SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
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[ ] Preliminary Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Techne Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing:
1) Amount Previously Paid:
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4) Date Filed:
TECHNE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
October 23, 2008
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 23, 2008,
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 12, 2008 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 18, 2008
Minneapolis, Minnesota
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON OCTOBER 23, 2008:
The Proxy Statement and 2008 Annual Report to Shareholders are
available at http://ww3.ics.adp.com/streetlink/tech
TECHNE CORPORATION
__________
PROXY STATEMENT
for
Annual Meeting of Shareholders
To Be Held October 23, 2008
__________
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 23, 2008 and at any adjournment thereof, for the purposes set forth
in the attached Notice of Annual Meeting. The Notice of Annual Meeting,
Proxy Statement, 2008 Annual Report to Shareholders and proxy card are being
mailed to stockholders on or about September 18, 2008.
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 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. The mailing address of the Company's principal
executive office is 614 McKinley Place N.E., Minneapolis, MN 55413.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 12, 2008 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 12,
2008, 38,606,857 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 12, 2008:
Amount and
Name and Address Nature of Shares Percent
of Beneficial Owner Beneficially Owned(1) of Class(2)
------------------------------------ --------------------- -----------
Morgan Stanley Investment
Management, Inc 5,394,107 (3) 14.0%
1585 Broadway
New York, NY 10036
Thomas E. Oland 1,551,645 (4)(5) 4.0%(4)
614 McKinley Place N.E.
Minneapolis, MN 55413
---------------------------
(1) Unless otherwise indicated, the person listed as the beneficial owner
of the shares has sole voting and sole investment power over the
shares.
(2) Shares not outstanding but deemed beneficially owned by virtue of the
right of a person to acquire them as of September 12, 2008, or within
sixty days of such date are treated as outstanding only when
determining the percent owned by such individual and when determining
the percent owned by the group.
(3) Sole voting power over 5,163,201 shares. Shared voting power over 233
shares.
(4) Does not include 686,522 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 Management Shareholding table. The Company's
Board of Directors, acting by a majority vote, currently directs the
Trustee, Marshall and Ilsley Trust Company, N.A., as to the voting of
such shares. Including such 686,522 shares, Mr. Oland, a director of
the Company, beneficially owns 2,238,167 shares or 5.8% of total shares
outstanding plus shares subject to options exercisable by him.
(5) Includes 1,185,420 shares owned directly, 91,745 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.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of September 12, 2008, 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
4.0% 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 7.2% of total shares outstanding plus shares subject to
options exercisable by them.
2
Name of Director or Number of Shares
Executive Officer Group Beneficially Owned(1)
------------------------------- -----------------------
Thomas E. Oland 1,551,645 (2)
Roger C. Lucas, Ph.D 26,456 (3)(4)(5)
Howard V. O'Connell 178,389 (3)(4)(6)
G. Arthur Herbert 209,360 (3)(4)(7)
Randolph C. Steer, M.D., Ph.D. 5,000 (3)(4)(8)
Robert V. Baumgartner 26,000 (3)(4)(9)
Charles A. Dinarello, M.D. 16,500 (3)(4)(10)
Karen A. Holbrook, Ph.D. 15,000 (3)(4)(11)
Marcel Veronneau 56,375 (12)
Gregory J. Melsen 28,293 (13)
Officers and directors as
a group (10 persons) 2,792,448 (14)
--------------------
(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 12,
2008.
(2) See Note (4) and (5) to the preceding table.
(3) Does not include 778,267 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 as to the voting of such shares.
(4) Does not include an 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 reelected as a director of the Company.
(5) Includes 1,456 shares owned directly and 25,000 shares subject to stock
options.
(6) Includes 135,389 shares owned by trusts of which Mr. O'Connell is a
trustee and beneficiary and 43,000 shares subject to options.
(7) Includes 11,000 shares owned by Mr. Herbert's wife, 153,360 shares held
by trusts and partnership of which Mr. Herbert is a trustee or partner
and 45,000 shares subject to options.
(8) Includes 5,000 shares subject to options.
(9) Includes 1,000 shares owned directly and 25,000 shares subject to
options.
(10) Includes 16,500 shares subject to options.
(11) Includes 15,000 shares subject to options.
(12) Includes 30,862 shares owned directly, 6,616 shares held by the
Company's Stock Bonus Plan for Mr. Veronneau's account and 18,897
shares subject to options.
(13) Includes 476 shares held by the Company's Stock Bonus Plan for Mr.
Melsen's account and 27,817 shares subject to options.
(14) Includes 778,267 shares held by the Company's Stock Bonus Plan as to
which the Company's Board of Directors directs the voting and 221,214
shares which may be purchased pursuant to 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 OF THE COMPANY RECOMMENDS 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 successor is duly elected and qualified. All of the
nominees are members of the present Board of Directors. All directors 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 67 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. 65 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 78 Director Private investor since 1985
1990. Chairman,
President and Treasurer
of John G. Kinnard and
Company, Incorporated, a
securities broker-dealer,
from 1969 to 1990.
G. Arthur Herbert 82 Director Principal of CEO Advisors, 1989
a management and financial
consulting firm, since
1989.
4
Current
Position(s) Principle Occupation(s) Director
Name Age with Company During Past Five Years Since
--------------------- --- --------------- ------------------------ --------
Randolph C. Steer, 58 Director Consultant to the 1990
M.D., Ph.D. pharmaceutical and
biotechnology industries
since 1989; Director of
BioCryst Pharmaceuticals,
Inc.
Robert V. 52 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, 65 Director Professor of Medicine at 2005
M.D the University of Colorado
School of Medicine in
Denver, Colorado since 1996.
Karen A. Holbrook, 65 Director Vice President for Research 2007
Ph.D. and Innovation, University
of South Florida, since
2007; Former President of
The Ohio State University
from 2002 to 2007. 2007
CORPORATE GOVERNANCE
Board Independence
The Board has determined that all of the Company's non-employee directors
(Mr. O'Connell, Mr. Herbert, Mr. Baumgartner, Dr. Lucas, Dr. Steer, Dr.
Dinarello and Dr. Holbrook) 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 our 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.
During fiscal 2008, 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 2008 was $137,000. 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 2008, 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. 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 2007.
5
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 and Dr. Steer) 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 2008 all Audit Committee members are "audit committee
financial experts" as such term is defined in Section 407 of the Sarbanes-
Oxley Act. The Audit Committee met six times during fiscal 2008. The
Committee's report is included in this Proxy Statement.
The Executive Compensation Committee (whose members are Mr. Herbert, Mr.
O'Connell, Mr. Baumgartner and Dr. Steer) 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 twice during fiscal 2008.
The Committee's report is included in this Proxy Statement.
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 2008 Board meeting, has recommended to shareholders the re-
election of the incumbent directors of the Company at the 2008 Annual
Meeting. 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. Recommendations may be sent to the Committee at the Company's
address: 614 McKinley Place N.E., Minneapolis, MN 55413.
6
Compensation of Directors
Directors who are not employees of the Company were compensated for the
year ended June 30, 2008 as follows:
Fees Earned
or Paid in Option
Name Cash (1) Awards (2) Total
------------------------------ ----------- ---------- ---------
Roger C. Lucas, Ph.D. $25,000 $185,600 $210,600
Howard V. O'Connell 27,000 185,600 212,600
G. Arthur Herbert 27,000 185,600 212,600
Randolph C. Steer, M.D., Ph.D. 27,000 185,600 212,600
Robert V. Baumgartner 27,000 185,600 212,600
Charles A. Dinarello, M.D. 25,000 185,600 210,600
Karen A. Holbrook, Ph.D. 25,000 281,500 306,500
----------------
(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 the below.
(2) Amounts represent compensation expense recognized in fiscal 2008
related to stock option awards that vested in fiscal 2008 calculated in
accordance with Statement of Financial Accounting Standard No. 123
(revised 2004) (SFAS No. 123R). Pursuant to the Company's 1998
Nonqualified Stock Option Plan, each of the above directors received an
automatic option grant for 5,000 shares of Company Common Stock on the
date of the 2007 Annual Shareholder Meeting. Dr. Holbrook received
options to purchase 10,000 shares of the Company's Common Stock upon
her appointment to the Board in fiscal 2007 of which 5,000 vested
during the year ended June 30, 2008. As of June 30, 2008, the
following non-employee directors held options to purchase the following
number of shares of the Company's Common Stock: Dr. Lucas - 25,000;
Mr. O'Connell - 45,000; Mr. Herbert - 45,000; Dr. Steer - 15,000; Mr.
Baumgartner - 25,000; Dr. Dinarello - 16,500; Dr. Holbrook - 15,000.
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. Dr. Holbrook, at
the Compensation Committee's discretion, received options to purchase 10,000
shares of the Company's Common Stock upon her appointment to the Board in
fiscal 2007. The additional shares were in recognition of her strong
scientific background. Half of the options vested immediately upon her
appointment to the Board and the remaining 5,000 options vested on the first
anniversary date of her appointment. All non-employee directors elected at
the Company's 2008 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 2008 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.
7
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, and Robert V. Baumgartner. None of the members of the
Executive Compensation Committee was an officer or employee of the Company
during fiscal 2008, and no executive officer of the Company during fiscal
2008, 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.
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. 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.
8
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.
Elements of the Compensation Program
The Company's executive compensation program is comprised of base
salaries, annual performance bonuses comprised of both a cash and stock
option component, 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
2008, the Executive Compensation Committee approved the base salary for the
executive officers for fiscal 2009 as follows: Mr. Melsen - $275,000 and Mr.
Veronneau - $167,500. Mr. Oland again waived an increase, leaving his base
salary at $254,100 for fiscal 2009.
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. 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 are 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 2008, the Executive Compensation Committee has determined that the
Company's revenues and earnings were an average of 107% of budget. Therefore
each executive officer earned 100% of the 70% of his or her overall bonus.
The Compensation Committee also determined that Mr. Melsen and Mr. Veronneau
earned 70% and 85% of the remaining 30% bonus respectively.
9
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 2008, the profit sharing percentage was
approximately 12.5%. The Company contributed to each of the Profit Sharing
and Savings Plan and the Stock Bonus Plan an amount equal to 5.0% of total
gross wages, respectively. The contribution to the Stock Bonus Plan is in
the form of Company common stock. The remaining 2.5% of the fiscal 2008
profit sharing percentage, plus an additional one-time 2.5% bonus was paid to
qualified employees, including executive officers, as a cash bonus. The
Company does not provide any other significant perquisites or executive
benefits to its Named Executive Officers.
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. The Company adopted SFAS No. 123R
on July 1, 2005 and, therefore, fiscal 2006 was the first year in which
expense was recorded related to employee stock options. 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 recommends to the Board of
Directors that the Executive Compensation Discussion and Analysis be included
in the Company's Proxy Statement for the 2008 Annual Meeting.
G. Arthur Herbert
Howard V. O'Connell
Randolph C. Steer, M.D., Ph.D.
Robert V. Baumgartner
Members of the Compensation Committee
10
Summary Compensation Table
The Named Executive Officers received the following compensation for the
fiscal years ended June 30, 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, 2008 $254,100 $ 0(5) $ 0(5) $35,878 $289,978
CEO and President 2007 254,100 0(5) 0(5) 23,804 277,804
Gregory J. Melsen, 2008 $260,000 $ 43,234(6) $47,320 $35,878 $386,342
Vice President - 2007 245,000 123,207(7) 44,541 23,804 436,552
Finance and CFO
Marcel Veronneau, 2008 $160,000 $ 9,751 $30,560 $30,112 $230,423
Vice President - 2007 155,000 10,728 29,016 19,782 214,526
Hematology
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 include amounts from
awards granted in and prior to fiscal 2008. 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, 2008,
included in the Company's Annual Report on Form 10-K that was filed with
the Securities and Exchange Commission on August 28, 2008.
(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 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). For each
individual the amount for fiscal 2007 reflects profit sharing
contributed in fiscal 2008 to the Profit Sharing and Savings Plan (as to
one-half) and contributed in fiscal 2008 to the Stock Bonus Plan in the
form of shares of the Company's Common Stock (as to one-half).
(5) Mr. Oland waived his cash and stock option bonus under the Company's
Executive Officer's Incentive Bonus Plan.
(6) Represents $14,971 related to options granted on July 27, 2007 and
$28,263 related to options granted at initial date of employment in
December 2004.
(7) Represents $19,147 related to options granted on July 27, 2006 and
$104,060 related to options granted at initial date of employment in
December 2004.
11
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 2008.
All Other Exercise
Option or Base Grant
Estimated Payouts Under Estimated Payouts Under Awards: Price of Date
Non-Equity Incentive Equity Incentive Number of Option Fair
Plan Awards (1) Plan Awards (#) (2) Shares Awards Value of
Grant --------------------------- --------------------------- Underlying (per Option
Name Date Threshold Target(3) Maximum Threshold Target(4) Maximum Options share) Awards
------------------ ------ --------- --------- ------- --------- --------- ------- ---------- -------- --------
Thomas E. Oland $0 $50,820 $50,820 -- -- -- -- -- --
7/27/07 -- -- -- 0 894 894 -- -- --
Gregory J. Melsen $0 $49,000 $49,000 -- -- -- -- -- --
7/27/07 -- -- -- 0 862 862 -- $56.83 $14,971
Marcel Veronneau $0 $31,000 $31,000 -- -- -- -- -- --
7/27/07 -- -- -- 0 545 545 -- $56.83 $ 9,751
----------------
(1) Represents potential cash bonuses earned under the Company's Executive
Officer's Incentive Bonus Plan for fiscal 2007 which were paid in fiscal
2008. The actual amounts earned and paid under such Plan were: Mr. Oland
- $0 (waived); Mr. Melsen - $44,541; Mr. Veronneau - $29,016.
(2) Represents potential stock options earned under the Company's Executive
Officer's Incentive Bonus Plan for fiscal 2007 which were granted in
fiscal 2008. The grant date fair value calculated in accordance with
SFAS No. 123R was $19.12 per share. The actual number of options granted
was: Mr. Oland - 0 (waived); Mr. Melsen - 783; Mr. Veronneau - 510.
(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.
12
Outstanding Equity Awards at Fiscal Year-End
The following table shows all outstanding stock options held by the Named
Executive Officers on June 30, 2008. As of June 30, 2008, none of the Named
Executive Officers held unearned equity incentive plan awards. The Company
has not granted any stock awards.
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option Option
Options Options Exercise Expiration
Name Exercisable Unexercisable Price Date
-------------------- ----------- ------------- -------- ----------
Thomas E. Oland 0 0
Gregory J. Melsen 426 0 $51.60 8/17/2012
1,012 0 49.43 7/26/2013
783 0 56.83 7/26/2014
25,000 0 39.53 12/16/2014
Marcel Veronneau 785 0 28.22 6/30/2009
670 0 33.85 8/13/2010
15,000 0 37.01 11/30/2010
505 0 40.47 7/08/2011
475 0 51.60 8/17/2012
567 0 49.43 7/26/2013
510 0 56.83 7/26/2014
Option Exercises
The following table shows options exercised by the Named Executive
Officers during fiscal 2008. The value realized on exercise is equal to the
difference between the market price of the underlying shares at exercise and
the exercise price of the options.
Option Awards
----------------------------------
Number of Shares
Acquired on Value Realized
Name Exercise (#) On Exercise ($)
--------------------- ---------------- --------------
Thomas E. Oland 0 0
Gregory J. Melsen 0 0
Marcel Veronneau 748 $30,690
Employment Contracts and Change in Control Arrangements
The Company has a formal employment agreement effective through June 30,
2010 with Mr. Veronneau. Mr. Melsen's employment agreement was effective
through June 30, 2008 and Mr. Oland serves pursuant to an oral understanding.
The agreements provide for base salaries 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 an executive's 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.
13
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. Under Mr. Melsen's agreement, which expired June 30, 2008,
severance compensation would have been equal to the base salary and benefits
which would otherwise have been paid under the terms of the employment
agreement or the base salary and benefits for twelve months from date of
termination, whichever period is longer.
For each Named Executive Officer, the estimated amount of potential
payments at June 30, 2008, 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 (1) 260,000 12,000 (2)
Marcel Veronneau (3) 200,000 0
--------------
(1) Agreement expired June 30, 2008 without payment of any compensation.
(2) Consists of medical, dental, disability and life insurance premiums.
(3) Based on 15 years of service with the Company.
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:
(1) reviewed and discussed the audited financial statements with
management;
(2) discussed with the Company's independent registered public accounting
firm the material required to be discussed by Statement on Auditing
Standards No. 114; and
(3) reviewed the written disclosures and the letter from the Company's
independent registered public accounting firm required by the
Independence Standards Board's Standard No.1, and discussed with the
independent registered public accounting firm any relationships that
may impact their objectivity and 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, 2008 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.
Members of the Audit Committee
14
Independent Registered Public Accountants
KPMG LLP acted as the Company's independent registered public accounting
firm for fiscal 2008 and 2007. Representatives of KPMG LLP are expected to
be present at the shareholders' 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 2009 has not yet been made, but will be made on or near
the date of the 2008 annual meeting of shareholders.
Audit Fees
The following fees were paid or payable to KPMG LLP for the fiscal years
ended June 30:
2008 2007
-------- --------
Audit Fees $440,000 $473,000
Audit-Related Fees 0 0
Tax Fees 79,000 66,400
All Other Fees 0 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.
Audit fees in fiscal 2007 include fees of $37,000 for services incurred in
connection with an analysis of the Company's stock option practices.
"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.
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 2008 and 2007 were pre-
approved by the Audit Committee.
SECTION 16(a) BENEFICIAL OWNERHSIP REPORTING COMPLANCE
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, 2008,
all Section 16(a) filing requirements applicable to Insiders were met.
15
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2009 Annual Meeting must be received by the
Company at its offices by May 22, 2009 to be eligible for inclusion in the
Company's Proxy Statement and related Proxy for the 2009 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 above under Committees and Meetings of
the Board.
Also, if a shareholder proposal intended to be presented at the 2009
Annual Meeting but not included in the Company's Proxy Statement and Proxy is
received by the Company after August 6, 2009, then management named in the
Company's Proxy for the 2009 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, 2008, 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, 2008, 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 18, 2008
Minneapolis, Minnesota
16
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 23, 2008 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. The
undersigned hereby revokes all proxies previously granted with respect to
such meeting.
The Nominations and Governance Committee of 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, Ph.D.
3) Howard V. O'Connell
4) G. Arthur Herbert
5) Randolph C. Steer, M.D., Ph.D.
6) Robert V. Baumgartner
7) Charles A. Dinarello, M.D.
8) Karen A. Holbrook, Ph.D.
(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____________, 2008
_________________________________________
_________________________________________
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.