, to state and local examinations for years before 2013 and to non-U.S. income tax examinations for years before 2012. F-21 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following table presents the U.S. and foreign components of income from continuing operations before income taxes: Income from continuing operations before income taxes: U.S. Foreign Total The following table presents the components of the provision (benefit) for income taxes: Provision (benefit) for income taxes: Current: Federal State Foreign Total current tax provision Deferred: Federal State Foreign Total deferred tax provision Total provision for income taxes Year Ended December 31, 2017 2016 2015 $ $ 53.6 38.1 91.7 $ 68.3 34.7 $ 103.0 $ $ 62.2 27.7 89.9 Year Ended December 31, 2017 2016 2015 $ $ 4.7 0.5 6.4 11.6 (1.8) (0.1) 1.7 (0.2) 11.4 $ $ 7.1 (0.5) 5.9 12.5 14.8 1.8 0.5 17.1 29.6 $ 12.7 1.3 5.1 19.1 7.7 2.3 0.3 10.3 29.4 $ The federal deferred tax provision was reduced by a net $8.1 million as a result of the Tax Act and the German tax rate increase. This amount includes $10.3 million of tax rate reduction from the Tax Act, less $0.6 million from the German tax rate increase, less $1.6 million of impact of the mandatory one-time tax on the accumulated earnings of foreign subsidiaries from the Tax Act. The remaining $2.2 million of impact of the mandatory one-time tax on foreign earnings increased the federal current tax provision. The Company has elected to treat its Canadian operations as a branch for U.S. income tax purposes. Therefore, the amount of income (loss) before income taxes from Canadian operations are included in the Company's consolidated U.S. income tax returns and such amounts are subject to U.S. income taxes. F-22 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The components of deferred tax assets and liabilities, net of reserves for uncertain tax positions and valuation allowances, are as follows: Deferred income tax assets (liabilities) Research and development tax credits Net operating losses and credits Employee benefits Inventories Accrued liabilities Intangibles Accelerated depreciation Undistributed foreign earnings Other Net deferred income tax assets Deferred income tax assets (liabilities) Accelerated depreciation Intangibles Interest limitation Other Inventories Accrued liabilities Net operating losses Research and development tax credits Employee benefits Net deferred income tax liabilities December 31, 2017 2016 $ $ 6.6 4.2 1.1 0.2 0.1 (0.5) (1.6) — — 15.0 10.5 26.0 (0.5) 3.2 (10.8) (34.0) (4.4) 1.1 $ 10.1 $ 6.1 $ (45.1) $ (11.4) — 1.3 1.8 1.9 5.0 8.6 (12.3) (2.8) (0.3) — 0.3 — — — 22.9 (15.0) $ 5.0 (10.1) $ F o r m 1 0 - K As of December 31, 2017, the net deferred tax assets relate to the state of Wisconsin and the net deferred tax liabilities relate to U.S. federal and all other U.S. state jurisdictions, and operations of Germany, the Netherlands and the U.K. The presentation as of December 31, 2016 reflected net deferred tax assets of U.S. federal and state jurisdictions and the net deferred tax liabilities related to operations of Germany and the U.K. As of December 31, 2017, the Company had $37.3 million of undistributed earnings (net of foreign taxes) of foreign subsidiaries. There were $12.5 million undistributed earnings (net of foreign taxes) of foreign subsidiaries as of December 31, 2016. As of December 31, 2017, the Company had $15.5 million of U.S. federal and $6.9 million of U.S. state R&D tax credits which, if not used, will expire between 2030 and 2037 for the U.S. federal R&D tax credits and between 2020 and 2032 for the state R&D tax credits. As of December 31, 2017, we had $44.0 million of state NOLs which may be used to offset state taxable income. The NOLs are reflected in the consolidated financial statements as a deferred tax asset of $2.6 million. If not used, substantially all of the NOLs will expire in various amounts between 2018 and 2036. The Company also had pre- acquisition and recognized built-in loss carryovers of $9.3 million, reflected as a deferred tax asset of $2.0 million. In addition, the Company had $3.1 million of federal Alternative Minimum Tax Credit carryovers, which under the Tax Act are fully refundable by no later than 2021. F-23 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following is a tabular reconciliation of the total amounts of uncertain tax positions as of and for the years ended December 31, 2017, 2016 and 2015: Balance at January 1, Increases in prior period tax positions Decreases in prior period tax positions Increases in current period tax positions Decreases due to lapse of statute of limitations Increases due to change in tax rates Increases (decreases) from foreign exchange rate changes For the Years Ended December 31, 2017 2016 2015 $ 10.3 $ 12.9 $ 0.4 (1.0) 0.7 (1.0) 0.4 0.2 — (2.6) 0.6 (0.3) — (0.3) 10.3 $ 7.0 0.5 — 5.5 — — (0.1) 12.9 Balance at December 31, $ 10.0 $ The $10.0 million of reserves for uncertain tax positions as of December 31, 2017 were reflected on the consolidated balance sheets as follows: $2.3 million netted against deferred tax assets, $5.3 million added to deferred tax liabilities and $2.4 million in other noncurrent obligations. The $10.3 million of reserves for uncertain tax positions as of December 31, 2016 were reflected on the consolidated balance sheets as follows: $7.6 million netted against deferred tax assets, $1.2 million netted against (added to) deferred tax liabilities and $1.5 million in other noncurrent obligations. If recognized, $9.6 million of the benefit for uncertain tax positions at December 31, 2017 would favorably affect the Company's effective tax rate in future periods. The Company does not expect that the expiration of the statute of limitations or the settlement of audits in the next 12 months will result in liabilities for uncertain income tax positions that are materially different than the amounts that were accrued as of December 31, 2017. The Company recognizes accrued interest and penalties related to uncertain income tax positions in the Provision for income taxes on the consolidated statements of operations. As of December 31, 2017 and 2016, the Company had $0.1 million and $0.2 million, respectively, accrued for interest and penalties related to uncertain income tax positions. As of December 31, 2017, the Company had a valuation allowance of $0.4 million against its state NOLs. As of December 31, 2016, the Company had a valuation allowance of $3.1 million against its state R&D tax credits and $0.4 million against its state NOLs. In determining the need for a valuation allowance, the Company considers many factors, including specific taxing jurisdictions, sources of taxable income, income tax strategies and forecasted earnings for the entities in each jurisdiction. A valuation allowance is recognized if, based on the weight of available evidence, the Company concludes that it is more likely than not that some portion or all of the deferred income tax asset will not be realized. F-24 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) Note 7. Debt Note 7. Debt Long-term debt consisted of the following: Long-term debt consisted of the following: 2021 Senior Notes (5.25% fixed rate) due May 2021 2021 Senior Notes (5.25% fixed rate) due May 2021 Global Revolving Credit Facilities (variable rates) due December 2019 Global Revolving Credit Facilities (variable rates) due December 2019 Second German Loan Agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 Second German Loan Agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022 Deferred financing costs Deferred financing costs Total Debt Total Debt Less: Debt payable within one year Less: Debt payable within one year Long-term debt Long-term debt Unsecured Senior Notes Unsecured Senior Notes 2021 Senior Notes 2021 Senior Notes December 31, December 31, 2017 2017 2016 2016 $ $ 175.0 175.0 $ $ 175.0 175.0 76.9 76.9 42.9 42.9 6.4 6.4 (2.8) (2.8) 255.5 255.5 6.8 6.8 (3.8) (3.8) 220.9 220.9 1.4 1.4 1.2 1.2 $ $ 254.1 254.1 $ $ 219.7 219.7 In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the "2021 Senior In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the "2021 Senior Notes") at a face amount of $175 million. The 2021 Senior Notes bear interest at a rate of 5.25%, payable in arrears on Notes") at a face amount of $175 million. The 2021 Senior Notes bear interest at a rate of 5.25%, payable in arrears on May 15 and November 15 of each year, commencing on November 15, 2013, and mature on May 15, 2021. Proceeds from May 15 and November 15 of each year, commencing on November 15, 2013, and mature on May 15, 2021. Proceeds from this offering were used to redeem the remaining $70 million outstanding principal amount of ten-year 7.375% senior this offering were used to redeem the remaining $70 million outstanding principal amount of ten-year 7.375% senior unsecured notes, originally issued on November 30, 2004, to repay approximately $56 million in outstanding revolving unsecured notes, originally issued on November 30, 2004, to repay approximately $56 million in outstanding revolving credit agreement borrowings and for general corporate purposes. The 2021 Senior Notes are fully and unconditionally credit agreement borrowings and for general corporate purposes. The 2021 Senior Notes are fully and unconditionally guaranteed by substantially all of the Company's domestic subsidiaries (the "Guarantors"). The 2021 Senior Notes were guaranteed by substantially all of the Company's domestic subsidiaries (the "Guarantors"). The 2021 Senior Notes were sold in a private placement transaction, have not been registered under the Securities Act of 1933, as amended, and may not sold in a private placement transaction, have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold absent registration or an applicable exemption from registration requirements. be offered or sold absent registration or an applicable exemption from registration requirements. F o r m 1 0 - K The 2021 Senior Notes rank equally in right of payment with all the Company's existing and future senior unsecured The 2021 Senior Notes rank equally in right of payment with all the Company's existing and future senior unsecured indebtedness. The guarantees of the 2021 Senior Notes are senior unsecured obligations of the Guarantors and rank equally indebtedness. The guarantees of the 2021 Senior Notes are senior unsecured obligations of the Guarantors and rank equally in right of payment with all existing and future senior unsecured indebtedness of the Guarantors. The 2021 Senior Notes in right of payment with all existing and future senior unsecured indebtedness of the Guarantors. The 2021 Senior Notes and the guarantees of the 2021 Senior Notes are effectively subordinated to the Company's and the Guarantors' existing and and the guarantees of the 2021 Senior Notes are effectively subordinated to the Company's and the Guarantors' existing and future secured indebtedness (to the extent of the value of the collateral) and are structurally subordinated to all future secured indebtedness (to the extent of the value of the collateral) and are structurally subordinated to all indebtedness and other obligations of the Company's subsidiaries that do not guarantee the 2021 Senior Notes, including indebtedness and other obligations of the Company's subsidiaries that do not guarantee the 2021 Senior Notes, including the trade creditors of such non-guarantor subsidiaries. the trade creditors of such non-guarantor subsidiaries. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. Among other things, the 2021 Senior Notes contain Company believes are ordinary and standard for notes of this nature. Among other things, the 2021 Senior Notes contain covenants restricting the Company's ability to incur certain additional debt, make specified restricted payments, pay covenants restricting the Company's ability to incur certain additional debt, make specified restricted payments, pay dividends, authorize or issue capital stock, enter into transactions with the Company's affiliates, consolidate or merge with dividends, authorize or issue capital stock, enter into transactions with the Company's affiliates, consolidate or merge with or acquire another business, sell certain of the Company's assets or liquidate, dissolve or wind-up the Company. As of or acquire another business, sell certain of the Company's assets or liquidate, dissolve or wind-up the Company. As of December 31, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes. December 31, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes. Amended and Restated Secured Revolving Credit Facility Amended and Restated Secured Revolving Credit Facility In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the "Third Amended Credit Agreement") by and among the Company and certain of its Restated Credit Agreement (the "Third Amended Credit Agreement") by and among the Company and certain of its domestic subsidiaries as the "Domestic Borrowers", Neenah Services GmbH & Co. KG ("Neenah Services") and certain of domestic subsidiaries as the "Domestic Borrowers", Neenah Services GmbH & Co. KG ("Neenah Services") and certain of its German subsidiaries as the "German Borrowers", certain other subsidiaries as the "German Guarantors", the financial its German subsidiaries as the "German Borrowers", certain other subsidiaries as the "German Guarantors", the financial F-25 F-25 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) institutions signatory to the Third Amended Credit Agreement as lenders (the "Lenders"), and JPMorgan Chase Bank, N.A., as agent for the Lenders (the "Administrative Agent"). On August 30, 2017, the Company amended the Third Amended Credit Agreement, among other things, to make certain definitional and administrative changes to address definition of EBITDA, Inter-Company Loans and Permitted Offshore Acquisitions, as further defined in the Third Amended Credit Agreement, in order to enable the Company to more efficiently operate and grow in international markets. On December 14, 2017, the Company amended the Third Amended and Restated Credit Agreement, among other things, to make certain definitional and administrative changes to the definition of Fixed Charge Coverage Ratio and amend certain restrictive covenants to reflect the financing structure of the Company's acquisition of Coldenhove. The Third Amended Credit Agreement, among other things: (1) increased the maximum principal amount of the existing credit facility for the Domestic Borrowers to $125 million (the "U.S. Revolving Credit Facility"); (2) established a secured, multicurrency, revolving credit facility for the German Borrowers in the maximum principal amount of $75 million (the "German Revolving Credit Facility," and together with the U.S. Revolving Credit Facility, the "Global Revolving Credit Facilities"); (3) caused the Company and the other Domestic Borrowers to guarantee, among other things, the obligations of the German Borrowers arising under the German Revolving Credit Facility; (4) provides for the Global Revolving Credit Facilities to mature on December 18, 2019; and (5) provides for an accordion feature permitting one or more increases in the Global Revolving Credit Facilities in an aggregate principal amount not exceeding $50 million, such that the aggregate commitments under the Global Revolving Credit Facilities do not exceed $250 million. In addition, the Domestic Borrowers may request letters of credit under the U.S. Revolving Credit Facility in an aggregate face amount not to exceed $20 million outstanding at any time, and the German Borrowers may request letters of credit under the German Revolving Credit Facility in an aggregate face amount not to exceed $2 million outstanding at any time. Proceeds of borrowings under the Global Revolving Credit Facilities may be used to finance working capital needs, permitted acquisitions, permitted investments (including certain inter-company loans), certain dividends, distributions and other restricted payments, and for other general corporate purposes. The consolidated statements of cash flows present borrowings and repayments under the Global Revolving Credit Facilities and the predecessor revolving bank credit facility using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the year ended December 31, 2017, $31 million was borrowed in conjunction with the Coldenhove Acquisition and the remaining $293 million included borrowings for daily cash management. For the year ended December 31, 2016, all of the borrowings related to daily cash management. For the year ended December 31, 2015, $38.0 million was borrowed in conjunction with the FiberMark Acquisition and the remaining $113.6 million included borrowings for daily cash management. The right of the Domestic Borrowers to borrow and obtain letters of credit under the U.S. Revolving Credit Facility is subject to, among other things, the borrowing base of the Domestic Borrowers on a consolidated basis (the "Domestic Borrowing Base"). The right of the German Borrowers to borrow and obtain letters of credit under the German Revolving Credit Facility is similarly subject to a borrowing base requirement (the "German Borrowing Base"). The German Borrowing Base is initially determined on a combined basis for all German Borrowers. Under certain circumstances (including the occurrence of an event of default resulting from an act or omission of any German Borrower or German Guarantor), the Administrative Agent may require the German Borrowing Base to be determined separately for each of the German Borrowers. At its option the Company may, from time to time, allocate a portion of the Domestic Borrowing Base to the German Borrowing Base (resulting in a corresponding reduction of the Domestic Borrowing Base); however, the principal amount of borrowings and the outstanding letter of credit exposure under the German Revolving Credit Facility may not at any time exceed the German Revolving Credit Facility commitment amount then in effect. The guarantees of the German Guarantors are limited solely to the German Revolving Credit Facility obligations. Under the terms of the Third Amended Credit Agreement and related loan documentation, neither the German Borrowers nor the German Guarantors (collectively, the "German Loan Parties") will be liable for any obligations relating to the U.S. Revolving Credit Facility. The Global Revolving Credit Facilities are secured by liens on all or substantially all of the assets of the Domestic Borrowers. The German Revolving Credit Facility is secured by liens on all or substantially all of F-26 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) the assets of the German Borrowers and certain assets of the German Guarantors. Any liens granted by the German Loan Parties secure only the German Revolving Credit Facility obligations. Terms, Covenants and Events of Default. In general, borrowings under the Global Revolving Credit Facilities will bear interest at LIBOR (which cannot be less than zero percent) plus an applicable margin ranging from 1.50% to 2.00%, depending on the amount of availability under the Third Amended Credit Agreement. In addition, the Company may elect an Alternate Borrowing Rate ("ABR") for borrowings under the Global Revolving Credit Facilities. ABR borrowings under the Global Revolving Credit Facilities will bear interest at the highest interest rate shown in the following table: Prime rate Federal funds rate +0.50% Monthly LIBOR (which cannot be less than zero percent) +1.00% Overnight LIBOR (which cannot be less than zero percent) Applicable Margin U.S. Revolving Credit Facility 0.00%-0.50% 0.00%-0.50% 0.00%-0.50% Not applicable German Revolving Credit Facility Not applicable Not applicable Not applicable 1.50%-2.00% F o r m 1 0 - K The Company is also required to pay a monthly commitment fee on the unused amounts available under the Global Revolving Credit Facilities at a per annum rate of 0.25%. If aggregate availability under the Global Revolving Credit Facilities is less than the greater of (i) $20 million and (ii) 10% of the maximum aggregate commitments under the Global Revolving Credit Facilities as then in effect, the Company is required to comply with a fixed charge coverage ratio (as defined in the Third Amended Credit Agreement) of not less than 1.1 to 1.0 for the preceding four-quarter period, tested as of the end of each quarter. Such compliance, once required, would no longer be necessary once (x) aggregate availability under the Global Revolving Credit Facilities exceeds the greater of (i) 17.5% of the aggregate commitment for the Global Revolving Credit Facilities and (ii) $35 million for 60 consecutive days and (y) no default or event of default has occurred and is continuing during such 60-day period. As of December 31, 2017, aggregate availability under the Global Revolving Credit Facilities exceeded the minimum required amount, and the Company is not required to comply with such fixed charge coverage ratio. The Third Amended Credit Agreement contains covenants, which the Company believes are ordinary and standard for agreements of this nature, with which the Company and its subsidiaries must comply during the term of the agreement. Among other things, such covenants restrict the ability of the Company and its subsidiaries to incur certain debt, incur or create certain liens, make specified restricted payments, authorize or issue capital stock, enter into transactions with their affiliates, consolidate, merge with or acquire another business, sell certain of their assets, or dissolve or wind up. In addition, if the aggregate availability under the Global Revolving Credit Facilities is less than the greater of (i) $25 million and (ii) 12.5% of the maximum aggregate commitments under the Global Revolving Credit Facilities as then in effect, the Company will be subject to increased reporting obligations and controls until such time as availability is more than the greater of (a) $35 million and (b) 17.5% of the maximum aggregate commitments under the Global Revolving Credit Facilities as then in effect. Under the most restrictive terms of the Third Amended and Restated Credit Agreement, we are permitted to pay cash dividends on or repurchase shares of our common stock up to the amount available under the Third Amended and Restated Credit Agreement, as long as the availability under the Third Amended and Restated Credit Agreement exceeds $25 million. If the availability is below $25 million, we are restricted from paying dividends or repurchasing shares. As of December 31, 2017, the Company's availability exceeded $25 million, so this restriction did not apply. The Third Amended Credit Agreement also contains events of default customary for financings of this type, including failure to pay principal or interest, materially false representations or warranties, failure to observe covenants and certain other terms of the Third Amended Credit Agreement, cross-defaults to certain other indebtedness, bankruptcy, insolvency, various ERISA and foreign pension violations, the incurrence of material judgments and changes in control. F-27 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company's inventory, receivables and various capital assets. As of December 31, 2017, the Company had $76.9 million of borrowings and $0.9 million in letters of credit outstanding under the Global Revolving Credit Facilities and $91.9 million of available credit (based on exchanges rates at December 31, 2017). As of December 31, 2017 and 2016, the weighted-average interest rate on outstanding Revolver borrowings was 2.7 percent and 2.8 percent per annum, respectively. Under the most restrictive terms of the 2021 Senior Notes, the Company is permitted to pay cash dividends of up to $25 million in a calendar year, but not permitted to repurchase shares of the Company's common stock. However, as long as the net leverage ratio (net debt/EBITDA) under the 2021 Senior Notes is below 2.5x, the Company can pay dividends or repurchase shares without limitation. In the event the net leverage ratio exceeds 2.5x, the Company may still pay dividends in excess of $25 million or repurchase shares by utilizing "restricted payment baskets" as defined in the indenture for the 2021 Senior Notes. As of December 31, 2017, since the Company's leverage ratio was less than 2.5x, none of these covenants were restrictive to the Company's ability to pay dividends on or repurchase shares of the Company's common stock. Other Debt In January 2013, Neenah Germany entered into a project financing agreement for the construction of a melt blown machine (the "Second German Loan Agreement"). The agreement provides for €9.0 million of construction financing which is secured by the melt blown machine. The loan matures in September 2022 and principal is repaid in equal quarterly installments beginning in December 2014. The interest rate on amounts outstanding is 2.45% based on actual days elapsed in a 360-day year and is payable quarterly. At December 31, 2017, €5.3 million ($6.4 million, based on exchange rates at December 31, 2017) was outstanding under the Second German Loan Agreement. Principal Payments The following table presents the Company's required debt payments: Debt payments 2018 $ 1.4 2019 $ 78.2 2020 $ 1.3 2021 $ 176.4 2022 Thereafter Total $ 1.0 $ — $ 258.3 Note 8. Pension and Other Postretirement Benefits Pension Plans Substantially all active employees of the Company's U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company also has defined benefit plans and/or alternative retirement plans for substantially all its employees in Germany, the U.K, and the Netherlands. In addition, the Company maintains a SERP which is a non-qualified defined benefit plan. The Company provides benefits under the SERP to the extent necessary to fulfill the intent of its defined benefit retirement plans without regard to the limitations set by the Internal Revenue Code on qualified defined benefit plans. During 2017, the Company recorded a $0.6 million settlement loss in SERP for a total payment of $1.3 million. During 2016, the Company offered a lump sum payout option to all eligible U.S. participants with a deferred vested pension benefit (the participant had a vested pension benefit but was no longer an employee of the Company). For the year ended December 31, 2016, 265 individuals elected the option and the Company paid a total of $8.1 million in lump-sum payments. For the year ended December 31, 2016, as allowed under ASC Topic 715, Compensation — Retirement Benefits ("ASC Topic 715"), the Company adopted a policy to recognize settlement losses for deferred vested pension benefit payments regardless of whether the amount exceeded the sum of expected service cost and interest costs of the pension F-28 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) plan for the respective calendar year. In accordance with ASC Topic 715, for the year ended December 31, 2016, the Company measured the liabilities of the post-retirement benefit plans and recognized a settlement loss of $0.8 million. The Company's funding policy for its U.S. qualified defined benefit plans and its U.K. defined benefit plan is to contribute assets in compliance with regulatory requirements to fund the projected benefit obligation. Nonqualified plans providing pension benefits in excess of limitations imposed by taxing authorities are not funded. There is no legal or governmental obligation to fund Neenah Germany's benefit plans and as such the Neenah Germany defined benefit plans are currently unfunded. As of December 31, 2017, Neenah Germany had investments of $1.7 million that were restricted to the payment of certain post-retirement employee benefits. As of December 31, 2017, $0.6 million and $1.1 million of such investments are classified as Prepaid and other current assets and Other assets, respectively, on the consolidated balance sheet. Neenah Coldenhove retirement benefit obligations are administered by a third-party insurance company, and funding for these benefits comes from premiums paid. The Company also holds $3.6 million of marketable securities that are designated for the payment of benefits under the SERP as of December 31, 2017, classified as Other assets on the consolidated balance sheet. The Company uses the fair value of pension plan assets to determine pension expense, rather than averaging gains and losses over a period of years. Investment gains or losses represent the difference between the expected return calculated using the fair value of the assets and the actual return based on the fair value of assets. The Company's pension obligations are measured annually as of December 31. Multi-Employer plan The hourly employees of the Lowville, New York facility are covered by a multi-employer defined benefit plan. The Company's expense under this plan was less than $0.1 million for the year ended December 31, 2017. The Company contributes to the multi-employer pension plan under a collective bargaining agreement which provides retirement benefits for certain union employees. The risks of participating in a multi-employer plan are different from single employer plans, as assets contributed are available to provide benefits to all participants of the plan (including employees of other employers) and unfunded obligations are the responsibility of all remaining employers. In the event the Company ceases participation or in the event of the multi-employer plan's termination, the Company may be liable for a portion of the multi- employer plan’s unfunded benefits. F o r m 1 0 - K The most recent Pension Protection Act zone status available is for the plan's year-end at December 31, 2016. The zone status in the following table is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. Information for the multi-employer pension plan in which the Company participates is shown in the table below. The "FIP/RP Status Pending/Implemented" column indicates a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or has been implemented for the plan. For the year ended December 31, 2016, the Company's contributions to the plan were less than 5% of total plan contributions. EIN/Pension Plan Number Pension Zone Status 2016 FIP/RP Status Pending or Implemented Contributions 2017 Surcharge Imposed Expiration Date of Collective Bargaining Agreement 11-6166763 Red Implemented $0.1 million Yes 11/9/2021 Pension Fund PACE Industry Union Management Pension Fund Other Postretirement Benefit Plans The Company maintains postretirement health care and life insurance benefit plans for active employees of the Company and former employees of the Canadian pulp operations. The Canadian plans are generally noncontributory for employees who were eligible to retire on or before December 31, 1992 and contributory for most employees who became eligible to F-29 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) retire on or after January 1, 1993. The Company does not provide a subsidized benefit to non-union U.S. employees hired after 2003 or collectively bargained employees after 2005. The Company's obligations for postretirement benefits other than pensions are measured annually as of December 31. At December 31, 2017, the assumed inflationary health care cost trend rates used to determine obligations at December 31, 2017 and costs for the year ended December 31, 2018 is 6.8 percent gradually decreasing to an ultimate rate of 4.5 percent in 2037. The assumed inflationary health care cost trend rates used to determine obligations at December 31, 2016 and costs for the year ended December 31, 2017 were 7.0 percent gradually decreasing to an ultimate rate of 4.5 percent in 2037. F-30 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following table reconciles the benefit obligations, plan assets, funded status and net liability information of the Company's pension and other postretirement benefit plans. Change in Benefit Obligation: Benefit obligation at beginning of year Service cost Interest cost Currency Actuarial (gain) loss Benefit payments from plans Settlement payments Net transfer in (1) Other Benefit obligation at end of year Change in Plan Assets: Fair value of plan assets at beginning of year Actual gain (loss) on plan assets Employer contributions Currency Benefit payments Settlement payments Net transfers in (1) Other Fair value of plan assets at end of year Reconciliation of Funded Status Fair value of plan assets Projected benefit obligation Net liability recognized in statement of financial position Amounts recognized in statement of financial position consist of: Current liabilities Noncurrent liabilities Net amount recognized _______________________ Pension Benefits Postretirement Benefits Other than Pensions Year Ended December 31, 2017 2016 2017 2016 $ 370.9 $ 360.1 $ 40.7 $ 40.5 5.5 15.0 6.8 33.3 (18.1) (1.5) 51.7 0.3 463.9 318.1 38.5 14.3 2.2 (18.1) (1.5) 46.8 0.1 400.4 400.4 $ $ $ $ 4.9 15.9 (3.1) 18.2 (17.1) (8.1) 0.1 — 370.9 308.3 17.6 17.8 (1.7) (15.8) (8.1) — — 318.1 318.1 $ $ $ $ 463.9 (63.5) $ 370.9 (52.8) $ 1.2 1.4 0.6 3.9 (3.8) — — — 1.3 1.6 0.1 (1.2) (3.8) — — 2.2 44.0 $ 40.7 — $ — — — — — — — — $ — $ 44.0 (44.0) $ F o r m 1 0 - K — — — — — — — — — — 40.7 (40.7) (4.3) (36.4) (40.7) (3.7) $ (59.8) (63.5) $ (3.8) $ (49.0) (52.8) $ (5.3) $ (38.7) (44.0) $ $ $ $ $ $ $ $ (1) For the year ended December 31, 2017, the Company acquired $51.7 million of pension liabilities and $46.8 million of pension assets in conjunction with the Coldenhove Acquisition. F-31 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Amounts recognized in accumulated other comprehensive income consist of: Accumulated actuarial loss Prior service cost Total recognized in accumulated other comprehensive income Summary disaggregated information about the pension plans follows: Pension Benefits Postretirement Benefits Other than Pensions December 31, 2017 2016 2017 2016 $ 105.9 0.8 $ 106.7 $ $ 95.8 0.9 96.7 $ $ 8.6 (0.2) 8.4 $ $ 4.9 (0.4) 4.5 Projected benefit obligation Accumulated benefit obligation Fair value of plan assets Components of Net Periodic Benefit Cost Service cost Interest cost Expected return on plan assets (a) Recognized net actuarial loss Amortization of prior service cost (credit) Amount of settlement loss recognized Net periodic benefit cost (credit) Amounts related to discontinued operations Net periodic benefit cost _______________________ Assets Exceed ABO December 31, ABO Exceed Assets Total 2017 2016 2017 2016 2017 2016 $ — $ 291.3 $ 463.9 $ — — 281.5 284.2 451.4 400.4 79.6 79.4 33.9 $ 463.9 $ 451.4 400.4 370.9 360.9 318.1 Pension Benefits Postretirement Benefits Other than Pensions Year Ended December 31, 2017 2016 2015 2017 2016 2015 $ 5.5 $ 4.9 $ 5.5 $ 1.2 $ 1.3 $ 1.7 15.0 (19.9) 5.6 0.2 0.6 7.0 — $ 7.0 15.9 (18.9) 6.6 0.2 0.8 1.4 13.8 (19.3) — 0.3 (0.2) — 6.3 0.2 — 9.5 2.7 6.5 — (14.9) — $ (8.4) $ 2.7 $ 9.5 1.6 — 0.6 (0.2) — 3.3 — 1.6 — 0.3 (0.2) — 3.4 — $ 3.3 $ 3.4 (a) The expected return on plan assets, excluding the Dutch plan assets, is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations. F-32 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Pension Benefits Pension Benefits Postretirement Benefits Other than Pensions Postretirement Benefits Other than Pensions Year Ended December 31, Year Ended December 31, 2017 2017 2016 2016 2015 2015 2017 2017 2016 2016 2015 2015 Net periodic benefit expense Net periodic benefit expense Accumulated actuarial gain (loss) Accumulated actuarial gain (loss) Prior service cost (credit) Prior service cost (credit) Total recognized in other comprehensive income Total recognized in other comprehensive income Total recognized in net periodic benefit cost and other comprehensive income Total recognized in net periodic benefit cost and other comprehensive income $ 7.0 $ 7.0 $ $ 9.5 9.5 10.1 (0.1) 10.0 10.1 (0.1) 10.0 11.7 (0.3) 11.4 11.7 (0.3) 11.4 $ (8.4) $ 2.7 (7.1) 3.7 (0.3) (7.4) $ (8.4) $ 2.7 (7.1) 3.7 (0.3) (7.4) 3.9 0.2 0.2 3.9 $ 3.3 (0.9) 0.1 (0.8) $ 3.3 (0.9) 0.1 (0.8) $ 3.4 $ 3.4 1.1 1.1 0.2 0.2 1.3 1.3 $ 17.0 $ 17.0 $ 20.9 $ 20.9 $(15.8) $ 6.6 $(15.8) $ 6.6 $ 2.5 $ 2.5 $ 4.7 $ 4.7 The estimated net actuarial loss and prior service cost for the defined benefit pension plans expected to be amortized from The estimated net actuarial loss and prior service cost for the defined benefit pension plans expected to be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $5.4 million and $0.2 accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $5.4 million and $0.2 million, respectively. The estimated net actuarial loss and prior service (credit) for postretirement benefits other than million, respectively. The estimated net actuarial loss and prior service (credit) for postretirement benefits other than pensions expected to be amortized from accumulated other comprehensive income into net periodic benefit cost over the pensions expected to be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.6 million and $(0.2) million, respectively. next fiscal year is $0.6 million and $(0.2) million, respectively. Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31 Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31 Discount rate Discount rate Rate of compensation increase Rate of compensation increase Pension Benefits Pension Benefits Postretirement Postretirement Benefits Benefits Other than Other than Pensions Pensions 2017 2017 2016 2016 2017 2017 2016 2016 3.49% 4.16% 3.27% 3.69% 3.49% 4.16% 3.27% 3.69% 2.40% 2.22% 2.40% 2.22% —% —% —% —% F o r m 1 0 - K Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31 Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31 Pension Benefits Pension Benefits Postretirement Postretirement Benefits Other than Benefits Other than Pensions Pensions Year Ended December 31, Year Ended December 31, 2017 2017 2016 2016 2015 2015 2017 2017 2016 2016 2015 2015 Discount rate Discount rate 4.18% 4.54% 3.91% 3.89% 4.07% 4.05% 4.18% 4.54% 3.91% 3.89% 4.07% 4.05% Expected long-term return on plan assets (a) Expected long-term return on plan assets (a) 6.31% 6.20% 6.50% 6.31% 6.20% 6.50% —% —% —% —% —% —% Rate of compensation increase Rate of compensation increase _______________________ _______________________ 2.49% 2.18% 2.92% 2.49% 2.18% 2.92% —% —% —% —% —% —% (a) The expected long-term return on plan assets does not include the Dutch plan assets. The Dutch pension plan is (a) The expected long-term return on plan assets does not include the Dutch plan assets. The Dutch pension plan is funded through an insurance contract, and the expected return on plan assets is calculated based on the discount funded through an insurance contract, and the expected return on plan assets is calculated based on the discount rate of the insured obligations. rate of the insured obligations. F-33 F-33 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Expected Long-Term Rate of Return and Investment Strategies The expected long-term rate of return on pension fund assets held by the Company's pension trusts was determined based on several factors, including input from pension investment consultants and projected long-term returns of broad equity and bond indices. Also considered were the plans' historical compounded annual returns. It is anticipated that, on average, the managed pension plan assets will generate annual long-term rates of return of 6.30 percent. The expected long-term rate of return on the assets in the plans was based on an asset allocation assumption of approximately 35 percent with equity managers, with expected long-term rates of return of approximately 8 to 10 percent, 8 percent with hedge funds, with expected long-term rates of return of approximately 6 to 8 percent, and 57 percent with fixed income managers, with an expected long-term rate of return of about 3 to 5 percent. The actual asset allocation is regularly reviewed and periodically rebalanced to the targeted allocation when considered appropriate. Plan Assets Pension plan asset allocations are as follows: Asset Category (a) Equity securities Hedge fund Debt securities Total Percentage of Plan Assets At December 31, 2017 2016 35% 8% 57% 36% 7% 57% 100% 100% (a) The asset categories do not include the insurance contract related to the Dutch pension plan. The Company's investment objective for pension plan assets are to ensure, over the long-term life of the pension plans, an adequate pool of assets to support the benefit obligations to participants, retirees, and beneficiaries. Specifically, these objectives include the desire to: (a) invest assets in a manner such that future assets are available to fund liabilities, (b) maintain liquidity sufficient to pay current benefits when due and (c) diversify, over time, among asset classes so assets earn a reasonable return with acceptable risk to capital. The weighted average target investment allocation and permissible allocation range for plan assets by category are as follows: Asset Category Equity securities Hedge fund Debt securities / Fixed Income Strategic Target Permitted Range 35% 8% 57% 30-40% 3-12% 52-62% As of December 31, 2017, no company or group of companies in a single industry represented more than five percent of plan assets. F-34 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) The Company's investment assumptions are established by an investment committee composed of members of senior The Company's investment assumptions are established by an investment committee composed of members of senior management and are validated periodically against actual investment returns. As of December 31, 2017, the Company's management and are validated periodically against actual investment returns. As of December 31, 2017, the Company's investment assumptions are as follows: investment assumptions are as follows: (a) The plan should be substantially fully invested in debt and equity securities at all times because substantial cash (a) The plan should be substantially fully invested in debt and equity securities at all times because substantial cash holdings will reduce long-term rates of return; holdings will reduce long-term rates of return; (b) Equity investments will provide greater long-term returns than fixed income investments, although with greater (b) Equity investments will provide greater long-term returns than fixed income investments, although with greater short-term volatility; short-term volatility; (c) It is prudent to diversify plan investments across major asset classes; (d) Allocating a portion of plan assets to foreign equities will increase portfolio diversification, decrease portfolio risk (c) It is prudent to diversify plan investments across major asset classes; (d) Allocating a portion of plan assets to foreign equities will increase portfolio diversification, decrease portfolio risk and provide the potential for long-term returns; and provide the potential for long-term returns; (e) Investment managers with active mandates can reduce portfolio risk below market risk and potentially add value (e) Investment managers with active mandates can reduce portfolio risk below market risk and potentially add value through security selection strategies, and a portion of plan assets should be allocated to such active mandates; through security selection strategies, and a portion of plan assets should be allocated to such active mandates; (f) A component of passive, indexed management can benefit the plans through greater diversification and lower (f) A component of passive, indexed management can benefit the plans through greater diversification and lower cost, and a portion of the plan assets should be allocated to such passive mandates, and cost, and a portion of the plan assets should be allocated to such passive mandates, and (g) It is appropriate to retain more than one investment manager, given the size of the plans, provided that such (g) It is appropriate to retain more than one investment manager, given the size of the plans, provided that such managers offer asset class or style diversification. managers offer asset class or style diversification. For the years ended December 31, 2017, 2016 and 2015, no plan assets were invested in the Company's securities. For the years ended December 31, 2017, 2016 and 2015, no plan assets were invested in the Company's securities. Cash Flows Cash Flows At December 31, 2017, the Company expects to make aggregate contributions to qualified pension trusts and payments of pension benefits for unfunded pension plans in 2018 of approximately $14.7 million (based on exchange rates at December 31, 2017). At December 31, 2017, the Company expects to make aggregate contributions to qualified pension trusts and payments of pension benefits for unfunded pension plans in 2018 of approximately $14.7 million (based on exchange rates at December 31, 2017). F o r m 1 0 - K Future Benefit Payments Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: 2018 2019 2020 2021 2022 Years 2023-2027 2018 2019 2020 2021 2022 Years 2023-2027 $ Pension Plans $ Pension Plans 22.7 22.7 24.4 24.4 21.7 21.7 23.4 23.4 23.3 23.3 128.1 128.1 Postretirement Postretirement Benefits Benefits Other than Other than Pensions Pensions $ $ 5.3 5.3 4.3 4.3 4.6 4.6 4.9 4.9 4.8 4.8 18.1 18.1 F-35 F-35 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Health Care Cost Trends Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans. A one percentage-point change in assumed health care cost trend rates would have the following effects: Effect on total of service and interest cost components Effect on post-retirement benefit other than pension obligation One Percentage- Point Increase Decrease $ — $ 0.2 — (0.3) Defined Contribution Retirement Plans Company contributions to defined contribution retirement plans are primarily based on the age and compensation of covered employees. Contributions to these plans, all of which were charged to expense, were $2.5 million in 2017, $2.7 million in 2016 and $2.5 million in 2015. In addition, the Company maintains a supplemental retirement contribution plan (the "SRCP") which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SRCP to the extent necessary to fulfill the intent of its defined contribution retirement plans without regard to the limitations set by the Internal Revenue Code on qualified defined contribution plans. For the years ended December 31, 2017, 2016 and 2015, the Company recognized expense related to the SRCP of $0.4 million, $0.4 million and $0.2 million, respectively. At December 31, 2017 and December 31, 2016, the unfunded obligation of the SRCP was $1.7 million and $1.3 million, respectively. Investment Plans The Company provides voluntary contribution investment plans to substantially all North American employees. Under the plans, the Company matches a portion of employee contributions. For the years ended December 31, 2017, 2016 and 2015, costs charged to expense for Company matching contributions under these plans were $3.7 million, $3.1 million and $2.7 million, respectively. Note 9. Stock Compensation Plans The Company established the 2004 Omnibus Stock and Incentive Plan (the "2004 Omnibus Plan") in December 2004 and reserved 3,500,000 shares of $0.01 par value common stock ("Common Stock") for issuance under the Omnibus Plan. Pursuant to the terms of the 2004 Omnibus Plan, the compensation committee of the Company's Board of Directors may grant various types of equity-based compensation awards, including incentive and nonqualified stock options, SARs, restricted stock, RSUs, Performance Units, in addition to certain cash-based awards. All grants under the Omnibus Plan will be made at fair market value and no grant may be repriced. In general, the options expire 10 years from the date of grant and vest over a 3-year service period. At the 2013 Annual Meeting of Stockholders, the Company's stockholders approved an amendment and restatement of the 2004 Omnibus Plan (as amended and restated the "2013 Omnibus Plan"). The amendment and restatement authorized the Company to reserve an additional 1,577,000 shares of Common Stock for future issuance. As of December 31, 2017, the Company had 680,000 shares of Common Stock reserved for future issuance under the 2013 Omnibus Plan. As of December 31, 2017, the number of shares available for future issuance was reduced by approximately 134,000 shares for outstanding SARs where the closing market price for the Company's common stock was greater than the exercise price of the SAR. The Company accounts for stock-based compensation pursuant to the fair value recognition provisions of ASC Topic 718, Compensation — Stock Compensation ("ASC Topic 718"). F-36 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) Valuation and Expense Information Under ASC Topic 718 Valuation and Expense Information Under ASC Topic 718 Substantially all stock-based compensation expense has been recorded in selling, general and administrative expenses. The following table summarizes stock-based compensation costs and related income tax benefits. Substantially all stock-based compensation expense has been recorded in selling, general and administrative expenses. The following table summarizes stock-based compensation costs and related income tax benefits. Stock-based compensation expense Stock-based compensation expense Income tax benefit Income tax benefit Stock-based compensation, net of income tax benefit Stock-based compensation, net of income tax benefit Year Ended December 31, Year Ended December 31, 2017 2017 2016 2016 2015 2015 $ $ $ $ 6.4 (2.5) 3.9 $ 6.4 (2.5) $ 3.9 $ $ 5.8 (2.2) 3.6 $ 5.8 (2.2) $ 3.6 $ $ 6.5 (2.5) 4.0 6.5 (2.5) 4.0 The following table summarizes total compensation costs related to the Company's equity awards and amounts recognized in the year ended December 31, 2017. The following table summarizes total compensation costs related to the Company's equity awards and amounts recognized in the year ended December 31, 2017. Unrecognized compensation cost — December 31, 2016 Unrecognized compensation cost — December 31, 2016 $ $ 0.6 0.6 $ $ Grant date fair value current year grants Grant date fair value current year grants Compensation expense recognized Compensation expense recognized Unrecognized compensation cost — December 31, 2017 Unrecognized compensation cost — December 31, 2017 $ $ Expected amortization period (in years) Expected amortization period (in years) 1.9 (1.9) 0.6 1.9 (1.9) $ 0.6 1.8 1.8 $ 1.7 1.7 5.1 (4.5) 2.3 5.1 (4.5) 2.3 1.7 1.7 F o r m 1 0 - K Stock Options Stock Options Performance Performance Shares and RSUs Shares and RSUs Stock Options/SARs Stock Options/SARs In August 2014, the Compensation Committee of the Board of Directors approved the conversion of approximately In August 2014, the Compensation Committee of the Board of Directors approved the conversion of approximately 545,000 outstanding non-qualified stock options held by U.S. employees and U.S. non-employee directors to an equal 545,000 outstanding non-qualified stock options held by U.S. employees and U.S. non-employee directors to an equal number of SARs. Upon exercise, the holder of an SAR will receive common shares equal to the number of SARs exercised number of SARs. Upon exercise, the holder of an SAR will receive common shares equal to the number of SARs exercised multiplied by a fraction where the numerator is equal to the market price at the time of exercise minus the exercise price of multiplied by a fraction where the numerator is equal to the market price at the time of exercise minus the exercise price of the SAR and the denominator is equal to the market price at the time of exercise. The SARs can only be settled for shares the SAR and the denominator is equal to the market price at the time of exercise. The SARs can only be settled for shares of Common Stock and the Company will not receive any cash proceeds upon exercise. All other contractual terms of the of Common Stock and the Company will not receive any cash proceeds upon exercise. All other contractual terms of the SARs are unchanged from those of the converted non-qualified stock options. At the date of conversion the fair value of SARs are unchanged from those of the converted non-qualified stock options. At the date of conversion the fair value of the SARs was equal to the fair value of the stock options exchanged. As a result, the Company did not recognize any the SARs was equal to the fair value of the stock options exchanged. As a result, the Company did not recognize any additional compensation expense due to the conversion. additional compensation expense due to the conversion. The following tables present information regarding stock options awarded during the years ended December 31, 2017, 2016 and 2015. The following tables present information regarding stock options awarded during the years ended December 31, 2017, 2016 and 2015. Nonqualified stock options granted Nonqualified stock options granted Per share weighted-average exercise price Per share weighted-average exercise price Per share weighted-average grant date fair value Per share weighted-average grant date fair value 2017 2017 2016 2016 2015 2015 144,089 144,089 113,935 113,935 87,930 87,930 $ $ $ $ 82.11 82.11 $ 13.54 13.54 $ $ $ 58.03 58.03 $ 13.51 13.51 $ $ $ 59.72 59.72 16.47 16.47 F-37 F-37 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES (Dollars in millions, except as noted) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) The weighted-average grant date fair value for stock options granted for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes option valuation model with the following assumptions: The weighted-average grant date fair value for stock options granted for the years ended December 31, 2017, 2016 and The weighted-average grant date fair value for stock options granted for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes option valuation model with the following assumptions: 2015 was estimated using the Black-Scholes option valuation model with the following assumptions: Expected term in years Risk free interest rate Expected term in years Expected term in years Volatility Risk free interest rate Risk free interest rate Dividend yield Volatility Volatility Dividend yield Dividend yield 2017 5.8 2017 2017 2016 5.8 2016 2016 2015 5.8 2015 2015 2.1% 5.8 5.8 1.4% 1.8% 5.8 5.8 5.8 5.8 22.9% 32.1% 34.4% 1.4% 1.4% 1.8% 1.8% 2.1% 2.1% 2.0% 3.0% 3.0% 22.9% 32.1% 34.4% 22.9% 32.1% 34.4% 3.0% 3.0% 3.0% 3.0% 2.0% 2.0% Expected volatility and the expected term were estimated by reference to the historical stock price performance of the Company and historical data for the Company's stock option awards, respectively. The risk-free interest rate was based on Expected volatility and the expected term were estimated by reference to the historical stock price performance of the Expected volatility and the expected term were estimated by reference to the historical stock price performance of the the yield on U.S. Treasury bonds with a remaining term approximately equal to the expected term of the stock option Company and historical data for the Company's stock option awards, respectively. The risk-free interest rate was based on Company and historical data for the Company's stock option awards, respectively. The risk-free interest rate was based on awards. Forfeitures were estimated at the date of grant. the yield on U.S. Treasury bonds with a remaining term approximately equal to the expected term of the stock option the yield on U.S. Treasury bonds with a remaining term approximately equal to the expected term of the stock option awards. Forfeitures were estimated at the date of grant. awards. Forfeitures were estimated at the date of grant. The following table summarizes stock option activity under the Omnibus Plan for the year ended December 31, 2017: The following table summarizes stock option activity under the Omnibus Plan for the year ended December 31, 2017: The following table summarizes stock option activity under the Omnibus Plan for the year ended December 31, 2017: Number of Stock Options Weighted-Average Exercise Price Options outstanding — December 31, 2016 Add: Options granted Options outstanding — December 31, 2016 Options outstanding — December 31, 2016 Less: Options exercised Add: Options granted Add: Options granted Less: Options forfeited/cancelled Less: Options exercised Less: Options exercised Options outstanding — December 31, 2017 Less: Options forfeited/cancelled Less: Options forfeited/cancelled Options outstanding — December 31, 2017 Options outstanding — December 31, 2017 530,462 Number of Number of Stock Options Stock Options 144,089 530,462 530,462 207,973 144,089 144,089 1,620 207,973 207,973 464,958 1,620 1,620 464,958 464,958 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Weighted-Average Weighted-Average Exercise Price Exercise Price 38.35 82.11 38.35 38.35 29.88 82.11 82.11 65.60 29.88 29.88 55.60 65.60 65.60 55.60 55.60 The status of outstanding and exercisable stock options as of December 31, 2017, summarized by exercise price follows: The status of outstanding and exercisable stock options as of December 31, 2017, summarized by exercise price follows: The status of outstanding and exercisable stock options as of December 31, 2017, summarized by exercise price follows: Options Vested or Expected to Vest Options Exercisable Exercise Price $7.41 — $19.25 Exercise Price Exercise Price $21.13 — $31.23 $7.41 — $19.25 $7.41 — $19.25 $42.82 — $51.99 $21.13 — $31.23 $21.13 — $31.23 $55.49 — $60.56 $42.82 — $51.99 $42.82 — $51.99 >$60.56 $55.49 — $60.56 $55.49 — $60.56 >$60.56 >$60.56 _______________________ Options Vested or Expected to Vest Options Vested or Expected to Vest Weighted- Average Exercise Weighted- Weighted- Price Average Average Exercise Exercise Price Price $ 13.06 $ Aggregate Intrinsic Value (a) Aggregate Aggregate Intrinsic Intrinsic Value (a) Value (a) 4.1 Options Exercisable Options Exercisable Weighted- Average Exercise Weighted- Weighted- Price Average Average Exercise Exercise Price Price 13.06 $ Number of Options 52,727 Number of Number of Options Options Number of Options 52,727 Number of Number of Options Options $ $ 58,490 52,727 52,727 37,526 58,490 58,490 172,626 37,526 37,526 143,589 172,626 172,626 464,958 143,589 143,589 $ $ $ $ $ $ $ $ $ $ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) $ $ $ $ $ 3.7 4.1 4.1 1.8 3.7 3.7 NEENAH, INC. AND SUBSIDIARIES 5.5 1.8 1.8 1.2 5.5 5.5 16.3 1.2 1.2 (Dollars in millions, except as noted) 16.3 16.3 58,490 52,727 52,727 37,526 58,490 58,490 76,141 37,526 37,526 17,060 76,141 76,141 241,944 17,060 17,060 27.56 13.06 13.06 43.49 27.56 27.56 58.68 43.49 43.49 82.11 58.68 58.68 55.60 82.11 82.11 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 464,958 464,958 55.60 55.60 6.6 6.6 $ $ $ $ $ 27.56 13.06 13.06 43.49 27.56 27.56 58.93 43.49 43.49 82.15 58.93 58.93 40.59 82.15 82.15 241,944 241,944 $ $ 40.59 40.59 Weighted- Average Remaining Weighted- Weighted- Contractual Average Average Life (Years) Remaining Remaining 1.9 Contractual Contractual Life (Years) Life (Years) 3.9 1.9 1.9 6.0 3.9 3.9 7.5 6.0 6.0 8.5 7.5 7.5 6.6 8.5 8.5 Aggregate Intrinsic Value (a) Aggregate Aggregate Intrinsic Intrinsic Value (a) Value (a) 4.1 3.7 4.1 4.1 1.8 3.7 3.7 2.4 1.8 1.8 0.1 2.4 2.4 12.1 0.1 0.1 12.1 12.1 $ $ $ $ $ $ _______________________ _______________________ (a) Represents the total pre-tax intrinsic value as of December 31, 2017 that option holders would have received had they exercised their options as of such date. The pre-tax intrinsic value is based on the closing market price for the Company's common stock of $90.65 on December 31, 2017. F-38 The aggregate pre-tax intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 was $11.5 million, $4.7 million and $5.5 million, respectively. The following table summarizes the status of the Company's unvested stock options as of December 31, 2017 and activity for the year then ended: F-38 F-38 Number of Stock Options Weighted-Average Grant Date Fair Value 194,126 144,089 115,201 223,014 $ $ $ $ 15.15 13.54 14.06 13.87 Outstanding — December 31, 2016 Add: Options granted Less: Options vested Outstanding — December 31, 2017 stock option grant. PSUs/RSUs As of December 31, 2017, certain participants met age and service requirements that allowed their options to qualify for accelerated vesting upon retirement. As of December 31, 2017, there were approximately 155,000 stock options subject to accelerated vesting that such participants would have been eligible to exercise if they had retired as of such date. The aggregate grant date fair value of options subject to accelerated vesting was $2.1 million. For the year ended December 31, 2017, stock-based compensation expense for such options was $1.2 million. For the year ended December 31, 2017, the aggregate grant date fair value of options vested, including options subject to accelerated vesting, was $1.9 million. Stock options that reflect accelerated vesting for expense recognition become exercisable according to the contract terms of the For the year ended December 31, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for certain items as further described in the Performance Share Award Agreement. As of December 31, 2017, the Company expects that Common Stock equal to approximately 101 percent of the PSU targets will be earned. The market price on the date of grant for the PSUs was $82.12 per share. At the end of the measurement period, the PSUs convert into RSUs, at the determined rate mentioned above, that are entitled to dividends but do not have voting rights. The Company is recognizing stock-based compensation expense pro-rata over the vesting term of the PSUs/RSUs. For further discussion on participating securities refer to Note 3. "Earnings Per Share". For the year ended December 31, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of Directors and 866 RSUs to employees. The weighted-average grant date fair value of such awards was $76.78 per share and the awards vest one year from the date of grant for the Board of Directors grants and three years from the date of grant for the employee grants. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights and are forfeited in the event the holder is no longer an employee or member of the Board of Directors on the vesting date. F-39 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (a) Represents the total pre-tax intrinsic value as of December 31, 2017 that option holders would have received had (Dollars in millions, except as noted) (Dollars in millions, except as noted) they exercised their options as of such date. The pre-tax intrinsic value is based on the closing market price for the Company's common stock of $90.65 on December 31, 2017. (a) Represents the total pre-tax intrinsic value as of December 31, 2017 that option holders would have received had (a) Represents the total pre-tax intrinsic value as of December 31, 2017 that option holders would have received had they exercised their options as of such date. The pre-tax intrinsic value is based on the closing market price for the they exercised their options as of such date. The pre-tax intrinsic value is based on the closing market price for the Company's common stock of $90.65 on December 31, 2017. Company's common stock of $90.65 on December 31, 2017. The aggregate pre-tax intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 was $11.5 million, $4.7 million and $5.5 million, respectively. The following table summarizes the status of the Company's unvested stock options as of December 31, 2017 and activity The aggregate pre-tax intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 The aggregate pre-tax intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 for the year then ended: was $11.5 million, $4.7 million and $5.5 million, respectively. was $11.5 million, $4.7 million and $5.5 million, respectively. Weighted-Average The following table summarizes the status of the Company's unvested stock options as of December 31, 2017 and activity The following table summarizes the status of the Company's unvested stock options as of December 31, 2017 and activity Grant Date for the year then ended: for the year then ended: Fair Value Number of Stock Options Outstanding — December 31, 2016 Add: Options granted Less: Options vested Outstanding — December 31, 2016 Outstanding — December 31, 2016 Outstanding — December 31, 2017 Add: Options granted Add: Options granted Less: Options vested Less: Options vested 194,126 144,089 Number of Number of Stock Options Stock Options 115,201 194,126 194,126 223,014 144,089 144,089 115,201 115,201 $ $ $ $ $ $ $ $ $ $ 15.15 Weighted-Average Weighted-Average Grant Date Grant Date Fair Value Fair Value 13.54 14.06 15.15 15.15 13.87 13.54 13.54 14.06 14.06 223,014 223,014 Outstanding — December 31, 2017 Outstanding — December 31, 2017 As of December 31, 2017, certain participants met age and service requirements that allowed their options to qualify for accelerated vesting upon retirement. As of December 31, 2017, there were approximately 155,000 stock options subject to accelerated vesting that such participants would have been eligible to exercise if they had retired as of such date. The aggregate grant date fair value of options subject to accelerated vesting was $2.1 million. For the year ended December 31, As of December 31, 2017, certain participants met age and service requirements that allowed their options to qualify for As of December 31, 2017, certain participants met age and service requirements that allowed their options to qualify for 2017, stock-based compensation expense for such options was $1.2 million. For the year ended December 31, 2017, the accelerated vesting upon retirement. As of December 31, 2017, there were approximately 155,000 stock options subject to accelerated vesting upon retirement. As of December 31, 2017, there were approximately 155,000 stock options subject to aggregate grant date fair value of options vested, including options subject to accelerated vesting, was $1.9 million. Stock accelerated vesting that such participants would have been eligible to exercise if they had retired as of such date. The accelerated vesting that such participants would have been eligible to exercise if they had retired as of such date. The options that reflect accelerated vesting for expense recognition become exercisable according to the contract terms of the aggregate grant date fair value of options subject to accelerated vesting was $2.1 million. For the year ended December 31, aggregate grant date fair value of options subject to accelerated vesting was $2.1 million. For the year ended December 31, stock option grant. 2017, stock-based compensation expense for such options was $1.2 million. For the year ended December 31, 2017, the 2017, stock-based compensation expense for such options was $1.2 million. For the year ended December 31, 2017, the aggregate grant date fair value of options vested, including options subject to accelerated vesting, was $1.9 million. Stock aggregate grant date fair value of options vested, including options subject to accelerated vesting, was $1.9 million. Stock options that reflect accelerated vesting for expense recognition become exercisable according to the contract terms of the options that reflect accelerated vesting for expense recognition become exercisable according to the contract terms of the PSUs/RSUs stock option grant. stock option grant. $ $ 13.87 13.87 F o r m 1 0 - K For the year ended December 31, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is PSUs/RSUs PSUs/RSUs January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested For the year ended December 31, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for For the year ended December 31, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than certain items as further described in the Performance Share Award Agreement. 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® As of December 31, 2017, the Company expects that Common Stock equal to approximately 101 percent of the PSU Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for targets will be earned. The market price on the date of grant for the PSUs was $82.12 per share. At the end of the certain items as further described in the Performance Share Award Agreement. certain items as further described in the Performance Share Award Agreement. measurement period, the PSUs convert into RSUs, at the determined rate mentioned above, that are entitled to dividends but do not have voting rights. The Company is recognizing stock-based compensation expense pro-rata over the vesting As of December 31, 2017, the Company expects that Common Stock equal to approximately 101 percent of the PSU As of December 31, 2017, the Company expects that Common Stock equal to approximately 101 percent of the PSU term of the PSUs/RSUs. For further discussion on participating securities refer to Note 3. "Earnings Per Share". targets will be earned. The market price on the date of grant for the PSUs was $82.12 per share. At the end of the targets will be earned. The market price on the date of grant for the PSUs was $82.12 per share. At the end of the measurement period, the PSUs convert into RSUs, at the determined rate mentioned above, that are entitled to dividends measurement period, the PSUs convert into RSUs, at the determined rate mentioned above, that are entitled to dividends For the year ended December 31, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of but do not have voting rights. The Company is recognizing stock-based compensation expense pro-rata over the vesting but do not have voting rights. The Company is recognizing stock-based compensation expense pro-rata over the vesting Directors and 866 RSUs to employees. The weighted-average grant date fair value of such awards was $76.78 per share term of the PSUs/RSUs. For further discussion on participating securities refer to Note 3. "Earnings Per Share". term of the PSUs/RSUs. For further discussion on participating securities refer to Note 3. "Earnings Per Share". and the awards vest one year from the date of grant for the Board of Directors grants and three years from the date of grant for the employee grants. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not For the year ended December 31, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of For the year ended December 31, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of have voting rights and are forfeited in the event the holder is no longer an employee or member of the Board of Directors Directors and 866 RSUs to employees. The weighted-average grant date fair value of such awards was $76.78 per share Directors and 866 RSUs to employees. The weighted-average grant date fair value of such awards was $76.78 per share on the vesting date. and the awards vest one year from the date of grant for the Board of Directors grants and three years from the date of grant and the awards vest one year from the date of grant for the Board of Directors grants and three years from the date of grant for the employee grants. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not for the employee grants. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not F-39 have voting rights and are forfeited in the event the holder is no longer an employee or member of the Board of Directors have voting rights and are forfeited in the event the holder is no longer an employee or member of the Board of Directors on the vesting date. on the vesting date. F-39 F-39 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) The following table summarizes the activity of the Company's unvested stock-based awards (other than stock options) for The following table summarizes the activity of the Company's unvested stock-based awards (other than stock options) for the years ended December 31, 2017, 2016 and 2015: the years ended December 31, 2017, 2016 and 2015: Outstanding — December 31, 2014 Outstanding — December 31, 2014 Shares granted (a) Shares granted (a) Shares vested Shares vested Performance Shares vested Performance Shares vested Shares expired or cancelled Shares expired or cancelled Outstanding — December 31, 2015 Outstanding — December 31, 2015 Shares granted (a) Shares granted (a) Shares vested Shares vested Performance Shares vested Performance Shares vested Shares expired or cancelled Shares expired or cancelled Outstanding — December 31, 2016 Outstanding — December 31, 2016 Shares granted (a) Shares granted (a) Shares vested Shares vested Performance Shares vested Performance Shares vested Shares expired or cancelled Shares expired or cancelled Outstanding — December 31, 2017 (b) Outstanding — December 31, 2017 (b) ___________________________ ___________________________ Weighted-Average Weighted-Average Grant Date Grant Date Fair Value Fair Value RSUs RSUs PSUs PSUs Weighted-Average Weighted-Average Grant Date Grant Date Fair Value Fair Value 105,294 105,294 $ $ 13,415 $ $ 13,415 (105,564) $ (105,564) $ $ $ 107,219 107,219 (1,526) $ (1,526) $ $ $ 118,838 118,838 10,047 $ $ 10,047 (110,749) $ (110,749) $ $ $ 62,874 62,874 (291) $ (291) $ $ $ 80,719 80,719 10,318 $ $ 10,318 (72,451) $ (72,451) $ $ $ 73,838 73,838 (3,625) $ (3,625) $ $ $ 88,799 88,799 31.15 31.15 61.41 61.41 32.12 32.12 40.65 40.65 51.14 51.14 43.29 43.29 68.25 68.25 42.96 42.96 53.63 53.63 40.65 40.65 54.91 54.91 76.84 76.84 55.26 55.26 52.11 52.11 50.48 50.48 53.33 53.33 58,270 58,270 $ $ 45,060 45,060 $ $ (810) $ (810) $ (58,270) $ (58,270) $ (1,200) $ (1,200) $ $ $ 43,050 43,050 54,364 54,364 $ $ — $ — $ (43,050) $ (43,050) $ (858) $ (858) $ $ $ 53,506 53,506 41,883 41,883 $ $ — $ — $ (53,506) $ (53,506) $ (506) $ (506) $ $ $ 41,377 41,377 74.79 74.79 78.32 78.32 78.32 78.32 74.79 74.79 78.32 78.32 78.32 78.32 73.82 73.82 — — 78.32 78.32 75.98 75.98 73.79 73.79 81.85 81.85 — — 73.79 73.79 81.85 81.85 81.85 81.85 (a) For the years ended December 31, 2017, 2016 and 2015, includes 226 RSUs, 312 RSUs and 495 RSUs, (a) For the years ended December 31, 2017, 2016 and 2015, includes 226 RSUs, 312 RSUs and 495 RSUs, respectively, that were granted in lieu of cash dividends. Such dividends-in-kind vest concurrently with the respectively, that were granted in lieu of cash dividends. Such dividends-in-kind vest concurrently with the underlying RSUs. underlying RSUs. (b) The aggregate pre-tax intrinsic value of outstanding RSUs as of December 31, 2017 was $8.0 million. (b) The aggregate pre-tax intrinsic value of outstanding RSUs as of December 31, 2017 was $8.0 million. The aggregate pre-tax intrinsic value of restricted stock and RSUs that vested for the years ended December 31, 2017, 2016 The aggregate pre-tax intrinsic value of restricted stock and RSUs that vested for the years ended December 31, 2017, 2016 and 2015 was $6.3 million, $9.3 million and $6.6 million, respectively. and 2015 was $6.3 million, $9.3 million and $6.6 million, respectively. Excess Tax Benefits Excess Tax Benefits Excess tax benefits represent the difference between the tax deduction the Company will receive on its tax return for Excess tax benefits represent the difference between the tax deduction the Company will receive on its tax return for compensation recognized by employees upon the vesting or exercise of stock-based awards and the tax benefit recognized compensation recognized by employees upon the vesting or exercise of stock-based awards and the tax benefit recognized for the grant date fair value of such awards. For the years ended December 31, 2017, 2016 and 2015, the Company for the grant date fair value of such awards. For the years ended December 31, 2017, 2016 and 2015, the Company recognized excess tax benefits related to the exercise or vesting of stock-based awards of $4.5 million, $3.1 million and recognized excess tax benefits related to the exercise or vesting of stock-based awards of $4.5 million, $3.1 million and $2.6 million, respectively. $2.6 million, respectively. Note 10. Stockholders' Equity Note 10. Stockholders' Equity Common Stock Common Stock The Company has authorized 100 million shares of Common Stock. Holders of the Company's Common Stock are entitled The Company has authorized 100 million shares of Common Stock. Holders of the Company's Common Stock are entitled to one vote per share. to one vote per share. F-40 F-40 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) In May 2017, the Company's Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the "2017 Stock Purchase Plan"). Purchases by the Company under the 2017 Stock Purchase Plan would be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. The 2017 Stock Purchase Plan does not require the Company to purchase any specific number of shares and may be suspended or discontinued at any time. The 2017 Stock Purchase Plan is expected to be funded using cash on hand or borrowings under the Company's bank credit facility. The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2017 (the “2016 Stock Purchase Plan”) and May 2016 (the “2015 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans: 2017 Stock Purchase Plan 2016 Stock Purchase Plan 2015 Stock Purchase Plan 2014 Stock Purchase Plan Year Ended December 31, 2017 2016 2015 Shares $ Shares $ Shares $ — $ — 85,354 $ 6.8 91,542 93,600 $ $ 7.4 5.2 42,100 $ 2.4 60,900 $ 3.5 As of December 31, 2017, under the terms of the Third Amended and Restated Credit Agreement and the 2021 Senior Notes, the Company has limitations on its ability to repurchase shares of its Common Stock, as further discussed in Note 7, "Debt." For the years ended December 31, 2017, 2016 and 2015, the Company acquired 28,000 shares, 46,000 shares and 40,000 shares of Common Stock, respectively, at a cost of $2.5 million, $3.8 million and $2.5 million, respectively, for shares surrendered by employees to pay taxes due on vested restricted stock awards and SARs exercised. Each share of Common Stock contains a preferred stock purchase right that is associated with the share. These preferred stock purchase rights are transferred only with shares of Common Stock. The preferred stock purchase rights become exercisable and separately certificated only upon a "Rights Distribution Date" as that term is defined in the stockholder rights agreement adopted by the Company at the time of the Spin-Off. In general, a Rights Distribution Date occurs 10 business days following either of these events: (i) a person or group has acquired or obtained the right to acquire beneficial ownership of 15 percent or more of the outstanding shares of the Company's Common Stock then outstanding or (ii) a tender offer or exchange offer is commenced that would result in a person or group acquiring 15 percent or more of the outstanding shares of Common Stock then outstanding. F o r m 1 0 - K Preferred Stock The Company has authorized 20 million shares of $0.01 par value preferred stock. The preferred stock may be issued in one or more series and with such designations and preferences for each series as shall be stated in the resolutions providing for the designation and issue of each such series adopted by the Board of Directors of the Company. The Board of Directors is authorized by the Company's articles of incorporation to determine the voting, dividend, redemption and liquidation preferences pertaining to each such series. No shares of preferred stock have been issued by the Company. Other Comprehensive Income (Loss) Comprehensive income (loss) includes, in addition to net income (loss), gains and losses recorded directly into stockholders' equity on the consolidated balance sheet. These gains and losses are referred to as other comprehensive F-41 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) income items. Accumulated other comprehensive income (loss) consists of foreign currency translation gains and (losses), deferred gains and (losses) on "available-for-sale" securities, and adjustments related to pensions and other post-retirement benefits. The Company does not provide income taxes for foreign currency translation adjustments related to indefinite investments in foreign subsidiaries. The components of accumulated other comprehensive income (loss), net of applicable income taxes are as follows: December 31, 2017 2016 Unrealized foreign currency translation losses, net of income tax benefit of $0.4 and $0.4, respectively $ (7.5) $ (27.5) Unrealized loss on "available-for-sale" securities, net of income tax benefit of $0.1 million (0.3) — Net loss from pension and other postretirement benefit liabilities, net of income tax benefits of $28.8 million and $36.8 million, respectively (a) Accumulated other comprehensive loss _________________ (86.3) (94.1) $ (64.5) (92.0) $ (a) In conjunction with the Tax Act, The Company early adopted ASU 2018-02 in the fourth quarter of 2017 and accordingly reclassified $10.9 million related to stranded tax effects resulting from the Tax Act from AOCI to retained earnings. The Company’s policy is to release stranded tax effects for “available-for-sale” securities using the portfolio approach. The following table presents changes in comprehensive income: Year Ended December 31, Pretax Amount 2017 Tax Effect Net Amount Pretax Amount 2016 Tax Effect Net Amount Pretax Amount 2015 Tax Effect Net Amount Unrealized foreign currency translation gains (losses) Unrealized loss on "available- for-sale" securities Adjustment to pension and other benefit liabilities Other comprehensive income (loss) $ 20.0 $ — $ 20.0 $ (7.1) $ 0.4 $ (6.7) $ (15.0) $ — $ (15.0) (0.4) 0.1 (0.3) — — — — — — (13.8) 2.9 (10.9) (10.0) 3.0 (7.0) 6.3 (1.2) 5.1 $ 5.8 $ 3.0 $ 8.8 $ (17.1) $ 3.4 $ (13.7) $ (8.7) $ (1.2) $ (9.9) For the years ended December 31, 2017, 2016 and 2015, the Company reclassified $5.9 million, $7.2 million and $7.1 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the Consolidated Statements of Operations. For the years ended December 31, 2017, 2016 and 2015, the Company recognized an income tax benefit of $2.3 million, $2.8 million and $2.7 million, respectively, related to such reclassifications classified as Provision for income taxes on the Consolidated Statements of Operations. For the year ended December 31, 2017 and 2016, the Company reclassified $0.6 million and $0.8 million, respectively, of costs from accumulated other comprehensive income to pension plan settlement charge on the Consolidated Statements of Operations. For the year ended December 31, 2015, the Company reclassified $5.5 million of costs from accumulated other comprehensive income to loss from discontinued operations on the Consolidated Statements of Operations. For both of the F-42 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) years ended December 31, 2017 and 2016, the Company recognized an income tax benefit of $0.2 million related to such years ended December 31, 2017 and 2016, the Company recognized an income tax benefit of $0.2 million related to such reclassifications classified as Provision for income taxes on the Consolidated Statements of Operations. For the year ended reclassifications classified as Provision for income taxes on the Consolidated Statements of Operations. For the year ended December 31, 2015, the Company recognized an income tax benefit of $2.1 million, related to reclassifications classified December 31, 2015, the Company recognized an income tax benefit of $2.1 million, related to reclassifications classified as Loss from discontinued operations, net of income taxes on the Consolidated Statements of Operations. as Loss from discontinued operations, net of income taxes on the Consolidated Statements of Operations. Note 11. Commitments Note 11. Commitments Leases Leases The future minimum obligations under operating leases having a noncancelable term in excess of one year as of December 31, 2017, are as follows: The future minimum obligations under operating leases having a noncancelable term in excess of one year as of December 31, 2017, are as follows: F o r m 1 0 - K 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 Thereafter Thereafter Future minimum lease obligations Future minimum lease obligations $ $ 4.0 4.0 2.6 2.6 2.1 2.1 1.8 1.8 1.6 1.6 3.7 3.7 $ $ 15.8 15.8 For the years ended December 31, 2017, 2016 and 2015 rent expense under operating leases was $6.8 million, $6.4 million and $5.4 million, respectively. For the years ended December 31, 2017, 2016 and 2015 rent expense under operating leases was $6.8 million, $6.4 million and $5.4 million, respectively. Purchase Commitments Purchase Commitments The Company has certain minimum purchase commitments that extend beyond December 31, 2017. Commitments under The Company has certain minimum purchase commitments that extend beyond December 31, 2017. Commitments under these contracts are approximately $12.3 million and $6.1 million for the years ended December 31, 2018 and 2019, these contracts are approximately $12.3 million and $6.1 million for the years ended December 31, 2018 and 2019, respectively. Such purchase commitments for the year ended December 31, 2018 are primarily for coal and corn starch respectively. Such purchase commitments for the year ended December 31, 2018 are primarily for coal and corn starch contracts. Although the Company is primarily liable for payments on the above-mentioned leases and purchase contracts. Although the Company is primarily liable for payments on the above-mentioned leases and purchase commitments, management believes exposure to losses, if any, under these arrangements is not material. commitments, management believes exposure to losses, if any, under these arrangements is not material. Note 12. Contingencies and Legal Matters Note 12. Contingencies and Legal Matters Litigation Litigation The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or liquidity of the Company. on the consolidated financial condition, results of operations or liquidity of the Company. Income Taxes Income Taxes The Company periodically undergoes examination by the Internal Revenue Service (the "IRS") as well as various state and The Company periodically undergoes examination by the Internal Revenue Service (the "IRS") as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on F-43 F-43 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority. foreign tax authority. Environmental, Health and Safety Matters Environmental, Health and Safety Matters The Company is subject to federal, state and local laws, regulations and ordinances relating to various environmental, The Company is subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters. The Company is in compliance with, or is taking actions designed to ensure compliance with, health and safety matters. The Company is in compliance with, or is taking actions designed to ensure compliance with, these laws, regulations and ordinances. However, the nature of the Company's business exposes it to the risk of claims with these laws, regulations and ordinances. However, the nature of the Company's business exposes it to the risk of claims with respect to environmental, health and safety matters, and there can be no assurance that material costs or liabilities will not respect to environmental, health and safety matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims. Except for certain orders issued by environmental, health and safety regulatory be incurred in connection with such claims. Except for certain orders issued by environmental, health and safety regulatory agencies, with which management believes the Company is in compliance and which management believes are immaterial agencies, with which management believes the Company is in compliance and which management believes are immaterial to the results of operations of the Company's business, Neenah is not currently named as a party in any judicial or to the results of operations of the Company's business, Neenah is not currently named as a party in any judicial or administrative proceeding relating to environmental, health and safety matters. administrative proceeding relating to environmental, health and safety matters. While the Company has incurred in the past several years, and will continue to incur, capital and operating expenditures in While the Company has incurred in the past several years, and will continue to incur, capital and operating expenditures in order to comply with environmental, health and safety laws, regulations and ordinances, management believes that the order to comply with environmental, health and safety laws, regulations and ordinances, management believes that the Company's future cost of compliance with environmental, health and safety laws, regulations and ordinances, and its Company's future cost of compliance with environmental, health and safety laws, regulations and ordinances, and its exposure to liability for environmental, health and safety claims will not have a material effect on its financial condition, exposure to liability for environmental, health and safety claims will not have a material effect on its financial condition, results of operations or liquidity. However, future events, such as changes in existing laws and regulations or contamination results of operations or liquidity. However, future events, such as changes in existing laws and regulations or contamination of sites owned, operated or used for waste disposal by the Company (including currently unknown contamination and of sites owned, operated or used for waste disposal by the Company (including currently unknown contamination and contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on the Company's financial condition, results of operations or liquidity. costs which could have a material effect on the Company's financial condition, results of operations or liquidity. The Company incurs capital expenditures necessary to meet legal requirements and otherwise relating to the protection of The Company incurs capital expenditures necessary to meet legal requirements and otherwise relating to the protection of the environment at its facilities in the United States and internationally. The Company's anticipated capital expenditures for the environment at its facilities in the United States and internationally. The Company's anticipated capital expenditures for environmental projects are not expected to have a material effect on the Company's financial condition, results of environmental projects are not expected to have a material effect on the Company's financial condition, results of operations or liquidity. operations or liquidity. Employees and Labor Relations Employees and Labor Relations As of December 31, 2017, the Company had approximately 2,612 regular full-time employees of whom 1,174 hourly and As of December 31, 2017, the Company had approximately 2,612 regular full-time employees of whom 1,174 hourly and 578 salaried employees were located in the United States and 431 hourly and 429 salaried employees were located in 578 salaried employees were located in the United States and 431 hourly and 429 salaried employees were located in Europe. All of the Company's U.S. hourly union employees are represented by the United Steelworkers Union (the Europe. All of the Company's U.S. hourly union employees are represented by the United Steelworkers Union (the "USW"). In Netherlands, most of our employees are eligible to be represented by the Christelijke Nationale Vakbond "USW"). In Netherlands, most of our employees are eligible to be represented by the Christelijke Nationale Vakbond ("CNV") and the Federatie Nederlandse Vakvereniging ("FNV"). Under Dutch law the union membership is voluntary and ("CNV") and the Federatie Nederlandse Vakvereniging ("FNV"). Under Dutch law the union membership is voluntary and does not need to be disclosed to the Company. The collective bargaining arrangement with CNV and FNV will expire in does not need to be disclosed to the Company. The collective bargaining arrangement with CNV and FNV will expire in April 2018. Hourly union employees at the Company's Bolton, England manufacturing facility are represented by Unite the April 2018. Hourly union employees at the Company's Bolton, England manufacturing facility are represented by Unite the Union ("UNITE"). Union ("UNITE"). The following table shows the status of the Company's bargaining agreements as of December 31, 2017. The following table shows the status of the Company's bargaining agreements as of December 31, 2017. Contract Expiration Date Contract Expiration Date January 2018 (c) January 2018 (c) June 2018 June 2018 July 2018 July 2018 February 2019 February 2019 May 2019 May 2019 August 2021 August 2021 November 2021 November 2021 _______________________ _______________________ F-44 F-44 Location Location Whiting, WI (b) Whiting, WI (b) Neenah, WI (b) Neenah, WI (b) Munising, MI (b) Munising, MI (b) Neenah Germany Neenah Germany Appleton, WI (b) Appleton, WI (b) Brattleboro, VT Brattleboro, VT Lowville, NY Lowville, NY Union Union USW USW USW USW USW USW IG BCE IG BCE USW USW USW USW USW USW Number of Number of Employees Employees 201 201 264 264 203 203 (a) (a) 103 103 94 94 108 108 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority. Environmental, Health and Safety Matters The Company is subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters. The Company is in compliance with, or is taking actions designed to ensure compliance with, these laws, regulations and ordinances. However, the nature of the Company's business exposes it to the risk of claims with respect to environmental, health and safety matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims. Except for certain orders issued by environmental, health and safety regulatory agencies, with which management believes the Company is in compliance and which management believes are immaterial to the results of operations of the Company's business, Neenah is not currently named as a party in any judicial or administrative proceeding relating to environmental, health and safety matters. While the Company has incurred in the past several years, and will continue to incur, capital and operating expenditures in order to comply with environmental, health and safety laws, regulations and ordinances, management believes that the Company's future cost of compliance with environmental, health and safety laws, regulations and ordinances, and its exposure to liability for environmental, health and safety claims will not have a material effect on its financial condition, results of operations or liquidity. However, future events, such as changes in existing laws and regulations or contamination of sites owned, operated or used for waste disposal by the Company (including currently unknown contamination and contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on the Company's financial condition, results of operations or liquidity. The Company incurs capital expenditures necessary to meet legal requirements and otherwise relating to the protection of the environment at its facilities in the United States and internationally. The Company's anticipated capital expenditures for environmental projects are not expected to have a material effect on the Company's financial condition, results of operations or liquidity. Employees and Labor Relations As of December 31, 2017, the Company had approximately 2,612 regular full-time employees of whom 1,174 hourly and 578 salaried employees were located in the United States and 431 hourly and 429 salaried employees were located in Europe. All of the Company's U.S. hourly union employees are represented by the United Steelworkers Union (the "USW"). In Netherlands, most of our employees are eligible to be represented by the Christelijke Nationale Vakbond ("CNV") and the Federatie Nederlandse Vakvereniging ("FNV"). Under Dutch law the union membership is voluntary and NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) does not need to be disclosed to the Company. The collective bargaining arrangement with CNV and FNV will expire in April 2018. Hourly union employees at the Company's Bolton, England manufacturing facility are represented by Unite the (Dollars in millions, except as noted) (Dollars in millions, except as noted) Union ("UNITE"). NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES The following table shows the status of the Company's bargaining agreements as of December 31, 2017. Union Location Until a new contract is signed, the terms of the previous contract still apply. Until a new contract is signed, the terms of the previous contract still apply. The current agreement on pension matters will remain in effect until September 2019. The current agreement on pension matters will remain in effect until September 2019. (a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, (a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined. the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined. (b) On pension matters, the Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW. (b) On pension matters, the Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW. NEENAH, INC. AND SUBSIDIARIES (c) The Company is currently in negotiations with the USW and a new contract is expected to be signed in 2018. (c) The Company is currently in negotiations with the USW and a new contract is expected to be signed in 2018. USW USW USW IG BCE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) USW USW USW Contract Expiration Date January 2018 (c) June 2018 July 2018 February 2019 May 2019 August 2021 (Dollars in millions, except as noted) November 2021 Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the _______________________ "IG BCE"). In June 2017, the IG BCE and a national trade association representing all employers in the industry signed a "IG BCE"). In June 2017, the IG BCE and a national trade association representing all employers in the industry signed a F-44 collective bargaining agreement covering union employees of Neenah Germany that expires in February 2019. Under collective bargaining agreement covering union employees of Neenah Germany that expires in February 2019. Under (a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined. employees covered by the collective bargaining agreement with the IG BCE that expires in February 2019 cannot be employees covered by the collective bargaining agreement with the IG BCE that expires in February 2019 cannot be determined. As of December 31, 2017, 668 employees are covered under collective bargaining agreements that have determined. As of December 31, 2017, 668 employees are covered under collective bargaining agreements that have already expired or will expire in the next 12 months, with the exception of the employees covered by the collective already expired or will expire in the next 12 months, with the exception of the employees covered by the collective bargaining arrangement with the IG BCE. bargaining arrangement with the IG BCE. Whiting, WI (b) Neenah, WI (b) Munising, MI (b) Neenah Germany Appleton, WI (b) Brattleboro, VT Lowville, NY (b) On pension matters, the Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW. Number of Employees 201 264 203 (a) 103 94 108 The current agreement on pension matters will remain in effect until September 2019. (c) The Company is currently in negotiations with the USW and a new contract is expected to be signed in 2018. Until a new contract is signed, the terms of the previous contract still apply. F o r m 1 0 - K Note 13. Discontinued Operations Note 13. Discontinued Operations Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the Discontinued Operations Discontinued Operations "IG BCE"). In June 2017, the IG BCE and a national trade association representing all employers in the industry signed a On October 31, 2015, the Company sold the Lahnstein Mill to a privately-owned enterprise specializing in equity holdings On October 31, 2015, the Company sold the Lahnstein Mill to a privately-owned enterprise specializing in equity holdings collective bargaining agreement covering union employees of Neenah Germany that expires in February 2019. Under in German medium-sized companies, for net cash proceeds of approximately $5.4 million. The buyer acquired all the assets in German medium-sized companies, for net cash proceeds of approximately $5.4 million. The buyer acquired all the assets German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of and liabilities of the Lahnstein Mill, including pension and related liabilities of approximately $21 million. The Lahnstein and liabilities of the Lahnstein Mill, including pension and related liabilities of approximately $21 million. The Lahnstein employees covered by the collective bargaining agreement with the IG BCE that expires in February 2019 cannot be Mill, which had annual sales of approximately €50 million, had been operating as a stand-alone business, manufacturing Mill, which had annual sales of approximately €50 million, had been operating as a stand-alone business, manufacturing determined. As of December 31, 2017, 668 employees are covered under collective bargaining agreements that have non-woven wallcoverings and various other specialty papers. The sale focuses the Company's portfolio on targeted growth non-woven wallcoverings and various other specialty papers. The sale focuses the Company's portfolio on targeted growth already expired or will expire in the next 12 months, with the exception of the employees covered by the collective markets such as filtration, premium fine papers and packaging and other performance materials. markets such as filtration, premium fine papers and packaging and other performance materials. bargaining arrangement with the IG BCE. Upon reaching an agreement for the sale of the Lahnstein Mill, the Company compared the carrying value of the Lahnstein Upon reaching an agreement for the sale of the Lahnstein Mill, the Company compared the carrying value of the Lahnstein Mill assets to the fair value of such assets reflected in the sales agreement. As a result, the Company recognized an Mill assets to the fair value of such assets reflected in the sales agreement. As a result, the Company recognized an impairment charge of $12.0 million to reduce the carrying value of the Lahnstein Mill assets to fair value. In addition, the impairment charge of $12.0 million to reduce the carrying value of the Lahnstein Mill assets to fair value. In addition, the Note 13. Discontinued Operations Company recognized approximately $1.7 million of transaction costs related to the sale in 2015. For the year ended Company recognized approximately $1.7 million of transaction costs related to the sale in 2015. For the year ended December 31, 2016, discontinued operations reported on the consolidated statements of operations includes an additional December 31, 2016, discontinued operations reported on the consolidated statements of operations includes an additional Discontinued Operations loss on sale arising from final adjustments to the transaction price. loss on sale arising from final adjustments to the transaction price. On October 31, 2015, the Company sold the Lahnstein Mill to a privately-owned enterprise specializing in equity holdings in German medium-sized companies, for net cash proceeds of approximately $5.4 million. The buyer acquired all the assets and liabilities of the Lahnstein Mill, including pension and related liabilities of approximately $21 million. The Lahnstein Mill, which had annual sales of approximately €50 million, had been operating as a stand-alone business, manufacturing non-woven wallcoverings and various other specialty papers. The sale focuses the Company's portfolio on targeted growth markets such as filtration, premium fine papers and packaging and other performance materials. Upon reaching an agreement for the sale of the Lahnstein Mill, the Company compared the carrying value of the Lahnstein Mill assets to the fair value of such assets reflected in the sales agreement. As a result, the Company recognized an impairment charge of $12.0 million to reduce the carrying value of the Lahnstein Mill assets to fair value. In addition, the Company recognized approximately $1.7 million of transaction costs related to the sale in 2015. For the year ended December 31, 2016, discontinued operations reported on the consolidated statements of operations includes an additional loss on sale arising from final adjustments to the transaction price. F-45 F-45 F-45 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) The following table presents selected financial information for discontinued operations: For the Year ended December 31, 2016 2015 2017 Net sales Cost of products sold Gross Profit Selling, general and administrative expenses Restructuring costs Other income — net Income (Loss) From Discontinued Operations Before Income Taxes Loss on sale (a) Income (loss) before income taxes Income tax provision (benefit) (a) Income (loss) from discontinued operations _______________________ $ $ — $ — — — — — — — — — — $ — $ — — — — — — (0.6) (0.6) (0.2) (0.4) $ 43.2 39.7 3.5 3.5 0.1 (0.3) 0.2 (13.6) (13.4) (4.0) (9.4) (a) For 2015, this amount includes a net curtailment gain related to the divesture of the pension plan of $15.8 million, including a $5.5 million write-off of deferred actuarial losses. The following table presents selected cash flow information for discontinued operations for the year ended December 31, 2015: For the Year ended December 31, 2016 2015 2017 Depreciation and amortization Capital expenditures $ $ — $ — $ — $ — $ 2.7 0.6 Note 14. Business Segment and Geographic Information On July 1, 2015, the Company reorganized its internal management structure and, accordingly, addressed its segment reporting structure. As a result of this reorganization, the Other operating segment (composed of the non-premium Index, Tag and Vellum Bristol product lines acquired as part of the purchase of the Wausau brands) was combined with the Fine Paper and Packaging operating segment to reflect the manner in which this business is managed. Segment information for prior periods has been restated to conform to the current period presentation. In addition, as part of the FiberMark acquisition, the Company acquired certain product lines composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. Due to the dissimilar nature of these products, management decided that they would not be managed as part of either the existing Fine Paper and Packaging or Technical Products businesses. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment. The Company's reportable operating segments now consist of Technical Products, Fine Paper and Packaging and Other. The Technical Products segment is an aggregation of the Company's filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods. F-46 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) The technical products business is an international producer of fiber-formed, coated and/or saturated specialized media that The technical products business is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media ("Filtration"), tape and delivers high performance benefits to customers. Included in this segment are filtration media ("Filtration"), tape and abrasives backings products ("Backings"), digital image transfer, durable label, and other specialty substrate products abrasives backings products ("Backings"), digital image transfer, durable label, and other specialty substrate products ("Specialty"). The following table presents sales by product category for the technical products business: ("Specialty"). The following table presents sales by product category for the technical products business: Filtration Filtration Backings Backings Specialty Specialty Total Total Year Ended December 31, Year Ended December 31, 2017 2017 2016 2016 2015 2015 44% 44% 32% 32% 24% 24% 100% 100% 42% 42% 31% 31% 27% 27% 100% 100% 45% 45% 30% 30% 25% 25% 100% 100% The fine paper and packaging business is a leading supplier of premium printing and other high end specialty papers The fine paper and packaging business is a leading supplier of premium printing and other high end specialty papers ("Graphic Imaging"), premium packaging ("Packaging") and specialty office papers ("Filing/Office") primarily in North ("Graphic Imaging"), premium packaging ("Packaging") and specialty office papers ("Filing/Office") primarily in North America. The following table presents sales by product category for the fine paper and packaging business: America. The following table presents sales by product category for the fine paper and packaging business: Graphic Imaging Graphic Imaging Packaging Packaging Filing/Office Filing/Office Total Total Year Ended December 31, Year Ended December 31, 2017 2017 2016 2016 2015 2015 80% 80% 16% 16% 4% 4% 81% 81% 14% 14% 5% 5% 80% 80% 15% 15% 5% 5% 100% 100% 100% 100% 100% 100% F o r m 1 0 - K Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs. The accounting policies of the reportable operating segments are the same as those described Unallocated corporate costs. The accounting policies of the reportable operating segments are the same as those described in Note 2, "Summary of Significant Accounting Policies." in Note 2, "Summary of Significant Accounting Policies." F-47 F-47 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Business Segments Net sales Technical Products Fine Paper and Packaging Other Consolidated Operating income (loss) Technical Products (a) Fine Paper and Packaging (b) Other (c) Unallocated corporate costs (d) Consolidated _______________________ Year Ended December 31, 2017 2016 2015 $ 502.1 $ 466.4 $ 455.3 22.5 452.1 23.0 429.2 442.7 15.8 $ 979.9 $ 941.5 $ 887.7 Year Ended December 31, 2017 2016 2015 $ 55.3 $ 65.6 $ 54.1 69.5 (0.4) (20.1) 104.3 $ 70.7 (1.1) (21.1) 114.1 $ 67.3 (2.0) (18.0) 101.4 $ (a) Operating income for the year ended December 31, 2016 included integration costs of $1.4 million. Operating income for the year ended December 31, 2015 included acquisition, integration and restructuring costs of $1.7 million. (b) Operating income for the year ended December 31, 2017 included a representations and warranties insurance settlement of $2.9 million. Operating income for the years ended December 31, 2016 and 2015 included acquisition and integration costs of $1.8 million and $1.5 million, respectively. (c) Operating income for the year ended December 31, 2017 included a representations and warranties insurance settlement of $0.3 million. Operating income for the years ended December 31, 2016 and 2015 included acquisition and integration costs of $1.1 million and $2.4 million, respectively. (d) Unallocated corporate costs for the year ended December 31, 2017 included acquisition and integration costs of $1.3 million and $0.6 million from pension plan and SERP settlement costs. December 31, 2016 included $2.7 million of pre-operating costs related to conversion of a fine paper machine to filtration and $0.8 million for a pension plan settlement charge. December 31, 2015 included $0.8 million of costs related to this filtration project. Depreciation and amortization Technical Products Fine Paper and Packaging Other Corporate Total Continuing Operations Discontinued operations Consolidated F-48 Year Ended December 31, 2017 2016 2015 $ $ 19.4 11.0 1.2 1.7 33.3 — 18.1 11.1 1.3 1.5 32.0 — $ 16.5 9.8 0.6 1.9 28.8 2.7 $ 33.3 $ 32.0 $ 31.5 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Capital expenditures Technical Products Fine Paper and Packaging Other Corporate Total Continuing Operations Discontinued operations Consolidated Total Assets (a) Technical Products Fine Paper and Packaging Corporate and other (b) Total _______________________ Year Ended December 31, 2017 2016 2015 $ 28.6 12.5 1.1 0.5 42.7 — $ 57.9 $ 7.6 0.3 2.7 68.5 — 36.0 10.3 0.4 0.8 47.5 0.6 $ 42.7 $ 68.5 $ 48.1 December 31, 2017 2016 $ 613.0 $ 261.6 29.8 487.6 248.9 29.1 $ 904.4 $ 765.6 F o r m 1 0 - K (a) Segment identifiable assets are those that are directly used in the segments operations. (b) Corporate assets are primarily cash and income taxes. Geographic Information Net sales United States Europe Consolidated Year Ended December 31, 2017 2016 2015 $ $ 748.9 231.0 979.9 $ $ 727.6 213.9 941.5 $ $ 687.3 200.4 887.7 Net sales are attributed to geographic areas based on the physical location of the selling entities. F-49 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Long-Lived Assets United States Europe Total December 31, 2017 2016 $ $ 393.1 226.1 619.2 $ $ 377.4 151.9 529.3 Long-lived assets consist of property and equipment, deferred income taxes, goodwill, intangibles and other assets. Concentrations For the year ended December 31, 2017, sales to Veritiv and CNG each represented approximately 7 percent of consolidated net sales and approximately 15 percent of net sales of the fine paper and packaging business. For the years ended December 31, 2016 and 2015 sales to Veritiv represented approximately 8 percent and 10 percent, respectively, of consolidated net sales and approximately 15 percent and 20 percent, respectively, of net sales of the fine paper and packaging business. Except for certain specialty latex grades and specialty softwood pulp used by Technical Products, management is not aware of any significant concentration of business transacted with a particular supplier that could, if suddenly eliminated, have a material effect on its operations. Note 15. Supplemental Data Supplemental Statement of Operations Data Summary of Advertising and Research and Development Expenses Advertising expense Research and development expense _______________________ Year Ended December 31, 2017 2016 2015 $ $ 6.0 8.9 $ 6.2 9.4 6.8 6.8 (a) Advertising expense and research and development expense are recorded in selling, general and administrative expenses on the consolidated statements of operations. Supplemental Balance Sheet Data Summary of Accounts Receivable — net From customers Less allowance for doubtful accounts and sales discounts Total F-50 December 31, 2017 2016 $ 117.0 (1.3) $ 115.7 $ $ 98.0 (1.5) 96.5 NEENAH, INC. AND SUBSIDIARIES NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) (Dollars in millions, except as noted) Summary of Inventories Summary of Inventories Inventories by Major Class: Inventories by Major Class: Raw materials Raw materials Work in progress Work in progress Finished goods Finished goods Supplies and other Supplies and other Excess of FIFO over LIFO cost Excess of FIFO over LIFO cost Total Total December 31, December 31, 2017 2017 2016 2016 $ $ 36.2 36.2 $ $ 31.6 31.6 35.0 35.0 79.2 79.2 3.6 3.6 26.8 26.8 63.0 63.0 3.1 3.1 154.0 (10.5) 143.5 154.0 (10.5) $ 143.5 $ 124.5 124.5 (8.2) (8.2) 116.3 116.3 $ $ The FIFO value of inventories valued on the LIFO method was $120.1 million and $106.8 million at December 31, 2017 The FIFO value of inventories valued on the LIFO method was $120.1 million and $106.8 million at December 31, 2017 and 2016, respectively. For the year ended December 31, 2017 and 2016, income from continuing operations before and 2016, respectively. For the year ended December 31, 2017 and 2016, income from continuing operations before income taxes was reduced by less than $0.5 million and $0.1 million, respectively, due to a decrease in certain LIFO income taxes was reduced by less than $0.5 million and $0.1 million, respectively, due to a decrease in certain LIFO inventory quantities. inventory quantities. Summary of Prepaid and Other Current Assets Summary of Prepaid and Other Current Assets Prepaid and other current assets Spare parts Receivable for income taxes Total Prepaid and other current assets Spare parts Receivable for income taxes Total Summary of Property, Plant and Equipment — Net Summary of Property, Plant and Equipment — Net Land and land improvements Land and land improvements Buildings Buildings Machinery and equipment Machinery and equipment Construction in progress Construction in progress Less accumulated depreciation Less accumulated depreciation Net Property, Plant and Equipment Net Property, Plant and Equipment F-51 F-51 F o r m 1 0 - K December 31, December 31, 2017 2017 2016 2016 $ $ $ $ 11.3 11.3 6.9 6.9 3.3 3.3 21.5 21.5 $ $ $ $ 10.5 10.5 5.8 5.8 4.1 4.1 20.4 20.4 December 31, December 31, 2017 2017 2016 2016 $ $ 20.2 20.2 $ $ 18.3 18.3 157.7 157.7 650.8 650.8 21.8 21.8 850.5 850.5 425.3 425.3 126.1 126.1 597.5 597.5 13.7 13.7 755.6 755.6 391.0 391.0 $ $ 425.2 425.2 $ $ 364.6 364.6 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $28.3 million, $27.1 million and $24.8 million, respectively. Interest expense capitalized as part of the costs of capital projects was zero, $0.8 million and $0.2 million, respectively, for the years ended December 31, 2017, 2016 and 2015. Summary of Accrued Expenses Accrued salaries and employee benefits Amounts due to customers Accrued interest Accrued income taxes Other Total Summary of Noncurrent Employee Benefits Pension benefits Post-employment benefits other than pensions (a) Total _______________________ December 31, 2017 2016 $ 29.6 $ 26.3 7.2 1.3 4.2 15.2 57.5 $ 7.3 1.3 2.0 14.3 51.2 $ December 31, 2017 2016 $ 59.8 40.5 $ 100.3 $ $ 49.0 37.7 86.7 (a) Includes $1.8 million of SRCP benefits as of December 31, 2017 and $1.3 million of SRCP benefits as of December 31, 2016. Supplemental Cash Flow Data Supplemental Disclosure of Cash Flow Information Cash paid during the year for interest, net of interest expense capitalized $ 11.3 $ Cash paid during the year for income taxes, net of refunds Non-cash investing activities: Liability for equipment acquired 7.6 5.4 10.0 15.0 $ 10.6 16.2 11.1 6.6 Year Ended December 31, 2017 2016 2015 F-52 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Net cash provided by (used in) changes in operating working capital, net of effect of acquisitions Accounts receivable Inventories Income taxes receivable/payable Prepaid and other current assets Accounts payable Accrued expenses Other Total Note 16. Unaudited Quarterly Data Year Ended December 31, 2017 2016 2015 $ (10.2) $ (11.7) 4.5 (0.4) 10.6 (4.2) (0.4) $ (11.8) $ 1.5 $ 4.3 (1.5) — (2.7) (2.8) — (1.2) $ (5.2) 7.7 1.0 (4.8) (0.5) 3.2 0.4 1.8 Net Sales Gross Profit Operating Income Income From Continuing Operations Earnings Per Common Share From Continuing Operations: Basic Diluted _______________________ 2017 Quarters First Second (a) Third (b) Fourth (c) Year $ 242.1 $ 248.7 $ 245.1 $ 244.0 $ 52.0 27.0 17.6 53.6 29.2 25.0 48.0 29.0 18.8 45.1 19.1 18.9 979.9 198.7 104.3 80.3 F o r m 1 0 - K $ $ 1.04 1.03 $ $ 1.47 1.46 $ $ 1.11 1.10 $ $ 1.11 1.10 $ $ 4.74 4.68 (a) Income from continuing operations includes a prior year tax adjustment of $4.1 million related to the Company's assertion of indefinite reinvestment of undistributed earnings of foreign subsidiaries. (b) Includes proceeds of a representations and warranties insurance settlement related to the FiberMark acquisition of $3.2 million, less acquisition costs of $0.7 million and SERP settlement charges of $0.2 million. (c) Includes acquisition/integration costs of $0.6 million and pension/SERP settlement charges of $0.4 million. Also, income from continuing operations includes net tax benefits of $5.9 million, primarily from the Tax Act. F-53 NEENAH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in millions, except as noted) Net Sales Gross Profit Operating Income Income From Continuing Operations Earnings Per Common Share From Continuing Operations: Basic Diluted _______________________ (d) Includes integration/restructuring costs of $7.0 million. (e) Includes a pension plan settlement charge of $0.8 million. 2016 Quarters First Second Third Fourth (e) Year (d)(e) $ 242.1 $ 246.0 $ 232.9 $ 220.5 $ 58.8 31.4 19.2 60.0 33.9 21.4 49.2 26.9 16.4 46.5 21.9 16.4 941.5 214.5 114.1 73.4 $ 1.13 $ 1.26 $ 0.97 $ 1.11 $ 1.24 $ 0.95 $ $ 0.97 0.95 $ $ 4.33 4.26 F-54 SCHEDULE II NEENAH, INC. AND SUBSIDIARIES SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS (Dollars in millions) Description December 31, 2017 Allowances deducted from assets to which they apply Allowance for doubtful accounts $ Allowance for sales discounts Valuation allowance — deferred income taxes December 31, 2016 Allowances deducted from assets to which they apply Allowance for doubtful accounts $ Allowance for sales discounts Valuation allowance — deferred income taxes December 31, 2015 Allowances deducted from assets to which they apply Allowance for doubtful accounts $ Allowance for sales discounts Valuation allowance — deferred income taxes Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Write-offs and Reclassifications Balance at End of Period $ $ $ 1.0 0.5 3.5 1.1 0.6 3.0 0.9 0.6 — 0.2 — — $ — $ — — (0.4) $ — (3.1) (0.1) $ (0.1) 0.1 — $ — $ — — — 0.4 (0.4) $ — 3.0 $ 1.0 — — (0.4) $ — — 0.8 0.5 0.4 1.0 0.5 3.5 1.1 0.6 3.0 F o r m 1 0 - K F-55 (This page has been left blank intentionally.) NEENAH, INC. 2017 ANNUAL REPORT S H A R E H O L D E R INFORMATION CORPORATE HEADQUARTERS TRADEMARKS 2011 2012 2010 2007 2009 STOCK EXCHANGE S H A R E H O L D E R FINANCIAL AND OTHER COMPANY INFORMATION Neenah common stock is traded on the New York Stock Exchange under the symbol NP. As of March 31, 2018, Neenah had approximately 1,240 holders of record of its common stock. Brand names mentioned in this report are trademarks of Neenah, Inc. Crane is a registered trademark of Crane & Co. Inc. ANNUAL MEETING OF SHAREHOLDERS The 2018 annual meeting of the shareholders of Neenah, Inc. will be held Wednesday, May 23, 2018 at 10:00 a.m., Eastern time at Neenah’s headquarters in Alpharetta, Georgia. INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION Neenah, Inc. S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R 3460 Preston Ridge Road S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R Suite 600 S H AR E H O L D E R S H AR E H O L D E R S H AR E H O L D E R Alpharetta, GA 30005 678.566.6500 S H A R E H O L D E R S H A R E H O L D E R TRADEMARKS CORPORATE HEADQUARTERS TRADEMARKS TRADEMARKS TRADEMARKS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS www.neenah.com S H A R E H O L D E R S H A R E H O L D E R Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. TRADEMARKS CORPORATE HEADQUARTERS TRADEMARKS TRADEMARKS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS TRADEMARKS TRADEMARKS TRADEMARKS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS S H A R E H O L D E R of Neenah Paper, Inc. Crane is a registered trademark Brand names mentioned in this report are trademarks of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. TRADEMARKS TRADEMARKS TRADEMARKS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM of Crane & Co. Inc. of Neenah Paper, Inc. Crane is a registered trademark of Crane & Co. Inc. of Crane & Co. Inc. of Crane & Co. Inc. of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road Suite 600 Suite 600 Suite 600 Suite 600 of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks S H AR E H O L D E R S H AR E H O L D E R Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road Deloitte & Touche LLP of Crane & Co. Inc. of Crane & Co. Inc. of Crane & Co. Inc. TRADEMARKS CORPORATE HEADQUARTERS Suite 600 Suite 600 Suite 600 of Crane & Co. Inc. of Crane & Co. Inc. of Crane & Co. Inc. of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 TRADEMARKS CORPORATE HEADQUARTERS S H AR E H O L D E R 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road 191 Peachtree Street Suite 600 Suite 600 Suite 600 STOCK EXCHANGE STOCK EXCHANG E STOCK EXCHANGE STOCK EXCHANGE Brand names mentioned in this report are trademarks Neenah, Inc. Brand names mentioned in this report are trademarks Neenah, Inc. of Crane & Co. Inc. of Crane & Co. Inc. of Crane & Co. Inc. Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 TRADEMARKS CORPORATE HEADQUARTERS 678.566.6500 678.566.6500 678.566.6500 678.566.6500 TRADEMARKS CORPORATE HEADQUARTERS Suite 1500 Suite 600 Suite 600 Suite 600 Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the STOCK EXCHANGE STOCK EXCHANGE STOCK EXCHANGE STOCK EXCHANGE STOCK EXCHANGE STOCK EXCHANGE TRADEMARKS CORPORATE HEADQUARTERS of Neenah, Inc. Crane is a registered trademark 3460 Preston Ridge Road of Neenah, Inc. Crane is a registered trademark Brand names mentioned in this report are trademarks Neenah, Inc. Brand names mentioned in this report are trademarks 3460 Preston Ridge Road Neenah Paper, Inc. 678.566.6500 678.566.6500 678.566.6500 www.neenah.com www.neenah.com www.neenah.com www.neenah.com Atlanta, GA 30303 Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 New York Stock Exchange under the symbol NP. Neenah Paper’s common stock is traded on the 678.566.6500 678.566.6500 678.566.6500 New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Brand names mentioned in this report are trademarks Neenah, Inc. STOCK EXCHANGE STOCK EXCHANGE STOCK EXCHANGE of Crane & Co. Inc. of Crane & Co. Inc. of Neenah, Inc. Crane is a registered trademark Suite 600 of Neenah Paper, Inc. Crane is a registered trademark 3460 Preston Ridge Road Suite 600 3460 Preston Ridge Road www.neenah.com www.neenah.com www.neenah.com New York Stock Exchange under the symbol NP. 678.566.6500 678.566.6500 678.566.6500 New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. www.neenah.com www.neenah.com www.neenah.com TRADEMARKS TRADEMARKS CORPORATE HEADQUARTERS CORPORATE HEADQUARTERS New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the of Neenah, Inc. Crane is a registered trademark 3460 Preston Ridge Road ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* of Crane & Co. Inc. of Crane & Co. Inc. Alpharetta, GA 30005 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Suite 600 Alpharetta, GA 30005 Suite 600 Brand names mentioned in this report are trademarks Brand names mentioned in this report are trademarks www.neenah.com www.neenah.com www.neenah.com Neenah Paper, Inc. Neenah Paper, Inc. TRADEMARKS CORPORATE HEADQUARTERS STOCK EXCHANGE New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. of Crane & Co. Inc. STOCK EXCHANGE TRADEMARKS CORPORATE HEADQUARTERS Suite 600 Among Neenah, Inc., the Russell 2000 Value Index and a Peer Group The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS Deloitte & Touche LLP Deloitte & Touche LLP Deloitte & Touche LLP Deloitte & Touche LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 678.566.6500 ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS Alpharetta, GA 30005 678.566.6500 Alpharetta, GA 30005 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM of Neenah Paper, Inc. Crane is a registered trademark of Neenah Paper, Inc. Crane is a registered trademark Brand names mentioned in this report are trademarks Neenah common stock is traded on the Neenah Paper, Inc. 3460 Preston Ridge Road 3460 Preston Ridge Road Brand names mentioned in this report are trademarks Neenah common stock is traded on the Neenah Paper, Inc. STOCK EXCHANGE STOCK EXCHANGE The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of Alpharetta, GA 30005 Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, 191 Peachtree Street Deloitte & Touche LLP 191 Peachtree Street 191 Peachtree Street 191 Peachtree Street Deloitte & Touche LLP Deloitte & Touche LLP The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS www.neenah.com $180 Deloitte & Touche LLP Deloitte & Touche LLP Deloitte & Touche LLP 678.566.6500 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM STOCK EXCHANGE www.neenah.com of Neenah Paper, Inc. Crane is a registered trademark of Crane & Co. Inc. of Crane & Co. Inc. of Neenah Paper, Inc. Crane is a registered trademark 678.566.6500 New York Stock Exchange under the symbol NP. 3460 Preston Ridge Road 3460 Preston Ridge Road New York Stock Exchange under the symbol NP. Neenah common stock is traded on the Suite 600 Suite 600 Neenah’s common stock is traded on the Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Suite 1500 191 Peachtree Street Suite 1500 Suite 1500 Suite 1500 191 Peachtree Street 191 Peachtree Street 678.566.6500 REGISTRAR AND TRANSFER AGENT May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, 191 Peachtree Street 191 Peachtree Street 191 Peachtree Street Deloitte & Touche LLP Deloitte & Touche LLP Deloitte & Touche LLP Neenah common stock is traded on the of Crane & Co. Inc. $160 www.neenah.com of Crane & Co. Inc. Suite 600 www.neenah.com New York Stock Exchange under the symbol NP. Suite 600 New York Stock Exchange under the symbol NP. Alpharetta, GA 30005 Alpharetta, GA 30005 Computershare ANNUAL MEETING OF SHAREHOLDERS Atlanta, GA 30303 Suite 1500 Atlanta, GA 30303 Atlanta, GA 30303 Atlanta, GA 30303 Suite 1500 Suite 1500 May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at www.neenah.com Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. ANNUAL MEETING OF SHAREHOLDERS STOCK EXCHANGE STOCK EXCHANGE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, Suite 1500 Suite 1500 Suite 1500 191 Peachtree Street 191 Peachtree Street 191 Peachtree Street New York Stock Exchange under the symbol NP. May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM $140 Alpharetta, GA 30005 Alpharetta, GA 30005 STOCK EXCHANGE 678.566.6500 678.566.6500 The 2018 annual meeting of the shareholders of Atlanta, GA 30303 Atlanta, GA 30303 Atlanta, GA 30303 Neenah Paper’s common stock is traded on the Neenah Paper’s common stock is traded on the Deloitte & Touche LLP P.O. Box 30170 The 2018 annual meeting of the shareholders of Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. ANNUAL MEETING OF SHAREHOLDERS STOCK EXCHANGE Deloitte & Touche LLP ANNUAL MEETING OF SHAREHOLDERS Atlanta, GA 30303 Atlanta, GA 30303 Atlanta, GA 30303 Suite 1500 Suite 1500 Suite 1500 May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at 678.566.6500 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. $120 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Neenah Paper’s common stock is traded on the 678.566.6500 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* ANNUAL MEETING OF SHAREHOLDERS www.neenah.com www.neenah.com Neenah, Inc. will be held Wednesday, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately New York Stock Exchange under the symbol NP. New York Stock Exchange under the symbol NP. Neenah Paper’s common stock is traded on the 191 Peachtree Street The 2018 annual meeting of the shareholders of College Station, TX 77842 Neenah, Inc. will be held Wednesday, The 2016 annual meeting of the shareholders of 191 Peachtree Street Deloitte & Touche LLP www.neenah.com Atlanta, GA 30303 Atlanta, GA 30303 Atlanta, GA 30303 Deloitte & Touche LLP Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. New York Stock Exchange under the symbol NP. $100 Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group The 2018 annual meeting of the shareholders of COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* www.neenah.com Deloitte & Touche LLP As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately New York Stock Exchange under the symbol NP. Suite 1500 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* May 23, 2018 at 10:00 a.m., Eastern time at Neenah, Inc. will be held Wednesday, Contact Center: Suite 1500 191 Peachtree Street May 23, 2018 at 10:00 a.m., Eastern time at Neenah Paper, Inc. will be held Thursday, As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately 191 Peachtree Street $80 ANNUAL MEETING OF SHAREHOLDERS ANNUAL MEETING OF SHAREHOLDERS Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group ANNUAL MEETING OF SHAREHOLDERS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Neenah, Inc. will be held Wednesday, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 191 Peachtree Street Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group $180 $180 $180 $180 Atlanta, GA 30303 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* Neenah’s headquarters in Alpharetta, Georgia. Atlanta, GA 30303 Suite 1500 May 23, 2018 at 10:00 a.m., Eastern time at Toll Free U.S. and Canada: 877-498-8847 As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately Suite 1500 Neenah’s headquarters in Alpharetta, Georgia. May 26, 2016 at 10:00 a.m., Eastern time at The 2015 annual meeting of the shareholders of The 2015 annual meeting of the shareholders of $60 The 2014 annual meeting of the shareholders of ANNUAL MEETING OF SHAREHOLDERS Deloitte & Touche LLP Deloitte & Touche LLP Deloitte & Touche LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT Suite 1500 May 23, 2018 at 10:00 a.m., Eastern time at Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group $180 $180 $180 $160 $160 $160 $160 Atlanta, GA 30303 $180 $180 $180 Atlanta, GA 30303 Neenah’s headquarters in Alpharetta, Georgia. TDD for hearing impaired: 800-231-5469 Neenah’s headquarters in Alpharetta, Georgia. Neenah Paper, Inc. will be held Thursday, 191 Peachtree Street The 2015 annual meeting of the shareholders of $40 Neenah Paper, Inc. will be held Thursday, Neenah Paper, Inc. will be held Thursday, 191 Peachtree Street 191 Peachtree Street Deloitte & Touche LLP Computershare Computershare Computershare Computershare REGISTRAR AND TRANSFER AGENT COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT Atlanta, GA 30303 Neenah’s headquarters in Alpharetta, Georgia. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* As of March 31, 2018, Neenah had approximately REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT $160 $160 $160 $140 $140 $140 $140 As of March 31, 2018, Neenah had approximately $180 $180 $180 $160 $160 $160 Suite 1500 May 22, 2014 at 10:00 a.m., Eastern time at Foreign Shareowners: 201-680-6578 Neenah Paper, Inc. will be held Thursday, $20 Suite 1500 Suite 1500 191 Peachtree Street May 21, 2015 at 10:00 a.m., Eastern time at May 21, 2015 at 10:00 a.m., Eastern time at Among Neenah, Inc., the Russell 2000 Value Index and a Peer Group Computershare Computershare Computershare P.O. Box 30170 P.O. Box 30170 P.O. Box 30170 P.O. Box 30170 Among Neenah, Inc., the Russell 2000 Value Index and a Peer Group COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* Computershare Computershare Computershare 1,240 holders of record of its common stock. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT $140 $140 $140 $120 $120 $120 $120 Atlanta, GA 30303 As of March 31, 2018, Neenah had approximately 1,240 holders of record of its common stock. Neenah’s headquarters in Alpharetta, Georgia. As of March 31, 2016, Neenah had approximately $160 $160 $160 $140 $140 $140 TDD Foreign Shareowners: 201-680-6610 Atlanta, GA 30303 Atlanta, GA 30303 Suite 1500 $0 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* May 21, 2015 at 10:00 a.m., Eastern time at Neenah’s headquarters in Alpharetta, Georgia. Neenah’s headquarters in Alpharetta, Georgia. P.O. Box 30170 P.O. Box 30170 P.O. Box 30170 Among Neenah, Inc., the Russell 2000 Value Index and a Peer Group As of March 31, 2018, Neenah had approximately College Station, TX 77842 College Station, TX 77842 College Station, TX 77842 College Station, TX 77842 Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Computershare Computershare Computershare $180 P.O. Box 30170 P.O. Box 30170 P.O. Box 30170 $120 $120 $120 $100 $100 $100 $100 $180 1,240 holders of record of its common stock. 1,450 holders of record of its common stock. $140 $140 $140 $120 $120 $120 2008 Among Neenah, Inc., the Russell 2000 Value Index and a Peer Group www.computershare.com/investor Atlanta, GA 30303 Neenah’s headquarters in Alpharetta, Georgia. REGISTRAR AND TRANSFER AGENT College Station, TX 77842 College Station, TX 77842 College Station, TX 77842 1,240 holders of record of its common stock. As of February 28, 2014, Neenah had approximately Contact Center: Contact Center: Contact Center: Contact Center: REGISTRAR AND TRANSFER AGENT P.O. Box 30170 P.O. Box 30170 P.O. Box 30170 $160 College Station, TX 77842 College Station, TX 77842 College Station, TX 77842 $100 $100 $100 $180 $80 $80 $80 $80 $160 $450 $180 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* $120 $120 $120 $100 $100 $100 As of February 28, 2015, Neenah had approximately As of February 28, 2015, Neenah had approximately Computershare $180 Computershare Contact Center: Contact Center: Contact Center: REGISTRAR AND TRANSFER AGENT Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 REGISTRAR AND TRANSFER AGENT $140 College Station, TX 77842 College Station, TX 77842 College Station, TX 77842 Contact Center: Contact Center: Contact Center: $80 $80 $80 $160 Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group $60 $60 $60 $60 $400 $140 $160 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* $100 $100 $100 $80 $80 $80 As of February 28, 2015, Neenah had approximately REGISTRAR AND TRANSFER AGENT P.O. Box 30170 Computershare $160 Computershare P.O. Box 30170 Computershare Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 $120 Contact Center: Contact Center: Contact Center: Among Neenah Paper, Inc., the Russell 2000 Value Index and a Peer Group Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 $60 $60 $60 REGISTRAR AND TRANSFER AGENT $140 $40 $40 $40 $40 $350 $120 $140 $80 $80 $80 $60 $60 $60 Computershare $180 $180 College Station, TX 77842 $140 P.O. Box 30170 P.O. Box 505000 College Station, TX 77842 P.O. Box 30170 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 Computershare ended December 31, 2017 is available on our website Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 $100 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 $40 $40 $40 $120 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 $20 $20 $20 $20 $100 REGISTRAR AND TRANSFER AGENT REGISTRAR AND TRANSFER AGENT $120 $300 $60 $60 $60 $40 $40 $40 $180 P.O. Box 30170 $160 $160 Contact Center: $120 P.O. Box 43006 Louisville, KY 40233 College Station, TX 77842 Contact Center: College Station, TX 77842 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 $80 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 Computershare Computershare $20 $20 $20 $100 $0 $0 $0 $0 REGISTRAR AND TRANSFER AGENT Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 $80 $100 $250 $40 $40 $40 $20 $20 $20 $160 $140 $140 College Station, TX 77842 Providence, RI 02940-3006 Toll Free U.S. and Canada: 877-498-8847 $100 Contact Center: Toll Free U.S. and Canada: 877-498-8847 Contact Center: TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 $60 www.computershare.com/investor www.computershare.com/investor www.computershare.com/investor www.computershare.com/investor Computershare $0 $0 $0 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 P.O. Box 30170 P.O. Box 30170 $80 $60 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 $80 $200 $20 $20 $20 $0 $0 $0 $140 $120 $120 Contact Center: Commision (SEC), news releases and other information. Contact Center: $80 TDD for hearing impaired: 800-231-5469 2009 2008 2007 2008 2009 2008 2007 2007 Toll Free U.S. and Canada: 877-498-8847 * $100 invested on December 31, 2012 in stock or index, including TDD for hearing impaired: 800-231-5469 Toll Free U.S. and Canada: 877-498-8847 www.computershare.com/investor www.computershare.com/investor www.computershare.com/investor $40 P.O. Box 30170 2008 2009 2008 2009 2008 2007 2007 2007 $60 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 College Station, TX 77842 College Station, TX 77842 $40 $60 www.computershare.com/investor www.computershare.com/investor www.computershare.com/investor $0 $0 $0 $150 For a printed copy of our Form 10-K and Annual Report Neenah Paper, Inc. Nee nah Pap er, Inc. Neenah Paper, Inc. Neenah Paper, Inc. $120 Toll Free U.S. and Canada: 877-498-8847 $100 $100 reinvestment of dividends. Toll Free U.S. and Canada: 877-498-8847 FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION $60 Foreign Shareowners: 201-680-6578 TDD for hearing impaired: 800-231-5469 Foreign Shareowners: 201-680-6578 TDD for hearing impaired: 800-231-5469 $20 Russell 2000 Value Russ ell 200 0 Value Russell 2000 Value Russell 2000 Value 2008 2009 2009 2008 2008 2012 2012 2012 2007 2007 2007 College Station, TX 77842 $40 $20 www.computershare.com/investor www.computershare.com/investor www.computershare.com/investor Contact Center: Contact Center: materials, without charge, please contact: TDD for hearing impaired: 800-231-5469 Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. $100 $100 $80 $80 TDD for hearing impaired: 800-231-5469 Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., $40 TDD Foreign Shareowners: 201-680-6610 FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION Foreign Shareowners: 201-680-6578 Russell 2000 Value Russell 2000 Value Russell 2000 Value TDD Foreign Shareowners: 201-680-6610 $0 Foreign Shareowners: 201-680-6578 $20 Contact Center: $0 Toll Free U.S. and Canada: 877-498-8847 Toll Free U.S. and Canada: 877-498-8847 Foreign Shareowners: 201-680-6578 $20 Russell 2000 Value Russell 2000 Value Russell 2000 Value CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS In dustrie s, In c., P.H. Glatfelter Comp any, KapS ton e Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and $ 50 $80 $60 $60 ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Foreign Shareowners: 201-680-6578 Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Neenah, Inc. 2009 2012 $20 Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., www.computershare.com/investor 2009 2012 TDD Foreign Shareowners: 201-680-6610 www.computershare.com/investor TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 $0 Toll Free U.S. and Canada: 877-498-8847 Russell 2000 Value Russell 2000 Value Russell 2000 Value CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and $0 $0 TDD for hearing impaired: 800-231-5469 TDD for hearing impaired: 800-231-5469 at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, $60 ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and $40 $40 Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Poly pore Interna tional, In c., Sch weitze r-Mauduit In terna tio nal, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Year TDD Foreign Shareowners: 201-680-6610 ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website Attn: Stockholder Services Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year $0 Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., 2014 2016 2017 2009 2011 2012 2007 www.computershare.com/investor 2009 2012 www.computershare.com/investor Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Paper Corp. and Wausau Paper Corp. The peer group average is weighted Pape r Corp. and Wausau Paper Corp . Th e peer group avera ge is weigh ted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted www.computershare.com/investor recent filings with the Securities and Exchange TDD for hearing impaired: 800-231-5469 recent filings with the Securities and Exchange recent filings with the Securities and Exchange recent filings with the Securities and Exchange on Year Foreign Shareowners: 201-680-6578 Foreign Shareowners: 201-680-6578 Neenah, Inc. at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and $40 Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Neenah, Inc. $20 $20 FINANCIAL AND OTHER COMPANY INFORMATION at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, 2011 2009 2012 2007 ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website www.computershare.com/investor Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso FINANCIAL AND OTHER COMPANY INFORMATION by market capitalization. by market c apitalization. by market capitalization. by market capitalization. 3460 Preston Ridge Road Neenah, Inc % Change Russell 2000 Value Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Peer Group: AEP Industries, Inc., Clearwater Paper Corporation, Innophos Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Russell 2000 Value Commision (SEC), news releases and other information Commision (SEC), news releases and other information Commision (SEC), news releases and other information Commision (SEC), news releases and other information recent filings with the Securities and Exchange recent filings with the Securities and Exchange recent filings with the Securities and Exchange Foreign Shareowners: 201-680-6578 Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted TDD Foreign Shareowners: 201-680-6610 TDD Foreign Shareowners: 201-680-6610 FINANCIAL AND OTHER COMPANY INFORMATION Neenah, Inc. recent filings with the Securities and Exchange recent filings with the Securities and Exchange recent filings with the Securities and Exchange $20 $0 $0 Neenah Paper, Inc. Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, Holdings, Inc., Innospec, Inc., Kraton Performance Polymers, Inc., Mercer Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso FINANCIAL AND OTHER COMPANY INFORMATION by market capitalization. by market capitalization. by market capitalization. Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., FINANCIAL AND OTHER COMPANY INFORMATION * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including Suite 600 by market capitalization. by market capitalization. by market capitalization. are available on our website. For a printed copy of our are available on our website. For a printed copy of our are available on our website. For a printed copy of our are available on our website. For a printed copy of our Russell 2000 Value Commision (SEC), news releases and other information Commision (SEC), news releases and other information Commision (SEC), news releases and other information Neenah, Inc. Russell 2000 Value CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and 2009 2011 2009 2011 2012 2012 2007 2007 International, Omnova Solutions, Inc., P.H. Glatfelter Co., Quaker Chemical Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Paper Corp. and Wausau Paper Corp. The peer group average is weighted TDD Foreign Shareowners: 201-680-6610 CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and Commision (SEC), news releases and other information Commision (SEC), news releases and other information Commision (SEC), news releases and other information FINANCIAL AND OTHER COMPANY INFORMATION www.computershare.com/investor www.computershare.com/investor ended December 31, 2017 is available on our website recent filings with the Securities and Exchange recent filings with the Securities and Exchange recent filings with the Securities and Exchange reinvestment of dividends. reinvestment of dividends. reinvestment of dividends. reinvestment of dividends. $0 ended December 31, 2017 is available on our website Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Russell 2000 Value $42.77 2013 Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Corp., Rayonier Advanced Materials, Inc., Schweitzer-Mauduit International, Inc., Alpharetta, GA 30005 by market capitalization. by market capitalization. by market capitalization. Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., are available on our website. For a printed copy of our are available on our website. For a printed copy of our are available on our website. For a printed copy of our * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including are available on our website. For a printed copy of our are available on our website. For a printed copy of our are available on our website. For a printed copy of our 2010 2011 2009 2012 CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and Commision (SEC), news releases and other information Commision (SEC), news releases and other information Commision (SEC), news releases and other information Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., www.computershare.com/investor CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and Paper Corp. and Wausau Paper Polypore International, Inc., SWM , Verso reinvestment of dividends. reinvestment of dividends. reinvestment of dividends. Tredegar Corp. The peer group average is weighted by market capitalization. ended December 31, 2017 is available on our website Paper Corp. and Wausau Paper Polypore International, Inc., SWM , Verso ended December 31, 2015 is available on our website reinvestment of dividends. reinvestment of dividends. reinvestment of dividends. charge, please contact: charge, please contact: charge, please contact: charge, please contact: Nee nah Pap er, Inc. Neenah Paper, Inc. Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., 2012 CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and 866.548.6569 Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., $28.47 1,130.98 Corp. The peer group average is weighted by mar ket capitalizati on. STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including FINANCIAL AND OTHER COMPANY INFORMATION FINANCIAL AND OTHER COMPANY INFORMATION Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without ended December 31, 2017 is available on our website Corp. The peer group average is weighted by market capitalization. are available on our website. For a printed copy of our are available on our website. For a printed copy of our are available on our website. For a printed copy of our Russ ell 200 0 Value Russell 2000 Value at www.neenah.com along with financial reports, Polypore International, Inc., SWM , Verso Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Paper Corp. and Wausau Paper Polypore International, Inc., SWM , Verso reinvestment of dividends. reinvestment of dividends. reinvestment of dividends. charge, please contact: charge, please contact: charge, please contact: Neenah Paper, Inc. or via email to investors@neenah.com charge, please contact: charge, please contact: charge, please contact: STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE Our Annual Report on Form 10-K for the fiscal year Our Annual Report on Form 10-K for the fiscal year Commision (SEC), news releases and other information. FINANCIAL AND OTHER COMPANY INFORMATION Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without Year Year Year Year Year Year Year Year Corp. The peer group average is weighted by market capitalization. Polypore International, Inc., SWM , Verso Commision (SEC), news releases and other information. $22.32 979.25 2011 Corp. The peer group average is weighted by market capitalization. STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Russell Russell Russell Russell Russell 2000 Value * $100 invested on December 31, 2012 in stock or index, including * $100 invested on December 31, 2012 in stock or index, including CSS In dustrie s, In c., P.H. Glatfelter Comp any, KapS ton e Paper and CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and Corp. The peer group average is weighted by market capitalization. (SEC), news releases and other information are ended December 31, 2014, is available on our website ended December 31, 2014, is available on our website For a printed copy of our Form 10-K and Annual Report charge, please contact: charge, please contact: charge, please contact: Our Annual Report on Form 10-K for the fiscal year 2000 2000 2000 2000 Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., reinvestment of dividends. For a printed copy of our Form 10-K and Annual Report Year Year Year Year Year Year Commision (SEC), news releases and other information. on Year on Year on Year on Year on Year on Year on Year on Year reinvestment of dividends. STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Commision (SEC), news releases and other information. Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Russell Russell Russell Attn: Stockholder Services Attn: Stockholder Services Attn: Stockholder Services Attn: Stockholder Services Year Year Year Year Year Year CERTIFICATIONS $19.68 1,058.10 2010 Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Russell Russell Russell * $100 invested on December 31, 2012 in stock or index, including CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and * $100 invested on December 31, 2010 in stock or index, including available on our website. For a printed copy of our at www.neenah.com. In addition, financial reports, at www.neenah.com. In addition, financial reports, materials, without charge, please contact: Commision (SEC), news releases and other information. ended December 31, 2014, is available on our website Poly pore Interna tional, In c., Sch weitze r-Mauduit In terna tio nal, Inc., Verso Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso materials, without charge, please contact: 2000 2000 2000 For a printed copy of our Form 10-K and Annual Report Value Value Value Value For a printed copy of our Form 10-K and Annual Report on Year on Year on Year on Year on Year on Year reinvestment of dividends. * $100 invested on December 31, 2012 in stock or index, including 2000 2000 2000 % Change % Change % Change % Change % Change % Change % Change % Change Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., reinvestment of dividends. Attn: Stockholder Services Attn: Stockholder Services Attn: Stockholder Services Year Year Year Year Year Year 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road on Year on Year on Year on Year on Year on Year Neenah Paper, Inc. Neenah Paper, Inc. Neenah Paper, Inc. Russell Russell Russell Pape r Corp. and Wausau Paper Corp . Th e peer group avera ge is weigh ted Paper Corp. and Wausau Paper Corp. The peer group average is weighted Attn: Stockholder Services Attn: Stockholder Services Attn: Stockholder Services STOCK PRICE PERFORMANCE recent filings with the Securities and Exchange recent filings with the Securities and Exchange For a printed copy of our Form 10-K and Annual Report $60.27 1,523.45 2014 at www.neenah.com. In addition, financial reports, STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE reinvestment of dividends. Polypore International, Inc., Schweitzer-Mauduit International, Inc., Verso materials, without charge, please contact: materials, without charge, please contact: Value Value Value by market c apitalization. by market capitalization. 2000 2000 2000 % Change % Change % Change % Change % Change % Change Value Value Value Neenah, Inc. 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road on Year on Year on Year on Year on Year on Year Suite 600 Suite 600 Suite 600 Suite 600 Neenah, Inc. % Change % Change % Change % Change % Change % Change Paper Corp. and Wausau Paper Corp. The peer group average is weighted Neenah Paper, Inc. Attn: Stockholder Services Attn: Stockholder Services Attn: Stockholder Services Commision (SEC), news releases and other information Commision (SEC), news releases and other information 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road materials, without charge, please contact: recent filings with the Securities and Exchange 50% 32% 1,491.42 2013 50% 32% 50% 32% 50% 32% 1,491.42 2013 1,491.42 2013 1,491.42 2013 Year STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE Russell Year Year Russell our public disclosure have been included as exhibits by market capitalization. Year Year Russell * $100 invested on December 31, 2009 in stock or index, including * $100 invested on December 31, 2009 in stock or index, including Value Value Value Attn: Stockholder Services Suite 600 Suite 600 Suite 600 Attn: Stockholder Services STOCK PRICE PERFORMANCE are available on our website. For a printed copy of our are available on our website. For a printed copy of our Neenah, Inc. Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 % Change % Change % Change % Change % Change % Change 2000 Attn: Stockholder Services Commision (SEC), news releases and other information Neenah Paper, Inc. 3460 Preston Ridge Road 3460 Preston Ridge Road 3460 Preston Ridge Road Suite 600 Suite 600 Suite 600 on Year 50% 32% 1,491.42 2013 50% 32% 50% 32% 2013 1,491.42 2013 1,491.42 2000 on Year on Year of the year indicated. reinvestment of dividends. reinvestment of dividends. 2012 2012 2012 2012 2000 50% 32% 50% 32% 50% 32% 1,491.42 2013 1,491.42 2013 1,491.42 2013 on Year on Year 28% 15% 1,130.98 28% 15% 1,130.98 28% 15% 1,130.98 28% 15% 1,130.98 Neenah, Inc. Year Year Russell * $100 invested on December 31, 2009 in stock or index, including Year Year Russell Form 10-K and Annual Report materials, without Form 10-K and Annual Report materials, without 3460 Preston Ridge Road 3460 Preston Ridge Road are available on our website. For a printed copy of our Value Value Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 % Change % Change Attn: Stockholder Services 866.548.6569 866.548.6569 866.548.6569 866.548.6569 3460 Preston Ridge Road Attn: Stockholder Services % Change Value % Change % Change Suite 600 Suite 600 Suite 600 Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 Year Year reinvestment of dividends. Russell 2012 2012 2012 2000 50% 32% 50% 32% 50% 32% 2013 1,491.42 2013 1,491.42 2013 1,491.42 on Year on Year 28% 15% 1,130.98 28% 15% 1,130.98 28% 15% 1,130.98 2000 on Year on Year 2012 2012 2012 Attn: Stockholder Services 13% -7% 979.25 13% -7% 979.25 13% -7% 979.25 13% -7% 979.25 2011 2011 2011 2011 charge, please contact: charge, please contact: 28% 15% 1,130.98 28% 15% 1,130.98 28% 15% 1,130.98 Suite 600 Form 10-K and Annual Report materials, without Suite 600 STOCK PRICE PERFORMANCE STOCK PRICE PERFORMANCE or via email to investors@neenah.com or via email to investors@neenah.com or via email to investors@neenah.com or via email to investors@neenah.com 866.548.6569 866.548.6569 866.548.6569 3460 Preston Ridge Road 2000 Value on Year % Change on Year % Change Suite 600 3460 Preston Ridge Road Value Alpharetta, GA 30005 Alpharetta, GA 30005 Alpharetta, GA 30005 % Change % Change 866.548.6569 866.548.6569 866.548.6569 1491.42 2013 2012 2012 2012 Alpharetta, GA 30005 13% -7% 979.25 13% -7% 979.25 13% -7% 979.25 2011 2011 2011 charge, please contact: 28% 15% 1,130.98 28% 15% 1,130.98 28% 15% 1,130.98 3460 Preston Ridge Road Value % Change % Change 50% 32% 1,491.42 2013 13% -7% 979.25 13% -7% 979.25 13% -7% 979.25 2011 2011 2011 41% 22% 1,058.10 41% 22% 1,058.10 41% 22% 1,058.10 41% 22% 1,058.10 STOCK PRICE PERFORMANCE or via email to investors@neenah.com 2010 or via email to investors@neenah.com or via email to investors@neenah.com 2010 2010 2010 50% 32% 1,491.42 2013 Alpharetta, GA 30005 6% 6% 1,883.34 2017 2016 Year Year Year Year Suite 600 Alpharetta, GA 30005 Suite 600 or via email to investors@neenah.com or via email to investors@neenah.com or via email to investors@neenah.com 866.548.6569 866.548.6569 866.548.6569 Neenah Paper, Inc. Neenah Paper, Inc. Russell Russell 2012 1130.98 CERTIFICATIONS CERTIFICATIONS CERTIFICATIONS CERTIFICATIONS 866.548.6569 Suite 600 13% -7% 13% 979.25 13% -7% 979.25 -7% 979.25 2011 2011 2011 41% 22% 1,058.10 41% 22% 1,058.10 41% 22% 1,058.10 2010 2010 2010 2000 2000 50% 32% 1,491.42 2013 2012 866.548.6569 32% 50% 2013 1,491.42 Year Year 28% 15% 1,130.98 Alpharetta, GA 30005 on Year on Year on Year on Year 2012 22% 1,058.10 41% 22% 1,058.10 41% 22% 1,058.10 41% or via email to investors@neenah.com or via email to investors@neenah.com or via email to investors@neenah.com 2010 2010 2010 Neenah Paper, Inc. 866.548.6569 Alpharetta, GA 30005 4% -9% 4% -9% 4% -9% 4% -9% 1,380.60 2015 36% 29% 1,779.87 2016 2015 1,380.60 1,380.60 1,380.60 2015 2015 2015 Russell 28% 15% 1,130.98 Attn: Stockholder Services Attn: Stockholder Services Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer or via email to investors@neenah.com -7% 979.25 2011 CERTIFICATIONS CERTIFICATIONS CERTIFICATIONS 32% 50% 1,491.42 2013 CERTIFICATIONS CERTIFICATIONS CERTIFICATIONS Alpharetta, GA 30005 2000 or via email to investors@neenah.com Value Value on Year on Year 2012 1,058.10 41% 22% 41% 22% 1,058.10 41% 22% 1,058.10 2010 2010 2010 or via email to investors@neenah.com 866.548.6569 4% -9% % Change % Change % Change % Change 4% -9% 4% -9% 1,380.60 2015 1,380.60 1,380.60 2015 2015 28% 15% 1,130.98 2012 Attn: Stockholder Services 866.548.6569 13% -7% 979.25 2011 and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of 3460 Preston Ridge Road 3460 Preston Ridge Road 28% 15% 1,130.98 Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer 4% -9% 1,380.60 2015 2014 13% -7% 979.25 2011 41% 2% 41% 2% 41% 2% 1,523.45 1,523.45 1,523.45 2014 2014 2014 1,058.10 2010 Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer CERTIFICATIONS CERTIFICATIONS CERTIFICATIONS 2012 866.548.6569 CERTIFICATIONS 1,130.98 15% 28% Value or via email to investors@neenah.com our public disclosure have been included as exhibits our public disclosure have been included as exhibits our public disclosure have been included as exhibits our public disclosure have been included as exhibits % Change % Change or via email to investors@neenah.com and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of 3460 Preston Ridge Road Suite 600 Suite 600 of the year indicated. of the year indicated. of the year indicated. of the year indicated. Neenah Paper, Inc. 2015 Annual Report 13% -7% 979.25 2011 41% 2% 41% 2% 41% 2% 1,523.45 1,523.45 1,523.45 2014 2014 2014 13% 979.25 -7% 2011 CERTIFICATIONS and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of 41% 22% 1,058.10 2010 Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer 41% 2% 1,523.45 2014 2013 865.82 2009 50% 32% 50% 32% Neenah has included as exhibits to its Annual Report on 1,491.42 2013 1,491.42 2013 CERTIFICATIONS 41% 22% 1,058.10 2010 or via email to investors@neenah.com to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal 13% -7% 979.25 2011 our public disclosure have been included as exhibits our public disclosure have been included as exhibits our public disclosure have been included as exhibits Suite 600 of the year indicated. of the year indicated. of the year indicated. Alpharetta, GA 30005 Alpharetta, GA 30005 our public disclosure have been included as exhibits our public disclosure have been included as exhibits our public disclosure have been included as exhibits and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of of the year indicated. of the year indicated. of the year indicated. 50% 32% 1,491.42 2013 CERTIFICATIONS 41% 22% 1,058.10 2010 CERTIFICATIONS 41% 1,058.10 22% 2010 41% 2% 1,523.45 2014 50% 32% 1,491.42 2013 2012 2012 2012 28% 15% 1,130.98 28% 15% 1,130.98 year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. 41% 2% 1,523.45 2014 to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal CERTIFICATIONS 41% 1,058.10 22% 2010 Alpharetta, GA 30005 our public disclosure have been included as exhibits our public disclosure have been included as exhibits our public disclosure have been included as exhibits 866.548.6569 866.548.6569 of the year indicated. of the year indicated. of the year indicated. of the year indicated. 2012 28% 15% 1,130.98 year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. 2% 41% 1,523.45 2014 41% 2% 1,523.45 2014 13% -7% 979.25 13% -7% 979.25 2011 2011 year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. our public disclosure have been included as exhibits to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal our public disclosure have been included as exhibits or via email to investors@neenah.com or via email to investors@neenah.com 866.548.6569 2% 41% 1,523.45 2014 of the year indicated. 13% -7% 979.25 2011 of the year indicated. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. the quality of our public disclosure. our public disclosure have been included as exhibits 41% 22% 1,058.10 41% 22% 1,058.10 or via email to investors@neenah.com 2010 2010 our public disclosure have been included as exhibits CERTIFICATIONS CERTIFICATIONS our public disclosure have been included as exhibits of the year indicated. of the year indicated. 1,058.10 2010 1,523.45 1,523.45 2014 2014 of the year indicated. Certifications of Neenah’s Chief Executive Officer Certifications of Neenah’s Chief Executive Officer CERTIFICATIONS Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report 1,523.45 and Chief Financial Officer regarding the quality of and Chief Financial Officer regarding the quality of Certifications of Neenah’s Chief Executive Officer Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report our public disclosure have been included as exhibits our public disclosure have been included as exhibits and Chief Financial Officer regarding the quality of Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report to its Annual Report on Form 10-K for the fiscal to its Annual Report on Form 10-K for the fiscal our public disclosure have been included as exhibits year ended December 31, 2014 filed with the SEC. year ended December 31, 2014 filed with the SEC. to its Annual Report on Form 10-K for the fiscal Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report year ended December 31, 2014 filed with the SEC. Neenah, Inc. 2017 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Paper Corp. and Wausau Paper Paper Corp. and Wausau Paper Neenah Neenah Neenah Neenah Paper, Inc. Paper, Inc. Paper, Inc. Paper, Inc. Neenah Neenah Neenah Neenah Neenah Neenah Paper, Inc. Paper, Inc. Paper, Inc. 2% Paper, Inc. Paper, Inc. Paper, Inc. Neenah Neenah Neenah $42.77 $42.77 $42.77 $42.77 Paper, Inc. Paper, Inc. Paper, Inc. $42.77 $42.77 $42.77 $42.77 $42.77 $42.77 $28.47 $28.47 $28.47 $28.47 Neenah, Inc Neenah, Inc Neenah, Inc. $42.77 $42.77 $42.77 $28.47 $28.47 $28.47 Neenah $22.32 $22.32 $22.32 $22.32 $28.47 $28.47 $28.47 Neenah, Inc Paper, Inc 50% $22.32 $22.32 $22.32 $28.47 $28.47 $28.47 Neenah, Inc $42.77 $22.32 $22.32 $22.32 $19.68 $19.68 $19.68 $19.68 $42.77 $90.65 28% Neenah Neenah $22.32 $22.32 $22.32 $19.68 $19.68 $19.68 $42.77 $42.77 $28.47 $19.68 $19.68 $19.68 $62.43 $62.43 $62.43 $62.43 $85.20 $28.47 Paper, Inc. Paper, Inc. $42.77 Neenah $19.68 $19.68 $19.68 $62.43 $62.43 $62.43 $28.47 $22.32 $28.47 $62.43 $22.32 $60.27 $60.27 $60.27 Paper, Inc. $28.47 $22.32 $60.27 $60.27 $60.27 $22.32 $19.68 $60.27 $42.77 $42.77 $19.68 $22.32 $42.77 $19.68 $19.68 $60.27 $42.77 $28.47 $28.47 $60.27 $19.68 $28.47 $60.27 $60.27 $22.32 $22.32 $60.27 $22.32 $19.68 $19.68 Neenah, Inc. Russell 2000 Value Peer Group: AEP Industries Inc., Boise Inc., Buckeye Technologies Inc., CSS Industries, Inc., P.H. Glatfelter Company, KapStone Paper and Packaging Corporation, Minerals Technologies Inc., OMNOVA Solutions Inc., Polypore International, Inc., SWM , Verso Corp. The peer group average is weighted by market capitalizati on. 2010 2010 STOCK PRICE PERFORMANCE 2007 2007 7 Neenah Paper, Inc. 2013 Annual Report Year 2010 on Year 2010 % Change Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Russell 2000 Value of the year indicated. of the year indicated. of the year indicated. Paper Corp. and Wausau Paper Neenah Paper, Inc. $19.68 $60.27 $60.27 1,491.42 41% 41% 41% $60.27 22% 2% 2% 2013 2008 2008 % Change $42.77 $28.47 $19.68 $13.95 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2014 $22.32 50% 32% on Year 22% 41% 41% 28% 2009 2009 15% 13% 41% -7% 2% 32% 2010 2010 2011 2011 2008 2008 2007 2007 2007 22% 58% 18% 15% 13% 2015 2010 41% 2009 2009 2010 2010 2011 2011 2010 2010 2012 2012 Year 2008 2008 2008 2008 2011 2011 2010 2007 2010 2007 2010 2008 2011 2011 2009 2008 2008 2011 2007 2009 2011 2008 2012 2012 2012 2010 2011 2009 2012 2011 2010 2012 $40 Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report Neenah Paper, Inc. 2015 Annual Report 2016 1,779.87 29% $85.20 36%2016 1,779.87 29% $85.20 36%2016 1,779.87 29% $85.20 36%2016 1,779.87 29% $85.20 36%2016 1,779.87 29% $85.20 36%Compensation GroupStart12/31/12End12/31/1712/31/1212/31/1312/31/1412/31/1512/30/1612/29/17CAGRNPNeenah, Inc.$100$153$220$233$324$35128.5%IYBBKRussell 2000 Value (TR)$100$135$140$130$171$18413.0%Peer Group Average$100$123$132$106$155$1559.2%Mkt Cap @ StartWeight1aepiAEP Industries, Inc.1008998130198327.33.95%2omnOMNOVA Solutions, Inc.10013011687143143327.63.95%3gltP.H. Glatfelter Co.100161152112149136749.19.03%4swmSchweitzer-Mauduit International, Inc.1001351151191351401211.314.61%5clwClearwater Paper Corp.100134175116167116908.710.96%6iphsInnophos Holdings, Inc.100108134691311221010.012.18%7iospInnospec, Inc.100135127163208217802.99.68%8kraKraton Corp.100968769119200775.59.35%9mercMercer International, Inc.100139172129160224399.64.82%10kwrQuaker Chemical Corp.100145176150252300704.68.50%11ryamRayonier Advanced Materials, Inc.100457398419.75.06%12tgTredegar Corp.10014311370127104655.97.91%Avg8292.3$0$50$100$150$200$250$300$350$40012/31/1212/31/1312/31/1412/31/1512/30/1612/29/17Neenah, Inc.Russell 2000 Value (TR)Peer Group Average LEADERSHIP LEADERSHIP EXECUTIVE TEAM EXECUTIVE TEAM BOARD OF DIRECTORS BOARD OF DIRECTORS LEADERSHIP EXECUTIVE TEAM John P. O’Donnell John P. O’Donnell President and President and William M. Cook William M. Cook Retired Executive Retired Executive Chairman of Donaldson Chairman of Donaldson Company Inc. Company Inc. BOARD OF DIRECTORS Margaret S. Dano Margaret S. Dano Former Vice President, William M. Cook Former Vice President, Honeywell International Honeywell International Retired Executive Inc., Worldwide Inc., Worldwide Operations of Garrett Chairman of Donaldson Operations of Garrett Engine Boosting Systems Company Inc. Engine Boosting Systems Margaret S. Dano Sean T. Erwin Sean T. Erwin Former Vice President, Chairman of the Board, Honeywell International Chairman of the Board, Former President and Inc., Worldwide Former President and Operations of Garrett Neenah, Inc. Engine Boosting Systems Neenah, Inc. Timothy S. Lucas, CPA Sean T. Erwin Timothy S. Lucas, CPA Independent Consultant, Chairman of the Board, Retired Independent Independent Consultant, Lucas Financial Reporting Former President and Consultant, Lucas Financial Lucas Financial Reporting and Former Director of Reporting and Former and Former Director of Director of Research, FASB Research, FASB Neenah, Inc. Research, FASB Timothy S. Lucas, CPA Independent Consultant, Lucas Financial Reporting and Former Director of Research, FASB Bonnie C. Lind Bonnie C. Lind John P. O’Donnell Senior Vice President, Senior Vice President, President and and Treasurer and Treasurer Steven S. Heinrichs Bonnie C. Lind Steven S. Heinrichs Senior Vice President, Senior Vice President, Senior Vice President, General Counsel General Counsel and Secretary and Treasurer and Secretary Julie A. Schertell Steven S. Heinrichs Julie A. Schertell Senior Vice President, Senior Vice President, Senior Vice President, President Fine Paper General Counsel President Fine Paper and Packaging and Secretary and Packaging Byron J. Racki Armin G. Schwinn Julie A. Schertell Armin G. Schwinn Senior Vice President, Senior Vice President, Senior Vice President, Senior Vice President, President Performance Managing Director, President Fine Paper Managing Director, Materials Neenah Germany and Packaging Neenah Germany Armin G. Schwinn Matt L. Duncan Matt L. Duncan Senior Vice President, Senior Vice President Senior Vice President Managing Director, and Chief Human and Chief Human Neenah Germany Resources Officer Resources Officer Matt L. Duncan Senior Vice President and Chief Human Resources Officer John F. McGovern John F. McGovern Partner, Aurora Capital LLC Partner, Aurora Capital LLC and Former Executive and Former Executive Vice President and Vice President and John F. McGovern Philip C. Moore Philip C. Moore Partner, Aurora Capital LLC Retired Senior Vice President, and Former Executive Retired Senior Vice President, Deputy General Counsel Vice President and Deputy General Counsel and Corporate Secretary, and Corporate Secretary, TD Bank Group TD Bank Group Philip C. Moore John P. O’Donnell John P. O’Donnell Retired Senior Vice President, President and Deputy General Counsel President and , and Corporate Secretary, , Neenah, Inc. TD Bank Group Neenah, Inc. Stephen M. Wood, Ph.D. John P. O’Donnell Stephen M. Wood, Ph.D. Former President and President and Former President and , FiberVisions Corporation Neenah, Inc. FiberVisions Corporation Stephen M. Wood, Ph.D. Former President and FiberVisions Corporation Neenah, Inc. 2017 Annual Report NEENAH, INC. 2017 ANNUAL REPORT 

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