SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
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Techne Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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4) Date Filed:
TECHNE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
October 29, 2009
The annual meeting of shareholders (the "Annual Meeting") of Techne
Corporation (the "Company") will be held at the offices of the Company, 614
McKinley Place N.E., Minneapolis, Minnesota, on Thursday, October 29, 2009,
at 3:30 p.m. (Central Daylight Time), for the following purposes:
1. To set the number of members of the Board of Directors at eight (8).
2. To elect directors of the Company for the ensuing year.
3. To take action upon any other business that may properly come before
the meeting or any adjournment thereof.
Only shareholders of record shown on the books of the Company at the close
of business on September 11, 2009 will be entitled to vote at the meeting or
any adjournment thereof. Each shareholder is entitled to one vote per share
on all matters to be voted on at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan
to attend the meeting, please sign, date and return your Proxy in the return
envelope provided as soon as possible. Your cooperation in promptly signing
and returning the Proxy will help avoid further solicitation expense to the
Company.
This Notice, the Proxy Statement and the enclosed Proxy are sent to you by
order of the Board of Directors (the "Board of Directors" or the "Board").
THOMAS E. OLAND,
Chairman of the Board and President
Dated: September 22, 2009
Minneapolis, Minnesota
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING TO BE HELD ON OCTOBER 29, 2009:
The Proxy Statement and 2009 Annual Report to Shareholders are
available at https://materials.proxyvote.com/878377
You may vote your proxy at www.proxyvote.com
TECHNE CORPORATION
__________
PROXY STATEMENT
for
Annual Meeting of Shareholders
To Be Held October 29, 2009
__________
INTRODUCTION
Your Proxy is solicited by the Board of Directors of Techne Corporation
(the "Company") for use at the Annual Meeting of Shareholders to be held on
October 29, 2009 and at any adjournment thereof, for the purposes set forth
in the attached Notice of Annual Meeting. The Notice of Annual Meeting,
Proxy Statement, 2009 Annual Report to Shareholders and proxy card are being
mailed to stockholders on or about September 22, 2009.
The cost of soliciting Proxies, including preparing, assembling and
mailing the Proxies and soliciting material, will be borne by the Company.
Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit Proxies
personally or by telephone.
Proxies not revoked will be voted in accordance with the choice specified
by shareholders by means of the ballot provided on the Proxy for that
purpose. Proxies which are signed but which lack any such specification
will, subject to the following, be voted in favor of the proposals set forth
in the Notice of Annual Meeting and in favor of the number and slate of
directors proposed by the Nominations and Governance Committee of the Board
of Directors and listed herein. If a shareholder abstains from voting as to
any matter, then the shares held by such shareholder shall be deemed present
at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions, therefore, as to any
proposal, other than election of directors, will have the same effect as
votes against such proposal. If a broker returns a "non-vote" proxy,
indicating a lack of voting instruction by the beneficial holder of the
shares and a lack of discretionary authority on the part of the broker to
vote on a particular matter, then the shares covered by such non-vote shall
be deemed present at the meeting for purposes of determining a quorum but
shall not be deemed to be represented at the meeting for purposes of
calculating the vote required for approval of such matter. You may revoke
your proxy by sending a written statement to that effect to the Corporate
Secretary of the Company, submitting a properly signed proxy card with a
later date, or filing a notice of termination of the proxy and voting in
person at the Annual Meeting. If you need directions to the Annual Meeting,
please contact the Company at 612-379-8854. The mailing address of the
Company's principal executive office is 614 McKinley Place N.E., Minneapolis,
MN 55413.
You may vote your proxy by internet at www.proxyvote.com
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 11, 2009 as the
record date for determining shareholders entitled to vote at the Annual
Meeting. Persons who were not shareholders on such date will not be allowed
to vote at the Annual Meeting. At the close of business on September 11,
2009, 37,244,629 shares of the Company's Common Stock were issued and
outstanding. Such Common Stock is the only outstanding class of stock of the
Company. Each share of Common Stock is entitled to one vote on each matter
to be voted upon at the meeting. Holders of the Common Stock are not
entitled to cumulative voting rights in the election of directors.
PRINCIPAL SHAREHOLDERS
The following table provides information concerning the only persons known
to the Company to be the beneficial owners of more than 5% of the Company's
outstanding Common Stock as of September 11, 2009:
Amount and
Name and Address Nature of Shares Percent
of Beneficial Owner Beneficially Owned of Class
------------------------------- ------------------ --------
Morgan Stanley 4,863,586 (1) 13.1%
1585 Broadway
New York, NY 10036
Barclays Global Investors 2,254,312 (2) 6.1%
400 Howard Street
San Francisco, CA 94105
FMR LLC 1,912,845 (3) 5.1%
82 Devonshire Street
Boston, MA 02109
---------------
(1) Sole voting power over 4,667,337 shares. Shared voting power over 154
shares. Sole investing power over 4,863,586 shares.
(2) Sole voting power over 1,801,131 shares. Sole investing power over
2,254,312 shares.
(3) Sole voting power over 267 shares. Sole investing power over 1,912,845
shares.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of September 11, 2009, by each executive
officer of the Company named in the Summary Compensation Table, by each
director and by all directors and executive officers (including the named
individuals) as a group. Shares beneficially owned by Mr. Oland constitute
4.2% of total shares outstanding. Each other individual beneficially owns
less than one percent of total shares outstanding plus shares subject to
options exercisable by him or her. As a group, officers and directors
beneficially own 7.5% of total shares outstanding plus shares subject to
options exercisable by them.
Name of Director or Number of Shares
Executive Officer Group Beneficially Owned(1)
------------------------------- -----------------------
Thomas E. Oland 1,549,709 (2)
Roger C. Lucas, Ph.D. 31,456 (3)(4)(5)
Howard V. O'Connell 175,629 (3)(4)(6)
G. Arthur Herbert 214,360 (3)(7)
Randolph C. Steer, M.D., Ph.D. 10,000 (3)(4)(8)
Robert V. Baumgartner 32,000 (3)(4)(9)
Charles A. Dinarello, M.D. 21,500 (3)(4)(8)
Karen A. Holbrook, Ph.D. 20,000 (3)(4)(8)
John L. Higgins 5,000 (3)(4)(8)
Marcel Veronneau 56,577 (10)
Gregory J. Melsen 28,560 (11)
Officers and directors as
a group (11 persons) 2,796,343 (12)
2
---------------
(1) Unless otherwise indicated, the person listed as the beneficial owner
has sole voting and sole investment power over outstanding shares.
Shares beneficially owned includes shares subject to options that are
currently outstanding and exercisable and options that are currently
outstanding and will become exercisable within 60 days of September 11,
2009.
(2) Includes 1,183,420 shares owned directly, 91,809 shares held by the
Company's Stock Bonus Plan for Mr. Oland's account, 68,556 shares held
by Thomas Oland and Associates and 205,924 shares held by the Thomas
Oland and Associates Profit Sharing Plan and Trust. Does not include
658,764 shares held by the Company's Stock Bonus Plan for accounts of
employees other than Mr. Oland, which are included in the group total
in the above table. Including such 658,764 shares, Mr. Oland, a
director of the Company, beneficially owns 2,208,473 shares or 5.9% of
total shares outstanding.
(3) Does not include 750,573 shares held by the Company's Stock Bonus Plan,
which are included in the total of officers and directors as a group.
The Company's Board of Directors, acting by majority vote, currently
directs the Trustee, Marshall and Ilsley Trust Company, N.A. as to the
voting of such shares.
(4) Does not include a stock option to purchase 5,000 shares which will be
granted on and will become exercisable as of the date of the Annual
Meeting pursuant to the 1998 Nonqualified Stock Option Plan if the
individual is re-elected as a director of the Company.
(5) Includes 1,456 shares owned directly and 30,000 shares subject to stock
options.
(6) Includes 127,629 shares owned by trusts of which Mr. O'Connell is a
trustee and beneficiary and 48,000 shares subject to stock options.
(7) Includes 11,000 shares owned by Mr. Herbert's wife, 153,360 shares held
by trusts and a partnership of which Mr. Herbert is a trustee or
partner and 50,000 shares subject to stock options.
(8) All shares subject to stock options.
(9) Includes 2,000 shares owned directly and 30,000 shares subject to stock
options.
(10) Includes 31,299 shares owned directly, 6,672 shares held by the
Company's Stock Bonus Plan for Mr. Veronneau's account and 18,606
shares subject to stock options.
(11) Includes 540 shares held by the Company's Stock Bonus Plan for Mr.
Melsen's account and 28,020 shares subject to stock options.
(12) Includes 750,573 shares held by the Company's Stock Bonus Plan as to
which the Company's Board of Directors directs the voting and 261,126
shares which may be purchased pursuant to stock options.
3
ELECTION OF DIRECTORS
(Proposals #1 and #2)
General Information
The bylaws of the Company provide that the number of directors shall be
determined by the shareholders at each Annual Meeting. The Nominations and
Governance Committee of the Board of Directors recommended to the Board of
Directors that the number of directors be set at eight and that the
individuals named in the table below be elected. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE THAT THE NUMBER OF DIRECTORS BE SET AT EIGHT AND
THAT THE INDIVIDUALS NAMED IN THE TABLE BELOW BE ELECTED. Under applicable
Minnesota law and the Company's bylaws, approval of the proposal to set the
number of directors at eight requires the affirmative vote of the holders of
the greater of (1) a majority of the voting power of the shares represented
in person or by proxy at the Annual Meeting with authority to vote on such
matter or (2) a majority of the voting power of the minimum number of shares
that would constitute a quorum for the transaction of business at the Annual
Meeting. A plurality of votes cast is required for the election of
directors.
In the election of directors, each Proxy will be voted for each of the
nominees listed below unless the Proxy withholds a vote for one or more of
the nominees. Each person elected as a director shall serve for a term of
one year or until his or her successor is duly elected and qualified. All of
the nominees are members of the present Board of Directors. All directors,
except Mr. Higgins, were elected to the Board of Directors by the
shareholders. If any of the nominees should be unable to serve as a
director by reason of death, incapacity or other unexpected occurrence, the
Proxies solicited by the Board of Directors shall be voted by the proxy
representatives for such substitute nominee as is selected by the Nominations
and Governance Committee, or, in the absence of such selection, for such
fewer number of directors as results from such death, incapacity or other
unexpected occurrence.
The following table provides certain information with respect to the
nominees for director.
Current
Position(s) Principle Occupation(s) Director
Name Age with Company During Past Five Years Since
--------------------- --- --------------- ------------------------ --------
Thomas E. Oland 68 Chairman of the Chairman of the Board, 1985
Board, Chief Chief Executive Officer,
Executive President and Treasurer
Officer, of the Company since
President, 1985 and President of
Treasurer and Research and Diagnostic
Director Systems, Inc. since 1982.
Roger C. Lucas, Ph.D. 66 Vice Chairman Vice Chairman and 1985
and Director Senior Scientific Advisor
to the Company's Board
and a private investor
since 1995. Chief
Scientific Officer,
Executive Vice President
and Secretary of the
Company from 1985 to 1995.
Howard V. O'Connell 79 Director Private investor since 1990 1985
Chairman, President and
Treasurer of John G.
Kinnard and Company,
Incorporated, a securities
broker-dealer, from 1969
to 1990.
4
Current
Position(s) Principle Occupation(s) Director
Name Age with Company During Past Five Years Since
--------------------- --- --------------- ------------------------ --------
Randolph C. Steer, 59 Director President and Chief 1990
M.D., Ph.D. Operating Officer of
OrthoLogic Corp., a
biotechnology company,
since 2006. Consultant
to the pharmaceutical and
biotechnology industries
from 1989 to 2006.
Director of OrthoLogic
Corp.
Robert V. 53 Director Chief Executive Officer 2003
Baumgartner, C.P.A. of Center for Diagnostic
Imaging, Inc., an operator
of diagnostic imaging
centers, since 2001.
Charles A. Dinarello,
M.D. 66 Director Professor of Medicine at 2005
the University of
Colorado School of
Medicine in Denver,
Colorado since 1996.
Karen A. Holbrook,
Ph.D. 66 Director Vice President for 2007
Research and Innovation,
University of South
Florida, since 2007;
Former President of The
Ohio State University
from 2002 to 2007.
John L. Higgins 39 Director President and Chief 2009
Executive Officer of
Ligand Pharmaceuticals
Incorporated, since
January 2007. Chief
Financial Officer for
Connetics Corporation
from 1997 to 2007.
Director of Ligand
Pharmaceuticals
Incorporated and BioCryst
Pharmaceuticals, Inc.
G. Arthur Herbert is not standing for re-election and therefore his term
of office as a Director of the Company will expire as of the fiscal 2009
Annual Meeting.
5
CORPORATE GOVERNANCE
Board Independence
The Board has determined that all of the Company's non-employee directors
are "independent" as such term is defined in applicable law and regulations
of the Securities and Exchange Commission and Nasdaq. Mr. Oland is not
independent based on his service as the Company's Chief Executive Officer and
President. In making its independence determinations, the Board reviewed
transactions and relationships between the director, or any member of his or
her immediate family, and the Company and its subsidiaries based on
information provided by the director, Company records and publicly available
information.
Related Party Transactions
During fiscal 2009, Mr. Oland's daughter, Paige Jensen, Ph.D., J.D.,
served as the Company's Associate General Counsel. Dr. Jensen's base salary
for fiscal 2009 was $128,000. The Company also provided medical and other
benefits generally available to all Company employees. Dr. Jensen is not an
executive officer of the Company.
Directors' Meetings and Committees
The Board has scheduled meetings each quarter prior to the Company's
quarterly earnings release and may from time-to-time hold additional
meetings. During fiscal 2009, the Board held four meetings. Each director
attended 75% or more of the total number of meetings of the Board and of
Committees of which he or she was a member, with the exception of Mr.
Higgins. Mr. Higgins was appointed to the Board, the Audit Committee, the
Executive Compensation Committee and the Nominations and Governance Committee
in May 2009. Executive sessions of independent directors, meetings of
outside directors without any member of management present, are held in
conjunction with regularly scheduled meetings of the Board. It is the policy
of the Company that all directors should attend the Company's annual meeting
of shareholders. All then incumbent members did attend the annual meeting in
2008.
The Company's Board of Directors has three standing Committees, the Audit
Committee, the Executive Compensation Committee and the Nominations and
Governance Committee. All members of all Committees are "independent" as
such term is defined in applicable law and regulations of the Securities and
Exchange Commission and Nasdaq. In addition all members of the Audit
Committee meet the additional independence standards applicable to its
members.
The Audit Committee (whose members are Mr. Baumgartner, Mr. Herbert, Mr.
O'Connell, Dr. Steer and Mr. Higgins) operates under a written charter
established by the Company's Board of Directors. A copy of the charter is
available for review at the Company's website, www.techne-corp.com. The
Audit Committee is responsible for the appointment and supervision of the
Company's independent registered public accounting firm and for reviewing the
Company's internal audit procedures, the quarterly and annual financial
statements of the Company and the results of the annual audit. The Audit
Committee also pre-approves all related party transactions, establishes and
oversees the implementation of the Company's cash investment policy and
monitors the Company's financial fraud hotline. The Board of Directors has
determined that for fiscal 2009 all Audit Committee members are "audit
committee financial experts" as such term is defined in Section 407 of the
Sarbanes-Oxley Act, and all such members are "independent" under applicable
law and regulations of the SEC and Nasdaq. The Audit Committee met six times
during fiscal 2009. The Committee's report is included in this Proxy
Statement.
The Executive Compensation Committee (whose members are Mr. Herbert, Mr.
O'Connell, Mr. Baumgartner, Dr. Steer and Mr. Higgins) determines
compensation for executive officers of the Company. The Committee operates
under a written charter. A copy of the charter is available for review at the
Company's website, www.techne-corp.com. The Executive Compensation Committee
establishes both over-all policies for executive compensation and reviews the
performance of the executive officers. The Committee works with Mr. Oland,
the Chief Executive Officer of the Company, to establish performance goals
for the other executive officers and, acting independently, establishes the
performance goals for Mr. Oland. The Committee determines the annual base
compensation of all officers and awards bonuses, both cash and equity, to all
officers based on performance. The Committee met once during fiscal 2009.
The Committee's report is included in this Proxy Statement.
6
The Nominations and Governance Committee is composed of all "independent"
directors, currently all directors except Mr. Oland. The Committee operates
under a written charter. A copy of the charter is available for review at
the Company's website, www.techne-corp.com. The Committee, meeting as part
of the July 2009 Board meeting, has recommended to shareholders the re-
election of the incumbent directors of the Company, with the exception of Mr.
Herbert, at the 2009 Annual Meeting. Mr. Herbert is retiring from the Board
and not standing for re-election. The functions of the Committee are to
recruit well-qualified candidates for the Board, select persons to be
proposed in the Company's proxy statement for election as directors at annual
meetings of shareholders, and establish governance standards and procedures
to support and enhance the performance and accountability of management and
the Board. The Nominations and Governance Committee assesses the appropriate
size of the Board of Directors, and whether any vacancies on the Board are
expected due to retirement or otherwise. In the event that vacancies are
anticipated, or otherwise arise, the Nominations and Governance Committee
considers various potential candidates for director. Candidates may come to
the attention of the Committee through current members of the Board of
Directors, professional search firms, stockholders or other persons and may
be considered at any point during the year. The Nominations and Governance
Committee utilizes a variety of methods for identifying and evaluating
nominees for director. Candidates for the Board are considered and selected
on the basis of outstanding achievement in their professional careers,
experience, wisdom, personal and professional integrity, their ability to
make independent, analytical inquiries, and their understanding of the
business environment. Candidates must have the experience and skills
necessary to understand the principal operational and functional objectives
and plans of the Company, the results of operations and financial condition
of the Company, and the position of the Company in its industry. Candidates
must have a perspective that will enhance the Board's strategic discussions
and be capable of and committed to devoting adequate time to Board duties.
The Committee will consider all nominees for director recommended by
shareholders of the Company, applying the same criteria as is used for
nominees recommended by other sources. Recommendations may be sent to the
Committee at the Company's address: 614 McKinley Place N.E., Minneapolis, MN
55413. The Committee met once during fiscal 2009.
Compensation of Directors
Directors who are not employees of the Company were compensated for the
year ended June 30, 2009 as follows:
Fees Earned
or Paid in Option
Name Cash (1) Awards (2) Total
------------------------------ ----------- ---------- ---------
Roger C. Lucas, Ph.D. $25,000 $153,500 $178,500
Howard V. O'Connell 27,000 153,500 180,500
G. Arthur Herbert 27,000 153,500 180,500
Randolph C. Steer, M.D., Ph.D. 27,000 153,500 180,500
Robert V. Baumgartner 27,000 153,500 180,500
Charles A. Dinarello, M.D. 25,000 153,500 178,500
Karen A. Holbrook, Ph.D. 25,000 153,500 178,500
John L. Higgins 3,000 112,000 115,000
---------------
(1) Amounts consist of the annual retainer and meeting fees for services as
members of the Company's Board of Directors. For further information
concerning such fees, see information following this table.
(2) Amounts represent compensation expense recognized in fiscal 2009
related to stock option awards that vested in fiscal 2009 calculated in
accordance with Statement of Financial Accounting Standard No. 123
(revised 2004) (SFAS No. 123R). Assumptions used in the calculation of
these amounts are described in Note I to the Company's audited
financial statements for the fiscal year ended June 30, 2009, included
in the Company's Annual Report on Form 10-K that was filed with the
Securities and Exchange Commission on August 28, 2009. Pursuant to the
Company's 1998 Nonqualified Stock Option Plan, each of the above
directors, with the exception of Mr. Higgins, received an automatic
option grant for 5,000 shares of Company Common Stock on the date of
the 2008 Annual Shareholder Meeting. Mr. Higgins received options to
purchase 10,000 shares of the Company's Common Stock upon his
appointment to the Board in fiscal 2009 of which 5,000 vested in fiscal
2009 and 5,000 will vest in fiscal 2010. As of June 30, 2009, the
following non-employee directors held options to purchase the following
number of shares of the Company's Common Stock: Dr. Lucas - 30,000;
Mr. O'Connell - 48,000; Mr. Herbert - 50,000; Dr. Steer - 10,000; Mr.
Baumgartner - 30,000; Dr. Dinarello - 21,500; Dr. Holbrook - 20,000;
Mr. Higgins - 10,000.
7
Fees for non-employee directors include $25,000 per year for service on
the Board and Committees of the Board. Directors are paid an additional
$1,000 for each meeting of the Board other than its regularly scheduled
quarterly meetings and for each meeting of a committee on which the director
serves other than committee meetings held in conjunction with a meeting of
the full Board. If appointed to the Board or retired during the fiscal
year, the non-employee director receives a prorated annual fee.
Under the Company's 1998 Nonqualified Stock Option Plan, non-employee
directors automatically receive options to purchase 5,000 shares of Company
Common Stock upon each re-election to the Board. The options have a term of
10 years and vest immediately. Upon initial election or appointment to the
Board, new non-employee directors receive options, which vest immediately,
for 5,000 shares of the Company's Common Stock prorated based on the time
remaining until the next annual meeting of shareholders. Mr. Higgins, at the
Compensation Committee's discretion, received options to purchase 10,000
shares of the Company's Common Stock upon his appointment to the Board in
fiscal 2009. The additional shares were in recognition of his
qualifications, including his industry background and experience as chief
executive and chief financial officer of various biopharmaceutical companies.
Half of the options vested immediately upon his appointment to the Board and
the remaining 5,000 options vest on the first anniversary date of his
appointment. All non-employee directors elected at the Company's 2009 Annual
Meeting of Shareholders will receive options to purchase 5,000 shares of
Common Stock with an exercise price equal to the fair market value on the
date of the 2009 Annual Meeting.
Shareholder Communications with Directors
Shareholders may communicate directly with the Board of Directors. All
communications should be directed to the Company at 614 McKinley Place N.E.,
Minneapolis, MN 55413, and should prominently indicate on the outside of the
envelope that it is intended for the Board of Directors, for non-management
directors, or for a particular director. Unless other distribution is
specified, the communication will be forwarded to the entire Board. The
communication will not be opened before being forwarded to the intended
recipient, but it will go through normal security procedures.
Code of Ethics and Business Conduct and Financial Fraud Hotline
The Company has adopted a Code of Ethics and Business Conduct, which is
applicable to all directors, officers and employees of the Company. A copy
is available for review at the Company's website, www.techne-corp.com. The
Company sponsors a financial fraud hotline that is available to all
employees, is operated on a confidential basis by a third party, and is
supervised with full powers of investigation by the Audit Committee of the
Board of Directors.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of the Board of Directors of the
Company is composed of directors G. Arthur Herbert, Howard V. O'Connell, Dr.
Randolph C. Steer, Robert V. Baumgartner, and John L. Higgins. None of the
members of the Executive Compensation Committee was an officer or employee of
the Company during fiscal 2009, or was formerly an officer of the Company.
None of the members of the Executive Compensation Committee had any
relationship requiring disclosure as a related party transaction. No
executive officer of the Company during fiscal 2009, served on the
Compensation Committee or the board of any company that employed any member
of the Company's Executive Compensation Committee or Board of Directors.
8
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Overview
The Executive Compensation Committee of the Board of Directors is
responsible for establishing the compensation programs of the Company's Chief
Executive Officer and other executive officers, including but not limited to
the executive officers named in the summary compensation table of this Proxy
Statement (the "Named Executive Officers"). The Committee participates in
the consideration and employment of prospective executive officers of the
Company. The Committee also administers the Company's stock option plans and
has the authority to grant options to purchase shares of the Company's Common
Stock, and to determine all terms and conditions of such options.
Compensation Objectives
The Executive Compensation Committee has designed the compensation
packages of the Company's executive officers to achieve the following
objectives:
- to recruit and retain highly qualified executive officers by offering
overall compensation that is competitive with that offered for
comparable positions in the local market;
- to motivate executives to achieve important business and individual
performance objectives and to reward them when such goals are met;
and
- to align the interest of executive officers with the long-term
interest of stockholders through participation in the Company's stock
option plans.
The Executive Compensation Committee is responsible for assuring that
compensation for the executive officers is consistent with our compensation
philosophy. The Executive Compensation Committee reviews the compensation
philosophy and trends in the local market to ensure that the executive
compensation program is competitive and attracts and retains talented
management, motivates the executives to achieve short term and long term
corporate objectives, and aligns the motivation and interests of the
executives with the interests of the Company's shareholders. The Executive
Compensation Committee also administers the Company's equity-based
compensation and performance-based bonus plan for the executive officers.
The Executive Compensation Committee reviews and approves each executive's
base pay, bonus, and equity incentives annually.
The Committee views the various components of its compensation program as
related, but distinct. Although the Executive Compensation Committee does
review and consider total compensation for each executive officer as a whole,
it does not believe that significant compensation derived from one component
should necessarily negate or reduce compensation from other components. The
Committee determines the appropriate level for each compensation component
based on overall compensation objectives. The Executive Compensation
Committee has not adopted any policies or guidelines for allocating
compensation among the different elements of the compensation program.
Role of the Chief Executive Officer in Compensation Decisions
During meetings with the Executive Compensation Committee held each year,
the Company's President and Chief Executive Officer presents to the Committee
recommendations regarding compensation for the executive officers (other than
himself). The Committee discusses the recommendations and accepts or adjusts
them, in whole or in part. The executive officers are not present during the
Committee's final discussion and determination of their compensation.
9
Elements of the Compensation Program
The Company's executive compensation program is comprised of base
salaries, annual performance bonuses comprised of both cash and stock option
components, and various benefits, including the Company's Profit Sharing and
Savings Plan and Stock Bonus Plan in which all qualified employees of the
Company participate. In addition, the Executive Compensation Committee from
time to time may award special cash bonuses or stock options related to non-
recurring, extraordinary performance. The Executive Compensation Committee
typically also awards stock options upon retention of a new executive
officer.
Base salary. The Executive Compensation Committee has followed a policy
of paying annual base salaries which are on the moderate side of being
competitive in its industry. A competitive base salary is provided to each
executive officer recognizing the skills and experience each individual
brings to the Company, the length of time with the Company and the
performance contributions each makes. Salaries are reviewed on an annual
basis and are made in connection with annual performance reviews. In July
2009, the Executive Compensation Committee approved base salaries unchanged
for fiscal 2010 from fiscal 2009 levels. Base salaries for the executive
officers for fiscal 2010 are as follows: Mr. Melsen - $275,000, Mr.
Veronneau - $167,500 and Mr. Oland - $254,100.
Performance-based bonus plan. Under the Company's Executive Officers
Incentive Bonus Plan, each executive officer may earn a potential bonus of up
to 40% of his or her annual salary. The Plan provides that 70% of the
eligible bonus is based upon achieving the Company's budgeted revenues and
earnings for the fiscal year. Bonuses are awarded on a prorated basis if
between 85% and 100% of budgeted revenues and earnings are achieved. The
remaining 30% of the eligible bonus is based upon achievement of personal
goals set for each officer. The personal goals are established annually as
recommended by the Chief Executive Officer of the Company and approved by the
Executive Compensation Committee, taking into account each executive's
responsibilities at the Company. For fiscal 2009, the Executive Compensation
Committee has determined that the Company's revenues and earnings were an
average of 93% of budget. Therefore each executive officer earned 93% of the
70% of his overall bonus. The Compensation Committee also determined that
Mr. Melsen and Mr. Veronneau earned 77% and 90% of the remaining 30% bonus,
respectively. Mr. Oland waived his bonus for fiscal 2009. Mr. Melsen waived
the portion of his fiscal 2009 bonus related to achievement of corporate
financial objectives.
The annual bonus is paid 50% in cash and 50% in stock options. The
officer may elect to exchange his or her cash portion of the bonus for
additional stock options and if so, such officer is entitled to 1.7 times the
cash value of the cash bonus in options. The number of options each executive
officer is entitled to is calculated based on the closing share price at the
date of grant. Options granted under the Plan vest immediately and the
exercise price of the options is the closing price of the Company's stock on
the date of grant. The stock option grant date is the date of the
Committee's first meeting subsequent to fiscal year-end, which coincides with
the Company's scheduled quarterly Board meeting. For fiscal 2009, following
his waiver of a portion of his bonus, Mr. Melsen was paid a cash bonus of
$12,705 and granted options in fiscal 2010 for 203 shares of Company stock.
For fiscal 2009, Mr. Verroneau was paid a cash bonus of $30,887 and was
granted options in fiscal 2010 for 494 shares of Company stock.
Other compensation. The Company provided medical and insurance benefits to
its executive officers, which are the same as those generally available to
all Company employees. The Company has a Profit Sharing and Savings Plan and
a Stock Bonus Plan in which all qualified employees, including executive
officers, participate subject to statutory limitations on contributions for
highly compensated individuals. The amount of the Company's contribution to
the plans is based on the increase in revenues and after tax earnings from
the prior fiscal year. For fiscal 2009, the profit sharing percentage was
approximately 3.34%. The Company contributed to each of the Profit Sharing
and Savings Plan and the Stock Bonus Plan an amount equal to 1.67% of total
gross wages, respectively. The contribution to the Stock Bonus Plan is in
the form of Company common stock. The Company does not provide any other
significant perquisites or executive benefits to its Named Executive
Officers.
10
Accounting and Tax Treatment
The Company accounts for equity-based compensation paid to employees under
SFAS No. 123R promulgated by the Financial Accounting Standards Board, which
requires the Company to estimate and record an expense over the service
period of an option award. Thus, the Company may record an expense in one
year for awards granted in earlier years. Accounting rules also requires the
recording of cash compensation as an expense at the time the obligation is
accrued.
Section 162(m) of the Internal Revenue Code of 1986 generally disallows a
tax deduction to public companies for compensation in excess of $1 million
paid to the company's chief executive officer and four other most highly-paid
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limitation if certain requirements are met. Because
the potential amount of base salary and non-equity-based incentive
compensation that the executive officers can earn is less than $1 million,
Section 162(m) has not been material to the Executive Compensation Committee
decisions.
Compensation Committee Report
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving total compensation programs and levels for the
Company's Chief Executive Officer and its executive officer group, which
includes the Named Executive Officers shown in the Summary Compensation Table
below. The Committee's responsibilities are specified in the Compensation
Committee Charter.
The Committee reviewed and discussed the Executive Compensation Discussion
and Analysis above with management. Based on the Committee's review and its
discussions with management, the Committee recommended to the Board of
Directors that the Executive Compensation Discussion and Analysis be included
in the Company's Proxy Statement for the 2009 Annual Meeting.
G. Arthur Herbert
Howard V. O'Connell
Randolph C. Steer, M.D., Ph.D.
Robert V. Baumgartner
John L. Higgins
Members of the Compensation Committee
11
Summary Compensation Table
The Named Executive Officers received the following compensation for the
fiscal years ended June 30, 2009, 2008 and 2007:
Non-Equity
Incentive All Other
Name and Fiscal Option Plan Com- Compen-
Principal Position Year Salary(1) Awards(2) pensation(3) sation(4) Total
------------------ ------ --------- --------- ------------ --------- --------
Thomas E. Oland, 2009 $254,100 $ 0(5) $ 0(5) $ 7,772 $261,872
CEO and President 2008 254,100 0(5) 0(5) 35,878 289,978
2007 254,100 0(5) 0(5) 23,804 277,804
Gregory J. Melsen, 2009 275,000 12,981 12,705(6) 7,772 308,458
Vice President - 2008 260,000 43,234(7) 47,320 35,878 386,342
Finance and CFO 2007 245,000 123,207(8) 44,541 23,804 436,552
Marcel Veronneau, 2009 167,500 8,385 30,887 6,964 213,736
Vice President - 2008 160,000 9,751 30,560 30,112 230,423
Hematology 2007 155,000 10,728 29,016 19,782 214,526
Operations
---------------
(1) Includes amounts deferred under the Company's Profit Sharing and Savings
Plan, a qualified deferred compensation plan under section 401(k) of the
Internal Revenue Code.
(2) Amounts shown above represent amounts recognized for financial statement
reporting in the respective fiscal year as determined pursuant to
provisions of Statement of Financial Accounting Standards No. 123
(revised 2004), "Share-Based Payments" and thus may include amounts from
awards granted in and prior to the respective fiscal year. Assumptions
used in the calculation of these amounts are described in Note I to the
Company's audited financial statements for the fiscal year ended June
30, 2009, included in the Company's Annual Report on Form 10-K that was
filed with the Securities and Exchange Commission on August 28, 2009.
(3) Represents cash bonuses earned under the Company's Executive Officer's
Incentive Bonus Plan in the respective fiscal year that were determined
and paid in the subsequent fiscal year.
(4) For each individual the amounts for fiscal 2007 and 2009 reflect profit
sharing for fiscal 2007 and 2009, respectively, contributed in the
following fiscal year to the Profit Sharing and Savings Plan (as to one-
half) and contributed in the following fiscal year to the Stock Bonus
Plan in the form of shares of the Company's Common Stock (as to one-
half). For each individual the amount for fiscal 2008 reflects profit
sharing for fiscal 2008 contributed in fiscal 2009 to the Profit Sharing
and Savings Plan (as to one-third) contributed in fiscal 2009 to the
Stock Bonus Plan in the form of shares of the Company's Common Stock (as
to one-third), and paid in cash in fiscal 2009 (as to one-third).
(5) Mr. Oland waived his cash and stock option bonus under the Company's
Executive Officer's Incentive Bonus Plan.
(6) Mr. Melsen waived $35,860 of his earned cash bonus, or that portion of
his cash bonus relating to the achievement of corporate financial
objectives.
(7) Represents $14,971 related to options granted in fiscal 2008 and $28,263
related to options granted at initial date of employment in fiscal 2005.
(8) Represents $19,147 related to options granted in fiscal 2007 and
$104,060 related to options granted at initial date of employment in
fiscal 2005.
12
Grants of Plan-Based Awards
The following table sets forth certain information with respect to grants
of plan-based awards for the Named Executive Officers during fiscal 2009.
Exercise
or Base Grant
Estimated Payouts Under Estimated Payouts Under Price of Date
Non-Equity Incentive Equity Incentive Option Fair
Plan Awards (1) Plan Awards (#) (2) Awards Value of
Grant --------------------------- --------------------------- (per Option
Name Date Threshold Target(3) Maximum Threshold Target(4) Maximum share) Awards
------------------ ------ --------- --------- ------- --------- --------- ------- -------- --------
Thomas E. Oland $0 $50,820 $50,820 -- -- -- -- --
7/25/08 -- -- -- 0 639 639 -- --
Gregory J. Melsen 0 52,000 52,000 -- -- -- -- --
7/25/08 -- -- -- 0 654 654 $79.41 $12,981
Marcel Veronneau 0 32,000 32,000 -- -- -- -- --
7/25/08 -- -- -- 0 402 402 79.41 8,385
---------------
(1) Represents potential cash bonuses earned under the Company's Executive
Officer's Incentive Bonus Plan for fiscal 2008 which were paid in fiscal
2009. The actual amounts earned and paid under such Plan were: Mr. Oland
- $0 (waived); Mr. Melsen - $47,320; Mr. Veronneau - $30,560.
(2) Represents potential stock options earned under the Company's Executive
Officer's Incentive Bonus Plan for fiscal 2008 which were granted in
fiscal 2009. The grant date fair value calculated in accordance with
SFAS No. 123R was $21.78 per share. The actual number of options granted
was: Mr. Oland - 0 (waived); Mr. Melsen - 596; Mr. Veronneau - 385.
(3) It is assumed that annual budget revenues and earnings will be met and
personal objectives achieved. Therefore, targeted and maximum potential
compensation are the same.
(4) Targeted share grants are calculated based on closing share price at date
of grant. See (3) above.
Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding stock options held by the Named
Executive Officers on June 30, 2009. As of June 30, 2009, none of the Named
Executive Officers held unearned equity incentive plan awards. The Company
has not granted any stock awards.
Number of
Securities
Underlying
Unexercised Option Option
Options Exercise Expiration
Name Exercisable Price Date
-------------------- ----------- -------- ----------
Thomas E. Oland 0 -- --
Gregory J. Melsen 426 $51.60 8/17/2012
1,012 49.43 7/26/2013
783 56.83 7/26/2014
25,000 39.53 12/16/2014
596 79.41 7/24/2015
Marcel Veronneau 670 33.85 8/13/2010
15,000 37.01 11/30/2010
505 40.47 7/08/2011
475 51.60 8/17/2012
567 49.43 7/26/2013
510 56.83 7/26/2014
385 79.41 7/24/2015
13
Option Exercises
The following table shows options exercised by the Named Executive
Officers during fiscal 2009. The value realized on exercise is equal to the
difference between the market price of the underlying shares at the date of
exercise and the exercise price of the options.
Option Awards
----------------------------------
Number of Shares
Acquired on Value Realized
Name Exercise On Exercise
--------------------- ---------------- --------------
Thomas E. Oland 0 $ 0
Gregory J. Melsen 0 0
Marcel Veronneau 785 27,742
Employment Contracts and Change in Control Arrangements
The Company has a formal employment agreement effective through June 30,
2010 with Mr. Veronneau. The agreement provides for a base salary subject
to annual review, bonuses as described above, benefits as provided to all
employees and severance compensation under certain circumstances. The
severance payment is triggered if employment with the Company is terminated
in connection with a merger, sale, or change in control of the Company. A
"change in control" means the acquisition in one or more transactions by a
single party, or any number of parties acting in concert, of a majority of
the outstanding shares of voting stock of the Company. Mr. Veronneau's
severance compensation is the lesser of one month of salary for each full
year of employment with or service to the Company or two times the annualized
compensation for the tax year preceding the year of termination. There are
no written employment agreements with Mr. Oland or Mr. Melsen.
For each Named Executive Officer, the estimated amount of potential
payments at June 30, 2009, assuming the executive's employment terminates in
connection with a merger, sale or change in control of the Company is as
follows:
Cash
Name Severance Other
-------------------- --------- -----
Thomas E. Oland $ 0 $ 0
Gregory J. Melsen 0 0
Marcel Veronneau (1) 223,333 0
---------------
(1) Based on 16 years of service with the Company.
14
AUDIT MATTERS
Audit Committee Report
The Audit Committee assists the Board of Directors with fulfilling its
oversight responsibility regarding the quality and integrity of the
accounting, auditing and financial reporting practices of the Company. In
discharging its oversight responsibilities regarding the audit process, the
Audit Committee:
- reviewed and discussed the audited financial statements with
management;
- discussed with the Company's independent registered public accounting
firm the material required to be discussed by Statement on Auditing
Standards No. 61, as amended;
- received the written disclosures and the letter from the independent
registered public accounting firm required by applicable requirements
of the Public Company Accounting Oversight Board regarding the
independent registered public accounting firm's communications with
the audit committee concerning independence; and
- discussed with the independent registered public accounting firm the
independent public accounting firm's independence.
Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 2009 as filed with the Securities and
Exchange Commission.
Robert V. Baumgartner, C.P.A.
G. Arthur Herbert
Howard V. O'Connell
Randolph C. Steer, M.D., Ph.D.
John L. Higgins
Members of the Audit Committee
15
Independent Registered Public Accountants
KPMG LLP acted as the Company's independent registered public accounting
firm for fiscal 2009 and 2008. Representatives of KPMG LLP are expected to
be present at the Annual Meeting, will have the opportunity to make any
desired comments, and will be available to respond to appropriate questions.
The appointment of an independent registered public accounting firm for the
fiscal 2010 has not yet been made, but will be made on or near the date of
the Annual Meeting.
Audit Fees
The following fees were paid or payable to KPMG LLP for the fiscal years
ended June 30, 2009 and 2008:
2009 2008
-------- --------
Audit Fees $472,000 $440,000
Audit-Related Fees 0 0
Tax Fees 86,000 79,000
All Other Fees 10,000 0
"Audit Fees" are for professional services rendered and expenses incurred
for the audit of the Company's annual financial statements and review of
financial statements included in our Forms 10-K and 10-Q or services that are
normally provided by the accountant in connection with statutory and
regulatory filings or engagements. Audit fees also included fees incurred for
the audit of the effectiveness of internal control over financial reporting.
"Tax Fees" included fees for services provided and expenses incurred in
connection with preparation of the Company's tax returns in the United States
and the United Kingdom.
"Other Fees" in fiscal 2009 were for a computer forensic audit.
Pre-Approval Policies and Procedures
Pursuant to its written charter, the Audit Committee of the Company's
Board of Directors is required to pre-approve the audit and non-audit
services performed by the Company's independent registered public accounting
firm in order to assure that the provision of such services does not impair
the firm's independence. Annual tax services are reviewed and approved by
the Audit Committee prior to the commencement of such services. The Audit
Committee has authorized Company officers to engage KPMG in permitted non-
audit and tax services that involve less than $25,000 in fees in the
aggregate. Such services are approved quarterly by the Audit Committee. All
of the services rendered by KPMG in fiscal 2009 and 2008 were pre-approved by
the Audit Committee.
16
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10
percent of the Company's Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Officers, directors, and greater than 10 percent shareholders ("Insiders")
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based on a review of the copies of such
reports furnished to the Company, during the fiscal year ended June 30, 2009,
all Section 16(a) filing requirements applicable to Insiders were met.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2010 Annual Meeting must be received by the
Company at its offices by May 25, 2010 to be eligible for inclusion in the
Company's Proxy Statement and related Proxy for the 2010 Annual Meeting. For
a discussion of policies and procedures related to shareholder
recommendations of candidates for director, please see the section on the
Nominations and Governance Committee discussed previously under Directors'
Meetings and Committees.
Also, if a shareholder proposal intended to be presented at the 2010
Annual Meeting but not included in the Company's Proxy Statement and Proxy is
received by the Company after August 9, 2010, then management named in the
Company's Proxy for the 2010 Annual Meeting will have discretionary authority
to vote the shares represented by such proxies on the shareholder proposal,
if presented at the meeting, without including information about the proposal
in the Company's proxy materials.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
meeting. If any other matter does properly come before the meeting, the
appointees named in the Proxies will vote the Proxies in accordance with
their best judgment.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 2009, including consolidated financial statements, accompanies
this Notice of Annual Meeting and Proxy Statement. No portion of the Annual
Report is incorporated herein or is to be considered proxy-soliciting
material.
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2009, TO ANY SHAREHOLDER OF THE
COMPANY UPON WRITTEN REQUEST. REQUESTS SHOULD BE SENT TO PRESIDENT, TECHNE
CORPORATION, 614 MCKINLEY PLACE N.E., MINNEAPOLIS, MINNESOTA 55413.
Dated: September 22, 2009
Minneapolis, Minnesota
17
TECHNE CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints THOMAS E. OLAND and KATHLEEN BACKES, or
either of them acting alone, with full power of substitution, as proxies to
represent and vote, as designated below, all shares of Common Stock of Techne
Corporation registered in the name of the undersigned, at the Annual Meeting
of the Shareholders to be held on Thursday, October 29, 2009 at 3:30 p.m.
Central Daylight Time, at the offices of the Company, 614 McKinley Place
N.E., Minneapolis, Minnesota, and at all adjournments of such meeting. If
you need directions to the Annual Meeting, please contact Techne Corporation
at 612-379-8854.
The undersigned hereby revokes all proxies previously granted with respect to
such meeting.
The Board of Directors recommends that you vote "FOR" the following
proposals:
(1) To set the number of Directors at eight:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) To elect Directors:
[ ] FOR ALL [ ] WITHHOLD ALL [ ] FOR ALL EXCEPT
Nominees:
1) Thomas E. Oland
2) Roger C. Lucas, PhD
3) Howard V. O'Connell
4) Randolph C Steer MD PhD
5) Robert V. Baumgartner
6) Charles A. Dinarello MD
7) Karen A. Holbrook, PhD
8) John L. Higgins
(To withhold authority to vote for any individual nominee(s), mark "For
All Except" and write the name(s) of the nominee on the line below.)
___________________________________________________________
(3) Other matters: In their discretion, the appointed proxies are
authorized to vote upon such other business as may properly come before
the Meeting or any adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH
PROPOSAL.
Date_________________________, 2009
_________________________________________
_________________________________________
PLEASE DATE AND SIGN ABOVE exactly as
name appears at the left, indicating,
where appropriate official position or
representative capacity. If stock is
held in joint tenancy, each joint owner
should sign.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL MEETING:
The Notice and Proxy Statement and 2009 Annual Report to Shareholders
are available at www.proxyvote.com