SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only
(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
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
TECHNE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
October 27, 2005
The annual meeting of shareholders of Techne Corporation (the "Company")
will be held at the offices of the Company, 614 McKinley Place N.E.,
Minneapolis, Minnesota, on Thursday, October 27, 2005, 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 six (6).
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 16, 2005 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.
THOMAS E. OLAND,
President
Dated: September 27, 2005
Minneapolis, Minnesota
TECHNE CORPORATION
__________
PROXY STATEMENT
for
Annual Meeting of Shareholders
to be held October 27, 2005
__________
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 27, 2005 and at any adjournment thereof, for the purposes set forth
in the attached Notice of Annual Meeting.
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 Nominating 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
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.
The mailing address of the Company's principal executive office is 614
McKinley Place N.E., Minneapolis, MN 55413. The Company expects that this
Proxy Statement and the related Proxy and Notice of Annual Meeting will first
be mailed to shareholders on or about September 27, 2005.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 16, 2005 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 16,
2005, 38,864,314 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 16, 2005:
Amount and
Name and Address Nature of Shares Percent
of Beneficial Owner Beneficially Owned(1) of Class(2)
------------------------------- --------------------- -----------
Select Equity Group, Inc., 2,906,666 7.5%
Select Offshore Advisors, LLC
and George S. Loening
380 Lafayette Street, 6th floor
New York, NY 10003
Barclays Global Investors, NA, 2,387,857 (3) 6.1%
Barclays Global Fund Advisors,
Barclays Capital Securities
Limited and
Palomino Limited
45 Fremont Street
San Francisco, CA 94105
Thomas E. Oland 1,742,569 (4)(5) 4.5%(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 16, 2005, 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 2,175,131 shares, no shared voting or investment
power.
(4) Does not include 833,708 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 as to the voting of such shares. Including such 833,708
shares, Mr. Oland, a director of the Company, beneficially owns
2,576,277 shares or 6.6% of total shares outstanding plus shares
subject to options exercisable by him.
(5) Includes 976,920 shares owned directly, 91,169 held by the Company's
Stock Bonus Plan for Mr. Oland's account, 68,556 shares held by Thomas
Oland and Associates, 205,924 shares held by the Thomas Oland and
Associates Profit Sharing Plan and Trust and 400,000 shares subject to
stock options which are currently exercisable.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of September 16, 2005, 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
4.5% of total shares outstanding plus shares subject to options exercisable
by him. 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 8.2% 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 1,742,569 (2)(3)
Roger C. Lucas, Ph.D. 78,956 (4)(5)(6)
Howard V. O'Connell 186,080 (4)(6)(7)
G. Arthur Herbert 194,360 (4)(6)(8)
Monica Tsang, Ph.D. 131,864 (9)
Randolph C. Steer, M.D., Ph.D. 30,000 (4)(6)(10)
Marcel Veronneau 50,100 (11)
Robert V. Baumgartner 21,000 (4)(6)(12)
Gregory J. Melsen 426 (13)
Officers and directors as a
group (10 persons) 3,186,609 (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 16,
2005.
(2) See Note (3) to the preceding table.
(3) See Note (4) to preceding table.
(4) Does not include 924,877 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.
(5) Includes 20,000 shares owned by Dr. Lucas' wife and 37,500 shares
subject to stock options.
(6) 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.
(7) Includes 136,080 shares owned by trusts of which Mr. O'Connell is a
trustee and beneficiary and 50,000 shares subject to options.
(8) Includes 11,000 owned by Mr. Herbert's wife, 153,360 shares held by
trusts and partnership of which Mr. Herbert is a trustee or partner and
30,000 shares subject to options.
(9) Includes 5,641 shares held by Dr. Tsang's husband, 38,721 and 37,598
shares held by the Company's Stock Bonus Plan for Dr. Tsang's and Dr.
Tsang's husband's account and 3,612 shares subject to stock options.
(10) Includes 30,000 shares subject to options.
(11) Includes 6,135 shares held by the Company's Stock Bonus Plan for Mr.
Veronneau's account and 15,019 shares subject to options.
(12) Includes 20,000 shares subject to options.
(13) Includes 426 shares subject to options.
(14) Includes 924,877 shares held by the Company's Stock Bonus Plan as to
which the Company's Board of Directors directs the voting and 586,557
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 to be set at six 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 six, as
well as the election of each nominee, 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.
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. 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 64 Chairman of the Chairman of the Board, 1985
Board, Chief President and Treasurer
Executive of the Company since
Officer, 1985 and President of
President, Research and Diagnostic
Treasurer and Systems, Inc. since 1982.
Director
Roger C. Lucas, Ph.D. 62 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 75 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.
G. Arthur Herbert 79 Director Principal of CEO Advisors, 1989
a management and financial
consulting firm, since 1989;
from 1969 to 1988, President
and Vice President Manager
of Electro-Science Management
Corp., a manager of venture
capital partnerships.
4
Current
Position(s) Principle Occupation(s) Director
Name Age with Company During Past Five Years Since
------------------- --- --------------- ------------------------- --------
Randolph C. Steer, 55 Director Consultant to the 1990
M.D., Ph.D. pharmaceutical and
biotechnology industries
since 1989; Chairman
(1999-2000) of Vicus.com,
Inc.; Director of BioCryst
Pharmaceuticals, Inc.
Robert V. Baumgartner, 49 Director Chief Executive Officer of 2003
C.P.A. Center for Diagnostic
Imaging, Inc., an operator
of diagnostic imaging
centers, since 2001; CEO of
American Coating
Technologies, Inc., a
manufacturer of coated
paper, in 2000; CEO of First
Solar, LLC, a producer of
thin-film photo-voltaic
coatings, in 1999 and 2000;
from 1986 to 1999 various
officer positions with
Apogee Enterprises, Inc.,
a diversified manufacturer
of glass and other products.
Committees and Meetings of the Board of Directors
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.
The Audit Committee (whose members are Messrs. Herbert, O'Connell and
Baumgartner and Dr. Steer) operates under a written charter established by
the Company's Board of Directors. 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 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 2005 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 five times during fiscal 2005. The
Committee's report is included in this Proxy Statement.
The Executive Compensation Committee (whose members are Dr. Steer and
Messrs. Herbert, O'Connell and Baumgartner) determines compensation for
executive officers of the Company. The Committee met formally once during
fiscal 2005. The Committee also had informal discussions related to
compensation for several senior level positions within the Company which were
filled during fiscal 2005. The Committee's report is included in this Proxy
Statement.
5
The Nominations and Governance Committee is composed of all "independent"
directors, currently all directors except Mr. Oland. The committee operates
under a written charter. 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 Committee did not formally meet in fiscal 2005, however, it met
informally and is conducting a search to replace the retired Dr. Christopher
Henney. The Committee also determined to propose to shareholders at their
2005 annual meeting the re-election of the incumbent directors of the
Company. 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.
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.
During fiscal 2005, the Board held five meetings. Each director attended
75% or more of the total number of meetings of the Board and of Committees of
which he 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 meetings
of shareholders. All members did attend the annual meeting in 2004.
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.
Directors' Fees
Directors who are not employees of the Company are compensated at the rate
of $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. Under the Company's 1998
Nonqualified Stock Option Plan, outside directors automatically receive an
option to purchase shares of the Company's Common Stock on election and upon
each re-election. In connection with the 2005 Annual Meeting of
Shareholders, the number of shares subject to the option granted to outside
directors re-elected to the Board will be 5,000 per director.
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 independent registered public accounting firm the
material required to be discussed by Statement on Auditing Standards
No. 61; and
6
(3) reviewed the written disclosures and the letter from the 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 financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 2005 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
Independent Registered Public Accountants
KPMG LLP acted as the Company's independent registered public accounting
firm for fiscal 2005 and 2004. The appointment of an independent registered
public accounting firm for the current fiscal year has not yet been made but
will be made immediately following the 2005 annual meeting of shareholders.
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.
Audit Fees
The following fees were paid or payable to KPMG LLP for the fiscal years
ended June 30:
2005 2004
-------- --------
Audit Fees $440,640 $125,700
Audit-Related Fees $ 21,525 $ 37,500
Tax Fees $ 51,600 $ 33,700
All Other Fees $ 63,000 $157,000
"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. In 2005, audit fees also included fees
incurred for the audits of management's assessment of the effectiveness of
internal controls over financial reporting and the effectiveness of internal
control over financial reporting.
"Audit-Related Fees" in 2005 were primarily for services rendered and
expenses incurred for the analysis of the Company's investments in entities
in which the Company owns a minority interest and analysis of the Company's
accelerated stock buyback transaction. "Audit-Related Fees" in 2004 were
primarily for services rendered and expenses incurred for the analysis of the
Company's investments in entities in which the Company owns a minority
interest and advice on the Company's compliance with certain requirements of
the Sarbanes-Oxley Act.
"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.
"All Other Fees" in 2005 and 2004 include fees for services and expenses
incurred in connection with a claim for a refund of certain sales and use
taxes paid to the State of Minnesota. Also included in 2005 were services and
expenses incurred in connection with analysis of transfer pricing and
repatriation of foreign earnings.
7
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. In 2005, the Audit Committee approved a resolution
authorizing Company officers to engage KPMG in permitted non-audit services
that involve less than $25,000 in fees. Such services are reported to the
Audit Committee and approved prior to completion of the audit. All of the
services rendered by KPMG described above which were over $25,000 were pre-
approved by the Audit Committee. The Audit Committee has considered whether
provision of the above non-audit services is compatible with maintaining
KPMG's independence and has determined that such services have not adversely
affected KPMG's independence.
EXECUTIVE COMPENSATION
Executive Compensation Committee Report
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, Randolph C. Steer, M.D.,
Ph.D and Robert V. Baumgartner. None of the members of the Committee is or
ever has been an employee or officer of the Company and none is affiliated
with any entity other than the Company with which an executive officer of the
Company is affiliated.
Overview and Philosophy. The Company's executive compensation program is
comprised of base salaries, annual performance bonuses comprised of a cash
and option component, long-term incentive compensation in the form of stock
options, 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 Compensation Committee from time to
time may award special cash bonuses or stock options related to non-
recurring, extraordinary performance.
The Compensation Committee has followed a policy of paying annual base
salaries which are on the moderate side of being competitive in its industry
and of awarding bonuses based on achievement of specific revenue, profit and
non-monetary goals. If the goals are achieved, the officer receives an
option to purchase a number of shares with a fair market value on the date of
grant equal to 20% of the officer's base salary and receives, at the election
of the officer, either a cash bonus equal to 20% of the officer's base salary
or an additional option to purchase a number of shares with a fair market
value on date of grant equal to 170% of the cash bonus alternative. Bonuses
are awarded on a prorated basis if between 85% and 100% of the specific
revenue and profit goals are achieved. The goals are established annually as
recommended by the Chief Executive Officer of the Company and approved by the
Compensation Committee.
The Company has formal employment agreements effective through June 30,
2007 with its full-time executive officers who served during fiscal 2005,
other than its Chief Financial Officer whose employment agreement is
effective through June 30, 2008 and Mr. Oland, its President, who serves
pursuant to an oral understanding. See "Employment Contracts and Change in
Control Arrangements" below. The agreements provide for base salaries
subject to annual review, bonuses as described above, benefits as provided to
all employees and severance compensation in the event that the officer's
employment is terminated without cause or in connection with a sale or merger
of the Company. With the exception of the Chief Financial Officer, severance
compensation is dependent upon years of employment with or service to the
Company. The Chief Financial Officers severance compensation is 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.
8
Compensation in 2005. During fiscal 2005, the Company maintained its
principal compensation policies and made adjustments in base salaries to
reflect competitive industry and individual performance factors. The
Committee, at the beginning of fiscal 2005, established performance criteria
for officers based 70% on growth in consolidated revenues and earnings and,
working through the Company's Chief Executive Officer, 30% on individual
goals which, if met, would permit each officer to earn a cash bonus and
additional stock options. The Company achieved record revenues and earnings
in fiscal 2005. On the basis of performance against the criteria
established, the Committee, at the close of fiscal 2005 awarded to Dr. Tsang,
Mr. Veronneau and Mr. Melsen the bonuses set fourth in the table below under
"Summary Compensation Table" and, subsequent to fiscal year end, the options
indicated in footnote (3) to the table below under "Options/SAR Grants During
2005 Fiscal Year". During fiscal 2005, the Committee also granted Mr. Melsen
options to purchase 25,000 shares (for details on such options see below
"Options/SARGrants During Fiscal 2005). In further recognition of the
officers' achievements, the Committee established base salaries for fiscal
2006 as disclosed below under "Employment Contracts and Change in Control
Arrangements."
General. 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 in
which all qualified employees, including executive officers, participate
subject to statutory limitations on contributions for highly compensated
individuals. In fiscal 2005, 2004 and 2003, the Company contributed to the
plan an amount equal to approximately 10%, 8% and 4% of gross wages,
respectively. One half of the contributions to the plan is in the form of
Common Stock of the Company. The amount of perquisites allowed to executive
officers, as determined in accordance with rules of the Securities and
Exchange Commission, did not exceed 10% of salary in fiscal 2005.
Chief Executive Officer Compensation. Thomas E. Oland served as the
Company's Chief Executive Officer in fiscal 2005. His compensation was
determined in accordance with the policies described above as applicable to
all executive officers. His base salary of $230,000 in fiscal 2004 was
increased to $242,000 in fiscal 2005. For fiscal 2005 performance he earned,
but waived, his annual bonus. In February 1996, the Compensation Committee,
in connection with the Board's long-term strategic planning for the Company,
adopted a substantial long-term incentive for Mr. Oland in the form of
options to purchase an aggregate of 400,000 shares of the Common Stock of the
Company at $4.53 per share, the fair market value on the date of grant. The
options are fully vested and will expire on the earlier of (a) as to 268,000
shares one year from the date of termination of employment and as to 132,000
shares three months from the date of termination of employment, or (b)
February 1, 2006.
Summary. Aggregate executive compensation increased moderately in fiscal
2005. The Company awarded stock options to officers because the Company
achieved record revenues and individual officers achieved certain performance
goals. The Compensation Committee intends to continue its policy of paying
relatively moderate base salaries, basing bonuses on specific revenue, profit
and performance goals and granting options to provide long-term incentive.
G. Arthur Herbert
Howard V. O'Connell
Randolph C. Steer, M.D., Ph.D.
Robert V. Baumgartner
Members of the Compensation Committee
9
Employment Contracts and Change in Control Arrangements
The Company has formal employment agreements with each of its full-time
executive officers with the exception of its President and Chief Executive
Officer, with whom the Company has an oral understanding. The agreements
provide for base salaries subject to annual review, bonuses as described in
the Compensation Committee Report contained in this Proxy Statement, benefits
as provided to all employees and severance compensation in the event that the
officer's employment is terminated without cause or in connection with a sale
or merger of the Company. With the exception of the Chief Financial Officer,
severance compensation is dependent upon years of employment with or service
to the Company. The Chief Financial Officers severance compensation is 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.
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's
President (who serves as Chief Executive Officer) and to the Company's other
executive officers whose salary and bonus for fiscal 2005 exceeded $100,000.
Long Term
Compensation
---------------------
--------
Awards
Payouts
---------------------
-------
Securities
Restricted Underlying
LTIP All Other
Name and Fiscal Stock Options
Payouts Compen-
Principal Position Year Salary($) Bonus($) Other(1) Awards($) /SARs(#)
($)
sation($)(2)
------------------ ------ ---------- -------- -------- ---------- ----------
------- -----------
-
Thomas E. Oland, 2005 242,000 0 None None 0
None 22,021
CEO 2004 230,000 0 None None 0
None 17,503
and President 2003 225,000 0 None None 0
None 8,903
Monica Tsang, Ph.D., 2005 239,400 43,571 None None 844
None 22,021
Vice President - 2004 228,000 45,600 None None 26,126
None 17,503
Research 2003 221,000 36,841 None None 1,088
None 8,903
Marcel Veronneau, 2005 147,000 24,549 None None 475
None 17,965
Vice President - 2004 140,000 20,440 None None 15,505
None 14,228
Hematology Operations 2003 136,000 22,671 None None 670
None 7,033
Gregory J. Melsen, 2005 110,000(3) 22,000 None None 426
None 0
Vice President - 2004 N/A N/A N/A N/A N/A
N/A N/A
Finance and Chief 2003 N/A N/A N/A N/A N/A
N/A N/A
Financial Officer
---------------
(1) "None" indicates zero or an amount equal to less than 10% of the total
amount of annual salary and bonus reported for the named executive
officer.
(2) For each individual the amount reflects Company contributions to Profit
Sharing and Savings Plan (as to one-half) and Stock Bonus Plan (as to one-
half), the latter in the form of shares of the Company's Common Stock.
(3) January to June 2005.
10
Options/SAR Grants During 2005 Fiscal Year
The following table provides information related to options granted to the
name executive officers during fiscal 2005. The Company has not granted any
stock appreciation rights.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants
Option Term
---------------------------------------------------- --
--------------------
Number of
Securities Percent of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees Base Price Expiration
Name (#) in Fiscal Year ($/Sh) Date
5% ($) 10% ($)
-------------------- ------------ ---------------- ----------- ---------- --
------- ---------
Thomas E. Oland 0 -- -- --
-- --
Monica Tsang, Ph.D.(3) 1,126(1) 2.9% 40.47 7/08/11
18,551 43,232
Marcel Veronneau (3) 505(1) 1.3% 40.47 7/08/11
8,320 19,389
Gregory J. Melsen (3) 25,000(2) 63.7% 39.53 12/16/14
621,505 1,575,016
---------------
(1) Such option is a non-qualified stock option and became exercisable July 9,
2004.
(2) Of such 25,000 total, 7,587 were issued as an incentive stock option and
17,413 were issued as a non-qualified stock option. Of the total, 8,000
become exercisable on each of December 17, 2005 and 2006 and 9,000 become
exercisable on December 17, 2007, contingent on continued employment.
(3) Subsequent to fiscal 2005 year end, immediately exercisable non-qualified
stock options for the indicated number of shares at an exercise price of
$51.60 per share expiring August 17, 2012 were granted: M. Tsang - 844;
M. Veronneau - 475; G. Melsen - 426.
Option/SAR Exercises During 2005 Fiscal Year
and Fiscal Year End Options/SAR Values
The following table provides information related to options exercised by a
named executive officer during the 2005 fiscal year and the number and value
of options held by each named executive officer at fiscal year end.
Number
Of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
Shares Value at FY-End (#) FY-End ($) (1)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
---------------- ------------ -------- ------------- ---------------
Thomas E. Oland 0 0 400,000/0 16,551,480/0
Monica Tsang, Ph.D. 6,748 218,807 24,660/8,334 295,143/74,164
Marcel Veronneau 18,274 691,183 14,544/5,000 173,502/44,495
Gregory J. Melsen 0 0 0/25,000 0/159,500
---------------
(1) Based on the difference between the $45.91 per share closing price of the
Company's Common Stock as reported by Nasdaq on June 30, 2005 and the
option exercise price.
11
STOCK PERFORMANCE CHART
The following chart compares the cumulative total shareholder return on
the Company's Common Stock with the S&P Midcap 400 Index and the S&P 400
Biotechnology Index. The comparison assumes $100 was invested on June 30,
2000 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
COMPARISON OF CUMALATIVE FIVE YEAR TOTAL RETURN
INDEXED RETURNS
Years Ending
Company/Index June 2001 June 2002 June 2003 June 2004 June 2005
--------------- --------- --------- --------- --------- ---------
TECHNE CORP 50.00 43.42 46.69 66.85 70.63
S&P MIDCAP 400 INDEX 108.87 103.74 103.00 131.82 150.31
S&P 400 BIOTECHNOLOGY 92.21 45.85 57.15 64.48 60.52
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
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, 2005,
all Section 16(a) filing requirements applicable to Insiders were met.
12
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2006 Annual Meeting must be received by the
Company at its offices by May 22, 2006 to be eligible for inclusion in the
Company's Proxy Statement and related Proxy for the 2006 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 2006
Annual Meeting but not included in the Company's Proxy Statement and Proxy is
received by the Company after August 6, 2006, then management named in the
Company's Proxy for the 2006 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, 2005, including 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, 2005, 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 27, 2005
Minneapolis, Minnesota
13
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 27, 2005 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 six:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) To elect Directors: Nominees: Thomas E. Oland, Roger C. Lucas, Ph.D.,
Howard V. O'Connell, G. Arthur Herbert, Randolph C. Steer, M.D., Ph.D.,
and Robert V. Baumgartner.
[ ] FOR all Nominees listed above [ ] WITHOUT AUTHORITY
(except those whose names have to vote for all nominees
been written on the line below listed above
(To withhold authority to vote for any nominee, write that nominee's
name 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_________, 2005
___________________________________
___________________________________
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.