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 23, 2003
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 23, 2003, 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 seven (7).
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, 2003 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 23, 2003
Minneapolis, Minnesota
TECHNE CORPORATION
_____________
PROXY STATEMENT
for
Annual Meeting of Shareholders
to be held October 23, 2003
____________
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, 2003 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 23, 2003.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 12, 2003 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,
2003, 41,027,576 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.
1
PRINCIPAL SHAREHOLDERS
The following table provides information concerning the only persons
known to the Company to be the beneficial owners of more than five percent
(5%) of the Company's outstanding Common Stock as of September 12, 2003:
Amount and
Name and Address Nature of Shares Percent
of Beneficial Owner Beneficially Owned(1) of Class(2)
---------------------------------- -------------------- ----------
Select Equity Group, Inc. 2,089,987 5.1%
Select Offshore Advisors, LLC
and George S. Loening
380 Lafayette Street, 6th floor
New York, NY 10003
Thomas E. Oland 1,742,120 (3)(4) 4.2% (3)
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, 2003, 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) Does not include 854,935 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 854,935
shares, Mr. Oland, a director of the Company, beneficially owns
2,597,055 shares or 6.3% of total shares outstanding plus shares
subject to options exercisable by him.
(4) Includes 976,920 shares owned directly, 90,720 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 12, 2003, by each executive
officer of the Company named in the Summary Compensation Table, by each
director and by all directors and executive officers (including the named
individuals) as a group. Shares beneficially owned by Mr. Oland constitute
4.2% of total shares outstanding 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 8.5% of total
shares outstanding plus shares subject to options exercisable by them.
2
Name of Director Number of Shares
or Executive Officer Group Beneficially Owned(1)
-------------------------- ---------------------
Thomas E. Oland 1,742,120 (2)(3)
Roger C. Lucas, Ph.D. 81,456 (4)(5)(6)
Howard V. O'Connell 220,880 (4)(6)(7)
G. Arthur Herbert 263,360 (4)(6)(8)
James A. Weatherbee, Ph.D. 103,729 (9)
Monica Tsang, Ph.D. 115,086 (10)
Christopher S. Henney, D.Sc, Ph.D. 25,000 (4)(6)(11)
Randolph C. Steer, M.D., Ph.D. 40,000 (4)(6)(12)
Marcel Veronneau 54,592 (13)
Robert V. Baumgartner 5,000 (4)(6)(14)
Officers and directors as a
group (10 persons) 3,506,158 (15)
---------------
(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,
2003.
(2) See Note (3) to the preceding table.
(3) See Note (4) to preceding table.
(4) Does not include 945,655 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 40,000 shares
subject to stock options. Dr. Lucas disclaims beneficial ownership of
the shares owned by his wife.
(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 121,980 shares owned by trusts of which Mr. O'Connell is a
trustee and beneficiary and 80,000 shares subject to options.
(8) Includes 163,360 shares held by trusts and partnership of which Mr.
Herbert is a trustee or partner and 100,000 shares subject to options.
(9) Includes 2,520 shares subject to stock options. Does not include
shares beneficially owned by Dr. Tsang, Dr. Weatherbee's wife.
(10) Includes 13,616 shares subject to stock options. Does not include
shares beneficially owned by Dr. Weatherbee, Dr. Tsang's husband.
(11) Includes 25,000 shares subject to options.
(12) Includes 40,000 shares subject to options.
(13) Includes 22,313 shares subject to options.
(14) Includes 5,000 shares subject to options.
(15) Includes 945,655 shares held by the Company's Stock Bonus Plan as to
which the Company's Board of Directors directs the voting and 728,449
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 seven and that the individuals named in
the table below be elected. Under applicable Minnesota law, approval of the
proposal to set the number of directors at seven, 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) with Principle Occupation(s) Director
Name Age Company During Past Five Years Since
--------------------- --- ---------------- ----------------------- -------
Thomas E. Oland 62 Chairman of the Chairman of the Board, 1985
Board, President, President and Treasurer
Treasurer and of the Company since
Director 1985 and President of
Research and Diagnostic
Systems, Inc. since
1982.
Roger C. Lucas, Ph.D. 60 Vice Chairman Vice Chairman and 1985
and Director Senior Scientific
Advisor to the
Company's Board since
1995. Chairman of
Visual Circuits, a
digital video company
since 1997, and
director of
ChemoCentryx, Inc.,
of which the Company is
a shareholder. Chief
Scientific Officer,
Executive Vice President
and Secretary of the
Company from 1985 to
1995.
Howard V. O'Connell 73 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 77 Director Principal of CEO 1989
Advisors, 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
Randolph C. Steer, 53 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.
Christopher S. Henney, 62 Director Executive Chairman of 1996
D.Sc., Ph.D. Dendreon Corporation, a
biotechnology company,
since 2003 and for more
than five years prior to
2003 an executive officer
and director of Dendreon.
Executive Vice President
of ICOS Corporation, a
biotechnology company,
from 1990 to 1995.
Director of Dendreon
Corp., Sonus
Pharmaceuticals, Inc.
and Bionomics Inc.
Robert V. Baumgartner, 47 Director Chief Executive Officer 2003
C.P.A. of 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-noltaic coatings,
in 1999 and 2000; from
1986 to 1999 various
officer positions with
Apogee Enterprises, Inc.,
a diversified manufacturer
of glass and other products.
Committee and Board Meetings
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 rules of the NASD. The Audit Committee
(whose members are Messrs. Herbert and O'Connell and Dr. Steer and since
August 11, 2003 Mr. Baumgartner) operates under a written charter established
by the Company's Board of Directors. The Audit Committee is responsible for
the selection and supervision of the Company's auditors 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 2003 Messrs. Herbert
and O'Connell and Dr. Steer served as "financial experts" as such term is
defined in Section 407 of the Sarbanes-Oxley Act. The Audit Committee met
five times during fiscal 2003. The Executive Compensation Committee (whose
members are Drs. Henney and Steer and Messrs. Herbert and O'Connell)
determines compensation for executive officers of the Company. The Executive
Compensation Committee met three times during fiscal 2003. In addition to
formal meetings, the Audit and Compensation Committees had numerous telephone
conferences regarding Committee business and individual members of the
Committee had meetings with management, auditors and auditor candidates.
5
In June of 2003 the Board established the Nominations and Governance
Committee and provided that it shall be composed of all "independent"
directors as such term is defined in applicable rules of the Securities and
Exchange Commission and Nasdaq, i.e., currently all directors except Mr.
Oland. 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 to establish governance standards and procedures which will support and
enhance the performance and accountability of management and the Board. 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 in care of its General Counsel. The Committee did not
formally meet in fiscal 2003, however, it conducted the search and made the
selection as a director of Mr. Baumgartner in replacement of the retired Mr.
Lowel E. Sears. The Committee also determined to propose to shareholders at
their 2003 annual meeting the reelection of the incumbent directors of the
Company.
During fiscal 2003, the Board held six meetings. Each director except
Dr. Henney attended 75% or more of the total number of meetings of the Board
and of Committees of which he was a member.
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. In addition, 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 2003 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 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 auditors the material required to
be discussed by Statement on Auditing Standards No. 61; and
(3) reviewed the written disclosures and the letter from the
independent auditors required by the Independence Standards Board's
Standard No.1, and discussed with the independent auditors 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, 2003 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
6
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors of the Company is composed
of directors Christopher S. Henney, D.Sc., Ph.D., G. Arthur Herbert, Howard
V. O'Connell and Randolph C. Steer, M.D., Ph.D. 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 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,
2004 with its full-time executive officers who served during fiscal 2003,
other than Mr. Oland, its President who serves pursuant to an oral
understanding, and Mr. Heaney, who retired on September 30, 2002. 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 dependent upon years of employment with or service to the
Company in the event that the officer's employment is terminated without
cause or in connection with a sale or merger of the Company.
Compensation in 2003. During fiscal 2003, 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 2003, 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.
On the basis of performance against the criteria established, the Committee,
at the close of fiscal 2003 awarded to Dr. Tsang, and Messrs. Veronneau and
Heaney the bonuses set fourth in the table below under "Summary Compensation
Table" and, subsequent to fiscal year end, the options indicated in footnote
(2) to the table below under "Options/SAR Grants During 2003 Fiscal Year".
In further recognition of the officers' achievements, the Committee
established base salaries for fiscal 2004 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 2003, 2002 and 2001, the Company has contributed to
the plan an amount equal to approximately 4%, 10% and 9% 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 2003.
7
Chief Executive Officer Compensation. Thomas E. Oland served as the
Company's Chief Executive Officer in fiscal 2003. His compensation was
determined in accordance with the policies described above as applicable to
all executive officers. His base salary of $225,000 remained the same in
fiscal 2002 and fiscal 2003. For fiscal 2003 performance he earned but
waived a cash 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 2003 and the Company awarded modest 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.
Christopher S. Henney, D.Sc., Ph.D.
G. Arthur Herbert
Howard V. O'Connell
Randolph C. Steer, M.D., Ph.D.
Members of the Compensation Committee
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 with
Dr. Tsang and Mr. Veronneau expire June 30, 2004. The agreement with Mr.
Heaney expired on September 30, 2002. 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 based upon years of employment by or
service to the Company in the event that the officer's employment is
terminated without cause or in connection with a sale or merger of the
Company. Base salaries for fiscal 2004 for the executive officers named in
the Summary Compensation Table are as follows: T. Oland - $230,000; M. Tsang
- $228,000; M. Veronneau - $140,000. Mr. Heaney retired on September 30,
2002, resigned as an officer and director on that date, and worked during the
remainder of the fiscal year in a transitional, part-time capacity. Each of
such officers is also subject to a confidentiality and non-competition
agreement, which prohibits competition with the Company for a period of two
years following termination of employment with the Company.
8
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 2003
exceeded $100,000. Not included in the table is Dr. James Weatherbee, Vice
President and Chief Scientific Officer, who was on medical leave and did not
receive any compensation from the Company in fiscal 2003.
Long Term Compensation
------------------------------------------
Annual Compensation Awards Payouts
--------------------------- --------------------- --------------------
Securities
Restricted Underlying LTIP All Other
Name and Fiscal Stock Options Payouts Compen-
Principal Position Year Salary($) Bonus($) Other(1) Awards($) /SARs (#) ($) sation($)(2)
--------------------- ------ --------- -------- -------- ----------- ---------- ------- ------------
Thomas E. Oland, 2003 225,000 0 None None 0 None 8,903
CEO 2002 225,000 0 None None 0 None 19,873
and President 2001 220,000 0 None None 0 None 18,459
Monica Tsang, Ph.D., 2003 221,000 36,841 None None 1,088 None 8,903
Vice President - 2002 210,000 39,480 None None 1,226 None 19,873
Research 2001 200,000 39,820 None None 554 None 18,459
Marcel Veronneau, 2003 136,000 22,671 None None 670 None 7,033
Vice President - 2002 130,000 22,100 None None 748 None 18,019
Hematology Operations 2001 122,000 24,290 None None 338 None 15,612
Timothy M. Heaney, 2003 121,002 8,678 None None 256 None 6,988
Vice President - 2002 195,000 35,980 None None 1,134 None 19,873
Secretary and General 2001 185,000 36,830 None None 538 None 10,045
Counsel(3)
-------------
(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) Mr. Heaney retired on September 30, 2002, resigned as an officer and
director as of that date and worked the remainder of the fiscal year in a
transitional, part-time capacity. Compensation information is for the
entire fiscal year.
9
Options/SAR Grants During 2003 Fiscal Year
The following table provides information related to options granted to
the name executive officers during fiscal 2003. 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. 1,400(1)(2) 40% 28.22 6/30/09 16,084 37,482
Marcel Veronneau 785(1)(2) 23% 28.22 6/30/09 9,018 21,017
Timothy M. Heaney 1,275(2)(3) 37% 28.22 6/30/09 14,648 34,135
--------------------
(1) Such option is an incentive stock option and became exercisable July 1,
2002.
(2) Subsequent to fiscal 2003 year end, options for the indicated number of
shares at an exercise price of $33.85 per share expiring August 13, 2010
were granted: M. Tsang - 1,088; M. Veronneau - 670; T. Heaney - 256.
(3) Such option is a nonqualified stock option and became exercisable July 1,
2002.
Option/SAR Exercises During 2003 Fiscal Year
and Fiscal Year End Options/SAR Values
The following table provides information related to the only option
exercised by a named executive officer during the 2003 fiscal year and the
number and value of options held by each named executive officer at fiscal
year end.
Number
of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
Shares Value at FY-End (#) FY-End ($)(2)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($)(1) Unexercisable Unexercisable
-------------------- ------------ --------- ------------- ---------------
Thomas E. Oland 0 0 400,000/0 10,327,480/0
Monica Tsang, Ph.D. 63,392 1,828,022 12,528/0 197,151/0
Marcel Veronneau 2,148 40,785 21,643/0 499,676/0
Timothy M. Heaney 86,400 1,405,139 2,947/0 2,716/0
--------------------
(1) Based on the difference between the closing price of the Company's Common
Stock as reported by Nasdaq on the date of exercise and the option
exercise price.
(2) Based on the difference between the $30.25 per share closing price of the
Company's Common Stock as reported by Nasdaq on June 30, 2003 and the
option exercise price.
10
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, 1998
in the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
TOTAL SHAREHOLDER RETURN
INDEXED RETURNS
Years Ending
Company / Index June 1999 June 2000 June 2001 June 2002 June 2003
---------------------- --------- --------- --------- --------- ---------
TECHNE CORP 133.11 681.97 340.98 296.08 318.43
S&P MIDCAP 400 INDEX 117.18 137.08 149.24 142.20 141.18
S&P 400 BIOTECHNOLOGY 189.59 422.48 389.58 193.71 241.45
INDEPENDENT AUDITORS
KPMG LLP acted as the Company's independent auditors for the 2003
fiscal year. The selection of an auditor for the current fiscal year has not
yet been made but will be made immediately following the 2003 annual meeting
of shareholders. A representative of KPMG LLP is 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.
As previously reported, on November 18, 2002 the Company dismissed its
independent auditors, Deloitte & Touche LLP ("D&T") and engaged KPMG LLP
("KPMG") to serve as its new independent auditors for the fiscal year ending
June 30, 2003. The dismissal of D&T and the engagement of KPMG were pursuant
to action taken by the Audit Committee of the Company's Board of Directors.
D&T's reports on the Company's consolidated financial statements for
each of the fiscal years ended June 30, 2002 and 2001 did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope or accounting principles.
During the fiscal years ended June 30, 2002 and 2001 and through
November 18, 2002, there were no disagreements with D&T on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to D&T's satisfaction,
would have caused it to make reference to the subject matter of the
disagreements in connection with its report on the Company's consolidated
financial statements for such years; and there were no "reportable events,"
as such term is defined in Item 304 (a) (1) (v) of Regulation S-K of the
Securities and Exchange Commission.
The Company provided D&T with a copy of the foregoing disclosures. D&T
provided the Company with a letter addressed to and previously filed with the
Securities and Exchange Commission, stating its agreement with the statements
contained in such disclosures.
During the years ended June 30, 2002 and 2001 and through the date of
the Audit Committes decision to engage KPMG, the Company did not consult KPMG
with respect to the application of accounting principles to
11
a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's consolidated financial
statements, or any other matters or reportable events as set forth in Items
304 (a) (2) (i) and (ii) of Regulation S-K of the Securities and Exchange
Commission.
Audit Fees
The estimated aggregate fees billed and to be billed by KPMG LLP for
professional services rendered in connection with the audit of the Company's
annual financial statements for fiscal 2003 and review of the Company's Forms
10-Q for the second and third quarters of fiscal 2003 are $104,000. For
professional services rendered in connection with its review of the Company's
Form 10-Q for the first quarter of fiscal 2003 and the transition of audit
work to KPMG, Deloitte & Touche LLP billed the Company $12,985.
Financial Information Systems Design and Implementation Fees
Neither KPMG LLP nor Deloitte & Touche LLP provided the Company any
services related to financial information systems design and implementation
during fiscal 2003.
All Other Fees
The aggregate fees billed and to be billed by KPMG LLP and by Deloitte
& Touche, LLP for all other non-audit services rendered to the Company during
fiscal 2003, including fees for tax related services, employee benefit plan
audits and business consulting services unrelated to financial information
systems design and implementation are $19,524 and $49,671, respectively. The
Company's Audit Committee determined that provision of such non-audit
services was compatible with maintaining KPMG LLP's and Deloitte & Touche's
independence and determined there is no conflict of interest.
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, 2003,
all Section 16(a) filing requirements applicable to Insiders were met.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2004 Annual Meeting must be received by the
Company at its offices by May 25, 2004 to be eligible for inclusion in the
Company's Proxy Statement and related Proxy for the 2004 Annual Meeting.
Also, if a shareholder proposal intended to be presented at the 2004
Annual Meeting but not included in the Company's Proxy Statement and Proxy is
received by the Company after August 8, 2004, then management named in the
Company's Proxy for the 2004 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.
12
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended June 30, 2003, 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, 2003, 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 23, 2003
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 23, 2003 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 seven:
[ ] 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.,
Christopher S. Henney, D.Sc., 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__________________, 2003
_________________________________________
_________________________________________
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.