UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, DC 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

 

  Filed by the Registrant   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))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material under §240.14a-12

 

BIO-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 all boxes that apply):
No fee required.
Fee paid previously with preliminary materials.
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
 

 

Where
Science
Intersects
Innovation™

 

At Bio-Techne, we are accelerating discoveries to positively impact health; it drives us to collaborate, develop, and manufacture award-winning tools that help researchers achieve reproducible and consistent results. Whether customers are at the cutting-edge of academic research, translating basic discoveries to therapeutic leads, or at facilities that require the highest level of diagnostic testing, our innovative products and services provide the solutions scientists need to achieve success.

 

 

 

Message from our CEO

 

President and Chief Executive Officer
September 14, 2022

 

17%

organic growth
for the year

 

$211M

capital returned to
our shareholders

 

“We are focused on creating value for all our stakeholders, including our customers, employees, shareholders, and the communities where we live and work.”

PRELIMINARY COPY — SUBJECT TO COMPLETION

 

In accordance with Rule 14a-6(d) under Regulation 14A of the Securities Exchange Act of 1934, as amended, please be advised that Bio-Techne Corporation intends to release definitive copies of this Proxy Statement to shareholders beginning on or about September 14, 2022.

 

Dear Fellow Shareholders:

 

The Bio-Techne team had a tremendous finish to fiscal 2022. We not only achieved record financial performance on multiple metrics; we also made significant progress strengthening our global team to position the Company to execute our global growth strategy going forward. We achieved these results with a commitment to growing our Company in a responsible manner while leveraging our deep scientific capabilities to deliver the products necessary to enable discoveries that ultimately improve global healthcare. I am extremely proud of our accomplishments this fiscal year.

 

From a financial perspective, we continued the momentum we experienced in fiscal 2021. We achieved 17% organic growth for the year and our revenue exceeded $1 billion for the first time in our corporate history. We delivered these results with a focus on profitable growth, achieving an adjusted operating margin of 38.3% for the fiscal year. GAAP earnings per diluted share were $6.63 for the fiscal year, while adjusted EPS increased 17% over the prior year to $7.89 per diluted share. We also returned $211 million in capital to our shareholders through $50 million in dividends and $161 million in share buybacks.

 

During fiscal 2022 we also continued to execute our M&A strategy. First, we strengthened our cell and gene therapy initiatives with an agreement for the future acquisition of Wilson Wolf, the manufacturer of the industry-leading line of G-Rex bioreactor devices that are used to scale cell therapies. Next, we announced the acquisition of Namocell, a leading provider of fast and easy use single cell sorting and dispensing platforms. Namocell, and eventually Wilson Wolf, strengthen Bio-Techne’s cell and gene therapy workflow solution, positioning the Company to be a dominant player in this emerging class of therapeutics.

 

We also made significant advancements on our Environmental, Social and Governance (ESG) initiatives in the past year. This fall, we will be publishing an updated Corporate Sustainability Report highlighting our numerous accomplishments on this front. For example, due to progress on our employee initiatives, Bio-Techne was included on the Forbes 2022 list of America’s Best Employers and the Forbes 2022 list of Best Employers for Diversity. Additionally, for the first time, our Corporate Sustainability Report will include an inventory of our Scope I and Scope II greenhouse gas (GHG) emissions data for our largest U.S.- and European-based manufacturing facilities.

 

We are focused on creating value for all our stakeholders, including our customers, employees, shareholders, and the communities where we live and work. We appreciate your vote supporting the proposals included in this proxy.

 

Thank you for your investment in Bio-Techne.

 

Sincerely,

 

 

Charles (“Chuck”) R. Kummeth


 

 

Thursday, October 27, 2022

 

8:00 a.m. Central Time

 

VIA WEBCAST

www.virtualshareholdermeeting.com/TECH2022

 

Items of Business:

 

1. Set the number of members of the Board of Directors at nine;
2. Elect the Company’s nine nominees to the Board of Directors;
3. Approve, on an advisory basis, the compensation of our executive officers;
4. Approve an amendment to the Company’s Articles of Incorporation to increase the total number of authorized shares of common stock to effect a proposed four-for-one share split; and
5. Ratify the appointment of KPMG, LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year.

 

By order of the Board of Directors

 

 

Brenda S. Furlow

 

Executive Vice President, General Counsel
and Corporate Secretary

 

September 14, 2022

Notice of 2022 Annual Meeting of Shareholders

 

We are pleased to offer the Annual Meeting as a webcast so that all our shareholders, regardless of their location, can participate. You can join the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/TECH2022. We will cover the items of business described in this Proxy Statement and provide time for questions. For more information, go to “Information About the Annual Meeting,” which begins on page XX of this Proxy Statement.

 

Only shareholders of record at the close of business on September 2, 2022, will be entitled to attend and to vote at the Annual Meeting or any adjournment thereof. We hope you will join the webcast of Bio-Techne’s Annual Meeting. Whether or not you plan to attend, please make sure your shares are counted by providing your proxy as soon as possible.

 

Our 2022 Annual Report, which is not part of the proxy soliciting materials, is enclosed if the proxy materials were mailed to you. In addition, you can access the Annual Report at www.proxyvote.com.

 

Your vote is important

 

We encourage you to read the Proxy Statement and vote your shares as soon as possible. You may vote via the Internet at www.proxyvote.com or by telephone at 1-800-690-6903. If you received paper copies of your proxy materials in the mail, you may vote by mail using the return envelope enclosed for your convenience. The Proxy Statement and 2022 Annual Report to Shareholders are available at www.proxyvote.com.


 

How to Vote:

 

Even if you plan to attend the Annual Meeting, we encourage you to provide your proxy as soon as possible using one of the methods shown below.

 

BY INTERNET

Visit www.proxyvote.com.

 

BY TELEPHONE

In the U.S. or Canada, call
1-800-690-6903 toll-free.

 

 

BY MAIL

Mark, date, and sign your proxy card or voting instruction form and return it in the postage-paid envelope.

 

   
Attending the Meeting    
If you wish to attend the Annual Meeting via the webcast, you will need to register in advance using the 16-digit control number included in your proxy materials. Please see “Information About the Annual Meeting” beginning on page XX of this Proxy Statement for further details.
 

Table of Contents

 

Proxy Statement Summary 4
   
Proposal 1. Size of the Board 11
   
Proposal 2. Election of Directors 11
How We Choose Directors 12
Nominees for Director 15
   
Corporate Governance 20
The Role of the Board 20
Governance Documents 20
Board Independence 20
Board Leadership Structure 21
Risk Oversight 21
Board Self-Assessments 22
Board Committees 22
Shareholder Engagement 24
Director Orientation and Continuing Education 25
Limits on Other Boards 25
Meetings and Attendance 25
How to Contact the Bio-Techne Board 25
   
Director Compensation 26
Compensation Program for Fiscal Year 2022 26
Director Share Ownership Guidelines 26
Compensation Paid to the Non-Employee Directors 27
   
Corporate Sustainability 28
   
Executive Compensation 30
Compensation Discussion and Analysis 30
Executive Summary 30
Addressing Shareholder Concerns 33
CEO Transition in 2024 34
Compensation Philosophy and Objectives 35
Our Process for Establishing Executive Compensation 35
Elements of the 2022 Compensation Program 37
Compensation Policies and Practices 42
Compensation Committee Report on Executive Compensation 42
Additional Compensation Disclosures 43
   
Proposal 3. Advisory Vote on Executive Compensation 52
   
Share Information 52
Equity Compensation Plan Information 52
Principal Shareholders 53
Management Shareholdings 54
   
Proposal 4. Approve an Amendment to Bio-Techne’s Articles of Incorporation 55
   
Proposal 5. Ratification of Appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2023 57
   
Additional Corporate Governance Matters 60
Related Party Transactions 60
Code of Ethics and Business Conduct and Financial Fraud and Ethics Reporting Hotline 60
Shareholder Proposals for 2023 Annual Meeting 60
   
Information About the Annual Meeting 62
   
Appendix A A-1
   
Appendix B B-1

 

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Proxy Statement Summary

 

This section highlights selected information contained in this Proxy Statement. Please read the full Proxy Statement carefully before voting.

 

2022 Annual Meeting of Shareholders

 

Date and Time

 

October 27, 2022

 

8:00 a.m. (Central Time)

Place

 

Webcast at
www.virtualshareholdermeeting/TECH2022

Record Date

 

September 2, 2022

   
Voting Holders of Bio-Techne common stock are entitled to vote online at www.proxyvote.com, by telephone at 1-800-690-6903, by completing and returning a proxy card, or at the Annual Meeting. For more information, see “Information About the Annual Meeting.”

 

Our Board of Directors is asking you to take the following actions at the Annual Shareholder Meeting:

 

Item     Your Board’s
Recommendation
  Page
1.   Set the number of members of the Board of Directors at nine  

FOR

  X
2.   Elect the nine individuals nominated to be directors of the Company  

FOR

  X
3.   Approve, on an advisory basis, the compensation of our executive officers  

FOR

  X
4.   Approve an amendment to the Company’s Articles of Incorporation to increase the total number of authorized shares of common stock to effect a proposed four-for-one share split  

FOR

  XX
5.   Ratify the appointment of KPMG, LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year  

FOR

  XX

 

What’s New?

 

Our long-time President and CEO, Chuck Kummeth, has announced that he plans to retire June 30, 2024. The Board will be using this transition time to conduct a search for potential successors from both internal and external candidates.

 

We continued our sustainability journey with new ESG initiatives and substantially enhanced ESG disclosures, as reflected below and in our 2022 Corporate Sustainability Report, which will be published this Fall.

 

We expanded employee participation in our annual bonus and equity grant programs.

 

As a result of our commitment to and investment in our people, Bio-Techne was included on the Forbes 2022 lists of America’s Best Mid-Size Employers and Best Employers for Diversity.

 

We recently significantly increased the share ownership requirements for the directors and executive officers.

 

We rewrote, reorganized, and redesigned this document to help you better understand our governance and compensation practices and to demonstrate our commitment to transparency.

 

  |  2022 Proxy Statement    4

 
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Fiscal Year 2022 Performance

 

Our team continued to deliver on our long-term strategy in fiscal year 2022, leading to another year of strong financial results.

 

HIGHLIGHTS OF OUR FISCAL YEAR 2022 BUSINESS AND FINANCIAL PERFORMANCE INCLUDE:
We experienced a continuation of strong growth trends, driven by robust demand from our biopharma customers for our proteomic reagents, analytical tools, and cell and gene therapy workflow solutions. We also benefitted from increased traction with our ExoDx Prostate test due to improving physician office traffic, combined with our traditional and digital marketing initiatives.
Net sales for the full year fiscal 2022 increased 19% to $1,105.6 million. Organic growth was 17%, with acquisitions having a favorable impact of 3% and foreign currency translation having an unfavorable impact of 1%.
We furthered our cell and gene therapy initiatives through an agreement for the future acquisition of Wilson Wolf, the manufacturer of the industry-leading line of G-Rex bioreactor devices that are used to scale cell therapies. Terms of the agreement include a 20% investment when Wilson Wolf achieves trailing twelve-month (TTM) revenue of $92 million or TTM EBITDA of $55 million, at any point prior to December 31, 2027. If achieved, the second part of the forward contract will automatically trigger and requires the Company to acquire the remaining equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately 4.4 times revenue. The second part of the contract would be accelerated in advance of December 31, 2027 if Wilson Wolf meets its second milestone of approximately $226 million in TTM revenue or $136 million in TTM EBITDA.
We announced the acquisition of Namocell, a leading cell sorting and dispensing company with two instruments currently commercialized. Namocell’s proprietary instruments and consumables address several high-growth markets, including cell and gene therapy, cell engineering, cell line development, single cell genomics, antibody discovery, synthetic biology, and rare cell isolation. This acquisition closed at the beginning of our fiscal year 2023.
We commercialized five initial Good Manufacturing Practice (GMP) proteins manufactured in our 61,000-square foot, state-of-the-art GMP-compliant manufacturing facility in St. Paul, Minnesota at the scale and capacity necessary to meet current and forecasted demand. GMP proteins are an essential component for many immune-oncology and regenerative medicine cell and gene-modified therapy workflows.
We signed an exclusive agreement with Thermo Fisher Scientific to complete the development and commercialization of the ExoTRU kidney transplant rejection test developed by Exosome Diagnostics, a Bio-Techne brand.
GAAP net earnings were $272 million, while net earnings (adjusted) were $323.5 million. GAAP earnings per share were $6.63 per diluted share versus $3.47 per diluted share last fiscal year. GAAP EPS was favorably impacted by a non-operating mark-to-market gain of $16 million on our ChemoCentryx investment, compared to a loss on investment of $68 million in the prior fiscal year. Adjusted EPS was $7.89 per diluted share, compared to $6.76 in fiscal year 2021, representing an increase of 17%.*
GAAP operating margin was 26.8%, compared to 25.5% in fiscal year 2021. Adjusted operating margin for fiscal year 2022 decreased to 38.3%, compared to 39.1% in the prior year, unfavorably impacted by foreign currency exchange, the full-year impact of the prior year’s Asuragen acquisition, and strategic investments.*
   
* See Appendix A for a reconciliation of adjusted financial measures to GAAP for 2022 and 2021 fiscal years.

 

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Long-Term Performance

 

Our record of delivering strong shareholder returns reflects our commitment to creating long-term shareholder value.

 

 

Governance Highlights

 

BOARD COMPOSITION   BOARD ACCOUNTABILITY

 

   Eight of nine directors are independent

 

   Separate Board Chair and CEO roles

 

   All chairs and members of all Board committees are independent

 

   Balance of industry, scientific, and functional expertise among directors

 

   Policy requiring directors to retire when they reach the age of 75

 

   Regular refreshment, with a current average tenure of 11 years of service

 

 

 

   Annual election of directors

 

   Majority voting in uncontested director elections (through director resignation policy)

 

   Annual Board and committee evaluations

 

   Regular executive sessions of non-management directors

 

   Stringent executive and director equity ownership guidelines

 

   Ongoing shareholder engagement program includes active director participation

 

SHAREHOLDER INTERESTS   RISK MANAGEMENT

 

   Second Corporate Sustainability Report to be issued in fall of 2022

 

   Annual “say-on-pay” vote

 

   One single voting class of common stock

 

   No shareholder rights plan

 

   Proxy access to nominate director candidates

 

   Shareholders have right to call a special meeting

 

 

 

   Risk assessment and oversight is an integral part of Board and committee deliberations throughout the year

 

   Management gives periodic reports to the Board on cybersecurity, privacy, environmental and compliance risks

 

   Compensation Committee oversees compensation and other risks related to human capital management

 

   Audit Committee oversees financial, fraud, and conflicts risks, as well as financial impacts related to compliance and cyber incidents

 

   Nominations and Governance Committee oversees company culture, ethics, conflicts of interest, and other governance risks

 

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Shareholder Engagement Highlights

 

Bio-Techne values hearing shareholder perspectives. Management meets frequently with key shareholders to discuss the Company’s financial performance and strategies, executive compensation, governance, and social and environmental issues.

 

67%
of shareholders of Bio-Techne’s outstanding common stock met with management and directors during 2022

 

One of the goals of those engagements was to understand shareholder concerns that led to a disappointing say-on-pay vote at our most recent annual meeting of shareholders. While some shareholders expressed concerns about certain elements of our executive compensation program, shareholders were generally positive about Bio-Techne’s financial performance and governance positions, as well as our initiatives with respect to sustainability.

 

Many of the changes we have made to our corporate governance practices recently are the direct result of feedback from shareholders and other stakeholders, including:

 

Allocating and clarifying oversight responsibilities for sustainability-related risks and activities
Clarifying that the full Board retains oversight of cyber-related risks and mitigation measures, while the Audit Committee oversees management’s response to cyber incidents
Increasing the levels of share ownership directors and executive officers are required to maintain within five years of assuming office—tripling the ownership guidelines for directors and executive officers, and increasing the ownership guidelines for the CEO from 3 times base salary to 6.
Amending the bylaws to clarify the process for shareholder nominations of director candidates and submissions of shareholder proposals, as well as the procedures for shareholders to call a special meeting.

 

For a detailed discussion of our engagement specifically on executive compensation matters, see “Compensation Discussion & Analysis—Addressing Shareholder Concerns,” which begins on page X.

 

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Information About The Nominees

 

The following is an overview of our nominees for election as directors at the 2022 Annual Meeting. Directors are elected annually by a majority of votes cast. All of the nominees are independent except Mr. Kummeth.

 

      Committee Membership                
Name and Principal Occupation             Director
Since
  Age   Gender   Under-
represented
Minority
Robert V. Baumgartner
Former Executive Chairman, Center for Diagnostic Imaging
  0               2003   66   M    
Julie L. Bushman
Former EVP International Operations, 3M
  2                 2020   61   F    
John L. Higgins
President and CEO, Ligand Pharmaceuticals
  1               2009   52   M    
Joseph D. Keegan
Advisor and Board Director
  1                 2017   69   M    
Charles R. Kummeth
President and CEO, Bio-Techne Corporation
  1                   2013   62   M    
Roeland Nusse
Professor, Stanford University
  0                 2010   72   M    
Alpna Seth
Former President and CEO, Nura Bio Inc.
  1               2017   59   F  
Randolph Steer
Biotechnology Consultant and Board Director
  0               1990   72   M    
Rupert Vessey
President of Global Research & Early Development, Bristol Myers Squibb
  0               2019   57   M    

 

Member Committee Chair

 

Our strong performance during fiscal year 2022 can be partially attributed to our experienced board of directors. As shown below, our predominantly independent board includes a range of newer and tenured directors with a balanced and diverse mix of experience, education, and talents.

 

 

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Director Qualifications and Experience

 

Below is a snapshot of the skills and experience of the Board nominees

 

 

Sustainability Highlights

 

During fiscal 2022, we made significant progress identifying, documenting, and (when possible) measuring our ongoing efforts to become a better corporate citizen. We group our sustainability commitments into four key pillars:

 

Our People Advancing Science Governance & Operational Integrity The Environment

 

Our 2022 Corporate Sustainability Report, which will be published this fall, includes details on the progress the Bio-Techne team has made in each of these key pillars in the past few years. This latest sustainability report will include increased disclosure regarding our fourth pillar, The Environment. For the first time, we are including an inventory of our Scope I and Scope II greenhouse gas (GHG) emissions data for our largest U.S.- and European-based manufacturing facilities. Products manufactured in these facilities accounted for 99% of Bio-Techne’s fiscal 2022 revenue.

 

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Executive Compensation Highlights

 

With our strategic focus on growing the business over the long term, our executive compensation program motivates our talented management team by rewarding successful execution of our short-term business plans and our longer-term sustainable strategies. Moreover, our executive pay program has a strong pay-for-performance foundation, aligned to the financial goals we believe are most effective at driving long-term shareholder value creation, so that executives and long-term shareholders alike can benefit from Bio-Techne’s success and growth. Consequently, while the balance of the components in our compensation program may change slightly from year to year, our executives’ total pay mix is heavily weighted toward at-risk, performance-based compensation elements.

 

    Type   Element   Objective
  Fixed   Base Salary   Recognizes an individual’s role and responsibilities and serves as an important retention vehicle
  Performance-based   Annual Bonus   Rewards achievement of annual Company-wide and segment financial objectives for revenue and operating income
  Performance-based   Performance-based Share Options and Restricted Share Units   Supports the achievement of corporate strategic goals for long-term revenue and operating income that drive the creation of long-term, sustainable shareholder value
  Performance- and Time-based   Time-Based Share Options and Restricted Share Units   Aligns the interests of management and shareholders and serves as an important retention vehicle

 

 

The performance measures that apply to annual and long-term incentive awards—revenue and operating income—reflect our focus on both organic top-line growth and operational efficiency and profitability. Both measures represent cash generation, which we believe drives external valuation of the Company and therefore shareholder value.

 

Pay for Performance Alignment

 

The following graph illustrates Bio-Techne’s TSR performance compared to reported pay for our CEO over the past five years. As indicated, the increase in value created for shareholders has far outpaced the increases in Mr. Kummeth’s compensation over that time period, despite the fiscal year 2022 reduction in TSR.

 

 

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Proposal 1: Size of the Board

 

Proposal 1. Set the Number of Directors at Nine

 

THE BOARD RECOMMENDS A VOTE FOR SETTING THE NUMBER OF DIRECTORS AT NINE.

 

We believe that a nine-member Board continues to be the most effective size for Bio-Techne.

 

Our bylaws provide that the number of directors must be determined by shareholders at each Annual Meeting. Your Board unanimously recommends that the number of directors be set at nine. Approval of this proposal 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 and (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.

 

Proposal 2: Election of Directors

 

Proposal 2. Elect the Nine Director Nominees Identified in this Proxy Statement, Each for a Term of One Year

 

THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NINE DIRECTOR NOMINEES.

 

Our nominees constitute a diverse group of exemplary leaders who bring a range of relevant skills and expertise to their roles.

 

The nine directors elected at this Annual Meeting will hold office until the 2023 Annual Meeting of Shareholders and until their successors have been elected and qualified or until their earlier death, resignation, or removal. Each nominee has agreed to serve as a director if elected. If any nominee declines or becomes unable or unavailable to serve as a director for any reason, the individual(s) designated as your proxy will be authorized, in their discretion, to vote for a replacement nominee if the Board names one. As an alternative, the Board may reduce the number of directors to be elected at the Annual Meeting.

 

If the number of director nominees is equal to (or less than) the number of directors to be elected (known as an “uncontested election”), directors will be elected by a majority vote; directors who receive a greater number of “FOR” votes than “AGAINST” votes will be elected. In an uncontested election, an incumbent director who does not receive a majority of the votes cast “FOR” his or her election must offer to tender a resignation to the Board’s Nominations and Governance Committee. The Board, taking into account the recommendation of the Nominations and Governance Committee, will act on a tendered resignation and publicly disclose its decision within 90 days of receiving certification of the election results. If the Board does not accept such a resignation, the director will continue to serve until the next annual meeting and until a successor is duly elected.

 

If the number of director nominees exceeds the number of directors to be elected (a “contested election”), directors will be elected by a plurality of votes cast.

 

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How We Choose Directors

 

Board Refreshment

 

The Board continues to consider regular refreshment of its membership as an important governance consideration. Over the last nine years, as the Company’s size and scope have significantly expanded, we have undergone a thoughtful, gradual board refreshment process. In 2014, we implemented a provision in our Principles of Corporate Governance providing that director nominees, including incumbent directors, may not be older than 74. As a result, four independent directors have retired and been replaced over the past eight years, and the average director tenure has dropped from 13 years in 2014 to approximately 11 years currently. We expect to continue this refreshment process as two of the current eight independent directors reach retirement age.

 

Qualities of Prospective Nominees

 

The Nominations and Governance Committee periodically assesses the appropriate size of the Board of Directors, whether any vacancies are expected due to retirement or otherwise, and the skills and experience needed of directors to properly oversee Bio-Techne’s short- and long-term interests. If vacancies are anticipated, or otherwise arise, the Nominations and Governance Committee considers multiple potential candidates for director. Candidates may come to the Committee’s attention through current members of the Board of Directors, professional search firms, shareholders, or other sources, and may be considered at any point during the year. The ultimate goal is to maintain a well-rounded Board that functions collegially and independently.

 

Candidates for the Board are considered and selected on the basis of criteria including outstanding achievement in their professional careers; experience; wisdom; personal and professional integrity; the ability to make independent, analytical inquiries; and an understanding of the business environment. Candidates must have the experience and skills necessary to understand the Company’s principal operational and functional objectives and plans, results of operations and financial condition, and position in our industry. Candidates also 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. With respect to incumbent directors, the Nominations and Governance Committee also considers past performance on the Board and contributions to the Company, in part through an annual assessment process.

 

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Relevant Skills and Experience

 

As a highly acquisitive science-based company, we seek to have a board with a mix of science/technology and business expertise. Our directors reflect this balance, and also have a diverse mix of other skills and experience needed to help drive our strategies. The following describes the specific skills and experience we seek in directors to support the Company’s strategic vision and business, and the number of our director nominees with each skill.

 

 

 

8 of 9

 

 

 

 

7 of 9

 

 

 

 

5 of 9

 

 

 

 

7 of 9

 

                     
Executive Leadership   Industry   Scientific/Technical   Global
                     
Senior level managerial experience brings a broad perspective and knowledge to engage with management in meaningful discussions of our strategy and related strategic risks, including people management.   The life science tools and diagnostics industry is complex and technology-focused, so having directors with experience in this business, either as executives or customers, is a significant advantage.   Many of our strategic decisions, including especially our M&A initiatives, require significant understanding of advanced scientific knowledge.   Knowledge about operating outside the U.S. is important as we face the complexities of global markets, especially considering almost half of our business comes from outside the United States and our strategies include expansion into additional international markets.
                     

 

 

6 of 9

 

 

 

 

8 of 9

 

 

 

 

8 of 9

 

 

 

 

6 of 9

 

                     
Finance/Accounting   Risk Oversight/   Mergers & Acquisition   Operations
Familiarity with complex financial and accounting concepts and a deep understanding of financial statements are vital for helping the Board perform its oversight function.  

Management

An understanding of how to identify, assess, and mitigate risks is a key attribute—particularly for a growth-oriented company such as Bio-Techne.

  Since one of our key growth strategies is to acquire companies that expand our product offerings and increase revenue, experience with assessing acquisition opportunities and risks is an important oversight capability.   We make and sell hundreds of thousands of different products, including some that are regulated by the FDA, so having directors who understand the manufacturing and supply chain complexities of our operations helps us identify associated strategic risks and opportunities.
             

 

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Director Diversity

 

While the Company does not have a formal diversity policy for Board membership, we seek directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. The Nominations and Governance Committee considers, among other factors, diversity with respect to perspectives, backgrounds, skills, and experience in its evaluation of candidates for Board membership. Such diversity considerations are discussed in connection with the general qualifications of each potential nominee. At the recommendation of the Nominations and Governance Committee, the Board last year amended its Principles of Corporate Governance to formalize Bio-Techne’s commitment to diversity in all respects, including specifically diversity of gender, ethnicity, and race. This year for the first time, the Board asked directors to voluntarily disclose information to help assess their status as underrepresented minorities. The Company is committed to actively seeking out highly qualified diverse candidates, including women and minority candidates, to include in the pool from which Board nominees are chosen.

 

Shareholder Recommendations of Nominees

 

Shareholders are welcome to recommend candidates for consideration by the Nominations and Governance Committee. Recommendations may be sent to the attention of the Nominations and Governance Committee at the Company’s address: 614 McKinley Place N.E., Minneapolis, MN 55413. Any such recommendations should provide whatever supporting material the shareholder considers appropriate, but should at a minimum include background and biographical material so the Committee can make an initial determination as to whether the prospective nominee satisfies our criteria for directors. The Nominations and Governance Committee will apply the same criteria in evaluating candidates recommended by shareholders as it uses for candidates that come to the Committee’s attention from other sources.

 

Shareholders who intend to directly nominate a candidate for election by the shareholders at the Annual Meeting (rather than recommending the candidate to the Nominations and Governance Committee) must comply with the procedures described later in this Proxy Statement under “Additional Corporate Governance Matters—Shareholder Proposals for 2023 Meeting” and with Bio-Techne’s bylaws.

 

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Nominees for Director

 

We believe all of our director nominees bring to our Board the practical wisdom and strong professional characteristics, judgment, and leadership abilities necessary to keep Bio-Techne performing competitively in the market. The following biographies describe the nominees’ noteworthy experience, individual qualifications, and skills that we believe contribute to our Board’s effectiveness and success.

 

Robert V. Baumgartner
     

Age: 66

Director
since: 2003

Chair
since: 2012

INDEPENDENT
CHAIR OF THE
BOARD

 

 

Professional Background

From 2001 until July 2019, Mr. Baumgartner served as Executive Chairman, Director of the Center for Diagnostic Imaging, Inc., an operator of diagnostic imaging centers. Prior to August 2015, Mr. Baumgartner also served as Chief Executive Officer of that company. Before joining the Center for Diagnostic Imaging, he held numerous executive positions, including Chief Executive Officer and Director of American Coating International, President and Chief Executive Officer of First Solar, and President of the Apogee Glass Group. Mr. Baumgartner began his professional career at KPMG LLP, an international accounting firm.

 

Other Affiliations

Mr. Baumgartner currently serves as a director of the boards of Carestream and OIA Global, both privately-held companies, and serves as an advisor to Sirona Medical.

 

Education

Bachelor’s degree in business administration, University of Notre Dame.

 

Key Experience and Qualifications

 

Mr. Baumgartner brings to the Board valuable strategic skills and financial and operational management expertise. His more than 20 years serving as Chief Executive Officer and Executive Chairman of large, complex businesses gives him extensive experience in finance, accounting, and business leadership. Mr. Baumgartner also offers important board-level experience, as well as knowledge of Bio-Techne’s business and industry gleaned in his years serving on the Board.

 

Julie L. Bushman
     

Age: 61

Director
since: 2020

Other Public Boards

•  Adient, plc. (since 2016)

•  Phillips 66 (since 2020)

INDEPENDENT

 

Professional Background

Ms. Bushman retired in February 2020 from 3M Corporation, where she most recently served as Executive Vice President of International Operations. She joined 3M in 1983, and served in various executive positions, including Senior Vice President of Business Transformation and Information Technology; Executive Vice President of Safety, Security and Protection Services; Executive Vice President of Safety and Graphics; Division Vice President of the Occupational Health and Environmental Safety Division; and Chief Information Officer.

 

Education

Bachelor of Science, University of Wisconsin-River Falls.

 

Key Experience and Qualifications

 

In her various roles with 3M, Ms. Bushman developed extensive global experience from managing international operations and a global business in personal safety. She also has broad digital, software, and CIO experience, which bring important expertise in IT and cybersecurity matters as the Company continues to expand globally and integrate systems to increase operational efficiencies. Her experience with public company requirements as both an executive officer and as a director is also valuable.

 

Executive Leadership       Industry       Scientific/Technical       Global  
Finance/Accounting   Risk Oversight/Management   Mergers & Acquisitions   Operations  

 

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John L. Higgins
     

Age: 52

Director
since: 2009

Other Public Boards

•  Ligand Pharmaceuticals, Inc. (since 2007)

INDEPENDENT

 

Professional Background

Mr. Higgins has been President and Chief Executive Officer and a member of the Board of Directors of Ligand Pharmaceuticals, Inc. since 2007. From 1997 until joining Ligand, Mr. Higgins was with Connetics Corporation, a specialty pharmaceutical company, as its Chief Financial Officer, and also served as Executive Vice President, Finance and Administration and Corporate Development from 2002 until 2006. Mr. Higgins was previously a member of the executive management team and a director at BioCryst Pharmaceuticals, Inc., a biopharmaceutical company. Earlier in his career, Mr. Higgins was a member of the healthcare banking team of Dillon, Read & Co. Inc., an investment banking firm. Mr. Higgins has served as a director of numerous public and private companies.

 

Education

Bachelor’s degree in economics, Magna Cum Laude, Colgate University.

 

Key Experience and Qualifications

 

Mr. Higgins offers the Board over 20 years of industry experience through his role as Chief Executive Officer of Ligand Pharmaceuticals and leadership roles in other pharmaceutical companies. His role with Ligand has given him vital experience in the application of strategic leadership skills within our industry, as well as extensive public company executive and board experience.

 

Joseph D. Keegan, Ph.D.
     

Age: 69

Director
since: 2017

Other Public Boards

•  Interpace Diagnostics (since 2016)

INDEPENDENT

 

 

Professional Background

Dr. Keegan serves as a director and advisor for Interpace Diagnostics. From 2007 until 2012, Dr. Keegan served as President and Chief Executive Officer of ForteBio, Inc., a life science tools company. He joined ForteBio after serving as President and Chief Executive Officer of Molecular Devices Corporation from 1998 to 2007. Earlier in his career, Dr. Keegan held leadership positions at Becton Dickinson, Leica, Inc., and GE Medical Systems.

 

Other Affiliations

Dr. Keegan has served on numerous public and private company boards of life science tools companies, including as Chair of Fluidic Analytics and Executive Chair of Halo Labs.

 

Education

Ph.D. in Physical Chemistry, Stanford University.

 

Key Experience and Qualifications

 

Dr. Keegan brings an important life science background to the Board from his career working at a number of life sciences companies, with a focus on diagnostics. His knowledge of the Company’s customers and products is especially valuable. Dr. Keegan further offers extensive executive management experience and board-level experience through his past and present service on other private and public company boards.

 

Executive Leadership       Industry       Scientific/Technical       Global  
Finance/Accounting   Risk Oversight/Management   Mergers & Acquisitions   Operations  

 

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Charles R. Kummeth
     

Age: 62

Director
since: 2013

Other Public Boards

•  Gentherm, Inc. (since 2018) 

 

Professional Background

Mr. Kummeth has been President, Chief Executive Officer, and member of Bio-Techne’s Board since 2013. Prior to joining the Company, he served in executive roles at Thermo Fisher Scientific Inc., including President of Mass Spectrometry and Chromatography and President of the Laboratory Consumables Division. Prior to joining Thermo Fisher, Mr. Kummeth served in various roles during a 24-year career at 3M Corporation, most recently as Vice President of the Medical Division.

 

Education

Master of Science in computer science, University of St. Thomas, and Master of Business Administration, Carlson School of Business at the University of Minnesota.

 

Key Experience and Qualifications

 

As the only member of management to serve on the Board, Mr. Kummeth provides key insight into the Company’s day-to-day operations, challenges, and opportunities. Mr. Kummeth’s service on the Board also promotes strategy development and implementation and facilitates the flow of information between the Board and management. Mr. Kummeth further offers extensive significant executive management experience and expertise leading the growth of biotechnology companies.

 

Roeland Nusse, Ph.D.
     

Age: 72

Director
since: 2010

INDEPENDENT

 

 

Professional Background

Dr. Nusse has been a professor or associate professor in the Department of Developmental Biology at Stanford University and an investigator at the Howard Hughes Medical Institute since 1990. He has also been the chair of the Department of Developmental Biology at Stanford since 2007. Dr. Nusse previously was at the Netherlands Cancer Institute (in Amsterdam) as a staff scientist and ultimately served as head of the Department of Molecular Biology. Dr. Nusse was awarded the Breakthrough Prize in Life Sciences in 2016.

 

Other Affiliations

Dr. Nusse was elected to the United States National Academy of Sciences in 2010, the European Molecular Biology Organization in 1988, the Royal Dutch Academy of Sciences in 1997, and the American Academy of Arts and Sciences in 2001.

 

Education

Ph.D. in molecular biology, Netherlands Cancer Institute.

 

Key Experience and Qualifications

 

Dr. Nusse brings valuable experience to the Board from his longstanding career as a researcher and department chair at Stanford University, including strategic leadership and scientific and industry knowledge, which gives him insight into the Company’s products, customers, and markets. Dr. Nusse also has a deep understanding of and contacts within the international life science research community.

 

Executive Leadership       Industry       Scientific/Technical       Global  
Finance/Accounting   Risk Oversight/Management   Mergers & Acquisitions   Operations  

 

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Alpna Seth, Ph.D.
     

Age: 59

Director
since: 2017

Other Public Boards

•   SeaGen, Inc. (since 2018)

INDEPENDENT

 

 

Professional Background

Dr. Seth recently retired as President and Chief Executive Officer of Nura Bio Inc., a biopharmaceutical company focused on the discovery of novel neuroprotective drugs, where she served for three years. From July 2017 through 2018, she was Chief Operating Officer of Vir Biotechnology, Inc., an immunology company. Prior to joining Vir, Dr. Seth was at Biogen Inc. for nearly two decades, most recently as Senior Vice President and Global head of the Biosimilars business, headquartered in Switzerland. For the period from 1998 through 2014, Dr. Seth held a range of senior leadership roles across R&D and commercial arenas. In this capacity, she led several major drug development programs and product launches, along with strategic, business development, and long-range planning initiatives. In another international general management assignment, Dr. Seth served as the founding Managing Director of an India affiliate and was a member of Biogen’s Asia Pacific Leadership Team.

 

Education

Ph.D. in Biochemistry and Molecular Biology, University of Massachusetts Medical School. Conducted post-doctoral research at Harvard University in Immunology and Structural Biology, both as a Howard Hughes Medical Institute Fellow.

 

Key Experience and Qualifications

 

Dr. Seth brings a breadth of experience in research, drug discovery, marketing, international operations, financial management, and business development. Her extensive background in the pharmaceutical industry and in international business and her deep knowledge of critical areas of science provide a valuable strategic perspective for our business generally and for a key customer group.

 

Randolph Steer, M.D., Ph.D.
     

Age: 72

Director
since: 1990

INDEPENDENT

 

 

Professional Background

Dr. Steer is an independent biotechnology consultant and board director. He served as President and Chief Operating Officer of Capstone Therapeutics Corp. from 2006 to 2011. From 1989 to 2006 Dr. Steer was a consultant to the pharmaceutical and biotechnology industries, advising companies in business development, medical marketing, and regulatory and clinical affairs. His prior experience includes service as Associate Director of Medical Affairs at Marion Laboratories and as Medical Director at Ciba Consumer Pharmaceuticals.

 

Other Affiliations

Dr. Steer was elected to the Mayo Clinic Board of Trustees in 2011, and previously served as a director of publicly-traded Vital Therapies, Inc. (now Immunic, Inc.).

 

Education

Ph.D. in pathobiology, University of Minnesota, and medical degree from the Mayo Medical School.

 

Key Experience and Qualifications

 

Dr. Steer offers the Board a strong medical and scientific background. Moreover, his experience in executive leadership and in board management, together with his knowledge of the pharmaceutical and biotechnology industries, enable him to provide valuable strategic insight. As the longest tenured member of the Board, Dr. Steer also offers an understanding of the Company’s development.

 

Executive Leadership       Industry       Scientific/Technical       Global  
Finance/Accounting   Risk Oversight/Management   Mergers & Acquisitions   Operations  

 

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Dr. Rupert Vessey, MA, BM BCh, FRCP, DPhil
     

Age: 57

Director
since: 2019

INDEPENDENT

 

 

Professional Background

Dr. Vessey has been the President of Research and Early Development at Bristol-Myers Squibb since 2019. Previously, he was President of Global Research and Early Development at Celgene from 2015 to 2019. During that time, Dr. Vessey also served on the board of Juno Therapeutics for one year. Before joining Celgene, Dr. Vessey held various research and development senior management positions during his 10-year tenure at Merck.

 

Other Affiliations

Dr. Vessey is a member of the Royal College of Physicians of London UK. He serves on the Board of Pharmakea, a privately-held therapeutics company.

 

Education

MA in physiological sciences and BM BCh in clinical medicine from Oxford University. DPhil at the Institute for Molecular Medicine, Oxford.

 

Key Experience and Qualifications

 

Dr. Vessey was selected to serve on the Board because of his exceptional background in medical and life science research and development with Bristol-Myers Squibb, Celgene, Merck, and other companies, and his extensive experience as an executive in the pharmaceutical industry, a key customer group for the Company. His international research and business experience is also important to the Board as the Company continues to expand in markets outside of the United States.

 

Board Diversity Matrix (As of June 30, 2022)
Total Number of Directors   9
    Female   Male
Part I: Gender Identity        
Directors   2   7
Part II: Demographic Background        
Asian   1   0
White   1   7

 

Executive Leadership       Industry       Scientific/Technical       Global  
Finance/Accounting   Risk Oversight/Management   Mergers & Acquisitions   Operations  

 

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Corporate Governance

 

The Role of the Board

 

The Board of Directors is Bio-Techne’s governing body, with responsibility for oversight, counseling, and direction of management to serve the short- and long-term interests of the Company and its shareholders. The Board’s goal is to build long-term value for shareholders and to ensure Bio-Techne’s vitality for the customers, employees, and other individuals and organizations that depend on us. To achieve that goal, the Board monitors both the performance of the Company and the performance of the CEO. The Board also is integrally involved in strategic planning and enterprise risk management, in partnership with the management team. It regularly undertakes an in-depth review of management’s long term and short-term strategic plan, and periodically provides input as the strategic plan is implemented and evolves.

 

Governance Documents

 

The Board recently revised and refreshed its Principles of Corporate Governance, which can be found on the Investor Relations page of our website at www.bio-techne.com. The Principles of Corporate Governance describe the Company’s corporate governance practices and policies and provide a framework for Bio-Techne’s governance. Among other things, they establish requirements and qualifications for members of the Board and specify the Board’s leadership structure and standing committees.

 

The Bio-Techne Code of Ethics and Business Conduct and the charters for each of the Board’s four standing committees also are available on our website under “Investor Relations—Governance.”

 

Board Independence

 

Bio-Techne’s Principles of Corporate Governance provide that a majority of the Board must be independent directors under criteria established by the Board in conformity with the listing rules of the Nasdaq Stock Market. The Nominations and Governance Committee annually reviews the independence of each director, including whether there are any related party transactions. In making its independence determinations, the Nominations and Governance Committee reviewed transactions and relationships between each director or any member of a director’s immediate family on one side, and the Company or any of its subsidiaries on the other side, based on information provided by the directors and from Company records and publicly available information. The Committee determined and the Board confirmed that all of the Company’s non-employee directors are independent.

 

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Board Leadership Structure

 

Bio-Techne’s Principles of Corporate Governance do not require the roles of CEO and Chair to be separate or combined. Instead, they assign to the Nominations and Governance Committee the responsibility of periodically assessing the needs of the Board and determining whether the leadership structure in place at the time is appropriate.

 

For now, the Board has determined that separating the roles of Chair and CEO and maintaining a majority independent Board supports the Board’s independent oversight of management, ensures that the appropriate level of independence is applied to all Board decisions, and is the most effective leadership structure for the Company.

 

  Robert V. Baumgartner     Charles R. Kummeth
  Independent Chair of the Board     President & CEO
 

  assists the Nominations and Governance Committee with succession planning for the CEO

  sets the agenda for Board meetings

  presides over meetings of the full Board

  presides over executive sessions of the independent directors

   

  executes the Board’s direction

  is responsible for the day-to-day leadership and performance of the Company

 

 

To bolster the Board’s independent oversight, each of the four Board committees consists entirely of independent directors.

 

Risk Oversight

 

Risk assessment and oversight is an integral part of Board and committee deliberations throughout the year. The Board administers some of its risk oversight function through its committees, as described below.

 

The Board of Directors
Some categories of risk—those related to strategy, technology, cybersecurity, and operations, and those arising from environmental and social matters—are reviewed directly by the entire Board. In performing their oversight responsibilities, the Board and its committees review policies and guidelines that senior management use to manage Bio-Techne’s exposure to material categories of risk. In addition, the Board and its committees review the performance and execution of the Company’s overall risk management function and management’s establishment of appropriate systems for managing risk.
 
 
The Audit Committee The Compensation
Committee
The Nominations and
Governance Committee
The Science and
Technology Committee
has oversight responsibility with respect to the Company’s financial risk assessment and financial risk management. The Audit Committee meets regularly with management and the independent auditors to review the Company’s risk exposures, the potential financial impact those risks may have, the steps management takes to address those risks, and how management monitors emerging risks. Risk exposures may include compliance, legal, regulatory, and cyber incident risks, among others. structures the Company’s compensation plans and programs to balance risk and reward, while mitigating the incentive for excessive risk-taking by our executive officers and employees. As part of its oversight of human capital management generally, the Compensation Committee also oversees non-compensation risks related to other elements of attracting and retaining talent. oversees the management of risks associated with the composition and independence of the Board, as well as general corporate governance risks and policies. The Nominations and Governance Committee receives regular reports from management on the Company’s ethics and compliance programs and culture. reviews the Company’s technology and scientific programs, including the risks associated with selecting and pursuing such programs in light of evolving customer needs and competitor activities.

 

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Each of the Board’s committees has risk oversight duties corresponding to its areas of responsibility, as described in its charter.

 

The risk oversight roles described above are not merely academic exercises. As we adjust to the changes resulting from the pandemic, for example, the Board continues to receive regular reports from management on the implications and effects of the pandemic on the Company’s business and provides guidance on management’s responses.

 

Board Self-Assessments

 

Each year, before beginning the nomination process, the Nominations and Governance Committee conducts an evaluation of the Board’s performance and reports to the Board respecting its conclusions and recommendations. Individual directors are assessed periodically as part of this evaluation. In addition, the Nominations and Governance Committee helps each other standing committee to periodically evaluate its performance.

 

Board Committees

 

The Board currently has four standing committees: Audit, Compensation, Nominations and Governance, and Science and Technology. Each committee is governed by a written charter that was approved by the Board and is reviewed annually. The four charters are available on our website at www.bio-techne.com in the “Investor Relations” section under “Corporate Governance.” The Board has, on occasion, established committees to deal with particular matters the Board believes appropriate to be addressed in that manner, but no such committees were created in fiscal year 2022.

 

Committee members are appointed by the Board each year, generally for a term of one year. The membership of each standing committee as of June 30, 2022, and the number of committee meetings held during fiscal year 2022, are shown below. The Board has determined that the members of all of the committees are independent.

 

Director Audit Compensation Nominations &
Governance
Science &
Technology
Robert V. Baumgartner    
Julie L. Bushman      
John L. Higgins    
Joseph Keegan, Ph.D.      
Charles R. Kummeth        
Roeland Nusse, Ph.D.      
Alpna Seth, Ph.D.    
Randolph C. Steer, M.D., Ph.D.    
Rupert Vessey, MA, BM BCh, FRCP, DPhil    
Number of meetings held during FY 2022 8 4 3 2

 

Member Committee Chair

 

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Audit Committee

Members:

  John L. Higgins (Chair)

  Robert V. Baumgartner

  Julie L. Bushman

NUMBER OF MEETINGS HELD DURING FY 2022: 8

The Audit Committee is responsible for:

  appointing, supervising, and evaluating the Company’s independent registered public accounting firm;

  reviewing the Company’s internal audit procedures and quarterly and annual financial statements;

  monitoring the Company’s internal controls over financial reporting and the results of the annual audit;

  overseeing the Company’s cash investment policy; and

  monitoring cybersecurity incidents, our financial fraud hotline, and other compliance matters with a potential financial impact.

 

 

The Board has determined that each member of the Audit Committee meets the enhanced independence requirements prescribed by applicable rules of the Securities and Exchange Commission (“SEC”) and Nasdaq listing standards. In addition, for fiscal 2022, the Board has determined that Messrs. Baumgartner and Higgins are “audit committee financial experts” as such term is defined in applicable SEC rules.

 
Compensation Committee

Members:

  Randolph Steer (Chair)

  Joseph D. Keegan

  Rupert Vessey

NUMBER OF MEETINGS HELD DURING FY 2022: 4

The Compensation Committee is responsible for:

  establishing the compensation and performance goals for the CEO;

  working with the CEO to determine base and incentive compensation and performance goals for Bio-Techne’s other executive officers;

  establishing overall policies for executive compensation;

  reviewing the performance of the executive officers;

  recommending to the Board and administering director compensation policies and practices; and

  overseeing the Company’s management of human capital generally, including associated risks.

 

 

The Board has determined that each member of the Compensation Committee meets the enhanced independence requirements prescribed by applicable SEC rules and Nasdaq listing standards.

   
Nominations and Governance Committee

Members:

  Robert V. Baumgartner (Chair)

  John L. Higgins

  Alpna Seth

NUMBER OF MEETINGS HELD DURING FY 2022: 3

The Nominations and Governance Committee is responsible for:

  recruiting well-qualified candidates for the Board

  selecting individuals to be nominated for election as directors;

  determining whether each member of the Board is independent;

  establishing governance standards and procedures to support and enhance the performance and accountability of management and the Board

  considering the composition of the Board’s standing committees and recommending any changes;

  evaluating overall Board performance;

  assisting committees with self-evaluations;

  monitoring emerging corporate governance trends; and

  overseeing the Company’s ethics program and monitoring the Company’s culture.

 
Science and Technology Committee

Members:

  Roland Nusse (Chair)

  Alpna Seth

  Randolph Steer

  Rupert Vessey

NUMBER OF MEETINGS HELD DURING FY 2022: 2

The Science and Technology Committee is responsible for:

  assisting the Board in providing oversight of management’s actions and judgments relating to the Company’s research and development activities, including its strategies, objectives, and priorities as they relate to current and planned R&D programs and technology initiatives;

  assisting the Board in evaluating the scientific elements of the Company’s acquisitions and business development activities and risks related to research and development; and

  reviewing and advising the Board and management on the Company’s overall intellectual property strategy.

 

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Shareholder Engagement

 

Bio-Techne values learning about shareholders’ perspectives. To that end, management meets frequently with key shareholders to discuss the Company’s financial performance and strategies. In addition, over the last several years, we have carried out and expanded a shareholder engagement program to discuss governance matters—both proactively and in response to requests from shareholders.

 

Regular engagement — June
 
Reached out to
shareholders owning over half of our outstanding shares
  Held meetings with
shareholders representing over 40% of our outstanding shares
  Participants included
members of management, the Board Chair (who also serves as chair of the Nominations & Governance Committee), and the chair of the Compensation Committee
  Topics included
a business update and various governance, executive compensation, and sustainability issues

 

Generally, shareholders were quite pleased with Bio-Techne’s financial and share performance, appreciated the leadership of current management and the Board, and did not express any notable concerns. There were several suggestions regarding our executive compensation program, which are addressed in detail in the Compensation Discussion and Analysis section under the heading “Addressing Shareholder Concerns,” which begins on page X.

 

As the 2021 Annual Shareholder Meeting approached, proxy advisory firms recommended opposing our say-on-pay proposal. In response, we conducted additional engagement discussions.

 

Additional engagement before the Annual Shareholder Meeting — October
 
Connected with shareholders
representing almost 40% of our outstanding shares, including several of our largest holders
  Participants included
Investor Relations, the Corporate Secretary, and the chair of the Compensation Committee
  Focus was specifically on executive compensation

 

Ultimately, 55.3% of shares outstanding voted in support of the Company’s say-on-pay proposal at the 2021 Annual Shareholder Meeting.

 

The Compensation Committee met in January 2022 to prepare for fiscal year 2022 executive compensation decisions. During that meeting, Dr. Steer reviewed with the Committee the results of the most recent say-on-pay vote, as well as information and perspectives shared by investors during the June and October engagements. The Compensation Committee then determined it would be prudent to reach out to shareholders for additional feedback relating to executive compensation.

 

Post-meeting engagement at the request of the Compensation Committee — February and March
   
Reached out to shareholders
representing over half of our outstanding shares
  Participants included
Investor Relations, Corporate Secretary, and the chair of the Compensation Committee
  Spoke with shareholders
representing about 26% of our shares outstanding

 

For more information on our engagement related to executive compensation, see “Addressing Shareholder Concerns” in the Compensation Discussion and Analysis section below.

 

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Director Orientation and Continuing Education

 

Bio-Techne conducts an orientation process for new directors that includes providing background materials and arranging meetings with senior management and visits to Company facilities. This orientation is designed to familiarize new directors with the Company’s strategic plans; significant financial, accounting, and risk management issues; code of ethics and compliance policies; principal officers and other senior management; and internal and independent auditors and legal counsel.

 

Thereafter, directors are expected to take such action, such as participating in continuing educational programs, as necessary to maintain the level of expertise required to perform their responsibilities as directors. Bio-Techne reimburses Board members for reasonable expenses relating to ongoing director education, subject to certain pre-approval requirements.

 

Limits on Other Boards

 

Service on Bio-Techne’s board requires a significant commitment of time and energy. Therefore, our Principles of Corporate Governance provide that directors may not serve on the boards of other companies if such service would impede their ability to effectively serve on the Company’s Board or would create any potential material conflicts. Directors must have approval from the Board Chair and the Chair of the Nominations and Governance Committee before agreeing to serve on the board of another company, and no independent director may serve on more than four other public company boards. Management personnel, including the Chief Executive Officer and President, may not serve on more than one additional public company board without the approval of the Chair of the Nominations and Governance Committee. In addition, executive officers and non-independent directors are prohibited from serving on the boards of any company where a Bio-Techne independent director is an executive officer.

 

Meetings and Attendance

 

The Board met four times during fiscal year 2022. Each director attended:

 

100% 100%
OF THE BOARD MEETINGS   OF MEETINGS OF THE COMMITTEES
ON WHICH HE OR SHE SERVED

 

Directors meet their responsibilities not only by attending Board and committee meetings but also by conducting business via written actions in lieu of meetings. In addition, directors communicated informally throughout the year on various Board and committee matters with executive management, advisors, and others. All directors attended the Annual Meeting of Shareholders in October 2021.

 

The independent directors of the Board meet in executive session without members of management present on a regular basis. There were 4 such executive sessions in fiscal year 2022. The independent Chair presides over these sessions.

 

How to Contact the Bio-Techne Board

 

Communications from shareholders are always welcome. Communications should be addressed to our Corporate Secretary or Vice President of Investor Relations by email at IR@bio-techne.com or regular mail addressed to the Corporate Secretary, Bio-Techne Corporation, 614 McKinley Place N.E., Minneapolis, MN 55413. Communications are distributed to the Board or to one or more individual directors, as appropriate, depending on the facts and circumstances outlined in the communication. Communications regarding financial or ethical concerns will be forwarded to the chair of the Audit Committee. Communications such as business solicitations or advertisements, junk mail and mass mailings, new product suggestions, product complaints or inquiries, and resumes or other forms of job inquiries will not be relayed to the Board. In addition, material that is unduly hostile, threatening, illegal, or similarly unsuitable will be excluded. Any communication that is filtered out is made available to any director upon request.

 

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Director Compensation

 

The Company believes that compensation for non-employee directors should be competitive and should encourage ownership of Bio-Techne shares. The Compensation Committee periodically reviews the level and form of director compensation and, if it deems appropriate, recommends changes to the Board.

 

Compensation Program for Fiscal Year 2022

 

Director compensation has not changed since 2020. Cash compensation for the non-employee directors was as follows:

 

Every non-employee director $75,000
Board Chair additional $120,000
Chair of Audit Committee additional $25,000
Chair of Compensation Committee additional $17,500
Chairs of other committees additional $15,000

 

These amounts are paid in monthly increments, and are pro-rated for a partial year of service if a director joins the Board other than by election at the annual meeting of shareholders. No additional compensation is paid for membership on committees or attendance at meetings.

 

In addition, on an annual basis, each non-employee director receives an equity grant valued at $200,000 (based on the closing price of Bio-Techne stock on the day of the annual meeting) that vests upon the sooner of the one-year anniversary of the grant date or the next annual shareholder meeting. Equity grants are provided 50% in stock options, with an exercise price equal to the fair market value of Bio-Techne’s common stock on the grant date, and 50% in restricted stock. Non-employee directors who join the Board other than by election at an annual meeting of shareholders receive a pro-rated equity grant based on the portion of the year they will serve.

 

Non-employee directors are reimbursed for the reasonable expenses they incur to attend Board and committee meetings.

 

Directors who are employees of Bio-Techne or its subsidiaries do not receive any additional compensation for service on the Board.

 

Director Stock Ownership Guidelines

 

The Board recently updated the stock ownership guidelines for directors and executive officers to better align their interests with other shareholders. Non-employee directors are now required to own shares at least equivalent in value to five times their annual retainer within five years. All directors except Julie Bushman, who is the most recent addition to the Board, met the requirements as of June 30, 2022.

 

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Compensation Paid to the Non-Employee Directors

 

Directors who are not employees of the Company were compensated for fiscal year 2022 as follows:

 

Name  Fees Earned
or Paid in
Cash(1)
($)
   Share
Awards(2)
($)
   Option
Awards(3)
($)
   All Other
Compensation(4)
($)
   Total
($)
Robert V. Baumgartner  $210,000   $99,957   $99,876   $311   $410,114
Julie L. Bushman   75,000    99,957    99,876    311    275,144
John L. Higgins   100,000    99,957    99,876    311    300,144
Joseph Keegan, Ph.D.   75,000    99,957    99,876    311    275,144
Roeland Nusse, Ph.D.   90,000    99,957    99,876    311    290,144
Alpna Seth, Ph.D.   75,000    99,957    99,876    311    275,144
Randolph C Steer, M.D., Ph.D.   92,500    99,957    99,876    311    292,644
Rupert Vessey, MA, BM BCh, FRCP, DPhi   75,000    99,957    99,876    311    275,144
(1) Amounts consist of annual director fees and chair fees for services on the Company’s Board and its committees. For further information concerning such fees, see the discussion above this table.
(2) The amounts represent the total grant date fair value of equity-based compensation for 194 shares of restricted stock granted pursuant to the Company’s 2020 Equity Incentive Plan in fiscal year 2022 at the grant date market value of $515.24 per share, in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 718. As of June 30, 2022, each non-employee director held 194 unvested restricted shares.
(3) The amounts represent the total grant date fair value of equity-based compensation for 633 stock option awards granted pursuant to the Company’s 2020 Equity Incentive Plan in fiscal year 2022, calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 718. Assumptions used in the calculation of these amounts are described in Note 10 to the Company’s audited financial statements for fiscal year 2022, included in the Company’s Annual Report on Form 10-K. As of June 30, 2022, the following non-employee directors held options to purchase the following number of shares of the Company’s common stock: Mr. Baumgartner-21,419; Mr. Higgins-28,819; Dr. Keegan-9,174; Dr. Nusse-25,419; Dr. Seth-4,151; Dr. Steer-17,419; Dr. Vessey-4,739; and Ms. Bushman-2,501.
(4) Amounts represent the total dollar value of dividends paid on restricted share awards, as those amounts were not factored into the grant date fair value.

 

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Corporate Sustainability

 

We understand that delivering on our mission over the long term requires management to focus on corporate sustainability, including environmental, social, and governance (“ESG”) considerations. In fact, Bio-Techne has always operated with a focus on long-term, sustainable business success.

 

Beginning in 2020, we embarked on a journey to more specifically identify and evaluate those topics and initiatives that would sustainably drive stakeholder value. Our initial assessment resulted in a report that we published in the fall of 2020.

 

Since then, we have continued to build on our earlier work in four ways.

 

We formed a sustainability management and oversight infrastructure. Among other things:

 

We allocated oversight responsibilities among the Board and its committees as described in “Corporate Governance—Risk Oversight” above.
We ensured senior management oversight by creating a Sustainability Oversight Council which is led by the General Counsel and made up of the CEO and others in executive leadership. The Sustainability Oversight Council is charged with leading ESG strategies and managing the various initiatives.
We created a cross-functional Sustainability Working Group that is charged with managing various ESG initiatives and refreshing disclosure of ESG data and efforts.

 

We undertook a more robust materiality assessment. This assessment included an evaluation against the appropriate standards published by the Sustainability Accounting Standards Board, review of various stakeholder interests, conversations with our largest shareholders, and an analysis of peer disclosures and industry best practices, leading to some modifications to our ESG reporting structure and areas of focus.

 

We undertook several new initiatives and data projects. These efforts were focused particularly in the areas of human capital management and environmental practices.

 

We substantially improved our disclosure of ESG matters. Bio-Techne’s 2022 Corporate Sustainability Report will be available on our website at www.bio-techne.com/corporate-and-social-responsibility later in September. It builds on our most recent report in 2020 by adding disclosure about our GHG emissions and additional disclosure regarding human capital, governance, and the role of our products in advancing science and healthcare.

 

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As we considered how to improve our ESG efforts and disclosures, we continued to focus on our “Four Pillars” of corporate sustainability shown below, although these were somewhat modified from our original report in 2020.

 

Pillar Commitment Description

Pillar One

 

Our People Everything starts with our people. Without our dedicated, passionate, and innovative Bio-Techne team members, we would not be developing the tools that academic and biopharma researchers rely on every day to push science forward. Our four key EPIC values (Empowerment, Passion, Innovation, and Collaboration) are the backbone for the way we approach everything related to our people. As a global science organization, we value continuous learning and development opportunities for our employees, as well as a diverse and inclusive work environment that respects employees from all cultures and backgrounds.

Pillar Two

 

Advancing Science Bio-Techne has a 46-year history of developing innovative and cutting-edge tools to advance biopharmaceutical and academic scientific discoveries and technologies to enable and improve disease diagnosis. Our commitment to advancing science goes beyond developing the products the scientific community needs to drive discoveries, and extends to delivering these products with a focus on sustainability, quality, responsible sourcing, and a commitment to continuously improving how we package our products to minimize our environmental footprint.

Pillar Three

 

Governance and Operational Integrity We adhere to many governance best practices, which we believe form an important foundation for actions and decisions of management and the Board in the best interests of all of our stakeholders. We also are committed to ethical and legal conduct and have implemented policies and processes to ensure our partners and suppliers operate with integrity as well.

Pillar Four

 

The Environment We care about minimizing the environmental impacts of our operations, conserving natural resources, and providing effective stewardship of the environment. Our commitment to environmental sustainability is demonstrated through our ISO 14001 certifications at our Minneapolis, Minnesota headquarters and our European headquarters in the UK, as well as our efforts to begin collecting data on Scopes 1 and 2 greenhouse gas emissions and disclosing that data.

 

Information about our sustainability efforts is posted on our website, at https://bio-techne.com/about/corporate-and-social-responsibility, and includes additional detail that is not part of or incorporated by reference into this Proxy Statement.

 

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Executive Compensation

 

Table of Contents  
   
Compensation Discussion and Analysis 30
   
Executive Summary 30
Addressing Shareholder Concerns 33
CEO Transition in 2024 34
Compensation Philosophy and Objectives 35
Our Process for Establishing Executive Compensation 35
Elements of the 2022 Compensation Program 37
Compensation Policies and Practices 42
   
Compensation Committee Report on Executive Compensation 42

 

Proposal 3. Approve, on an Advisory Basis, the Compensation of Our Executive Officers

 

FOR THE ADVISORY PROPOSAL ON EXECUTIVE COMPENSATION.

 

Every year we ask our shareholders to approve, on an advisory basis, the compensation of our executive officers.

 

This is known as “say-on-pay.” Our compensation practices align executive compensation with Bio-Techne’s financial performance, business segment performance, and shareholder return.

 

Compensation Discussion and Analysis

 

In this Compensation Discussion and Analysis (“CD&A”), we provide an overview of our executive compensation philosophy and objectives, as well as a description of the material components of our executive compensation program. Please also review the tables that immediately follow this section, which provide more information, including historical compensation information.

 

As of June 30, 2022, the following officers were our Named Executive Officers (collectively, our “NEOs”):

 

CHARLES KUMMETH   JAMES HIPPEL   WILLIAM GEIST*   KIM KELDERMAN   BRENDA FURLOW   DAVID EANSOR*
President and Chief Executive Officer   Executive Vice President – Finance and Chief Financial Officer   President – Protein Sciences   President – Diagnostics and Genomics   Executive Vice President – General Counsel and Corporate Secretary   Former President – Protein Sciences

 

* Mr. Geist assumed his current role in January 2022, replacing Mr. Eansor, who retired in March 2022.

 

Executive Summary

 

We continued to execute on our long-term growth strategy in fiscal year 2022. During his almost ten-year tenure, our CEO has led a consistent strategy of driving growth through innovation, making organic investment in the core business as well as expanding our portfolio and end markets through acquisitions. This focus on continued execution of our strategy and strong demand for our proteomic, genomic, and diagnostic products resulted in another year of very strong financial performance, despite some continued residual turbulence from the pandemic, supply chain challenges, and inflation challenges.

 

The Company ended the year with:

 

17%
ORGANIC REVENUE
GROWTH
$1.1
BILLION

TOTAL REVENUES

 

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In the last ten years, we have acquired or agreed to acquire 19 companies. We continue to diversify in many adjacent life science areas that we expect will provide accelerated growth and stability for investors, including most notably cell and gene therapy. Our acquisitions are fundamental to our growth plans and, we believe, enable us to meet or exceed our long-term strategic targets.

 

 

At the same time, we continue to focus on investing in the core of our business, as well as maintaining operational productivity, managing costs, and investing prudently. As a result, at the end of fiscal year we achieved the following financial results:

 

 

Incentive Payouts Reflected Outstanding Business Performance

 

Our Compensation Committee aligns pay with performance and strategic initiatives by tying a significant portion of our long- and short-term incentive awards to rigorous revenue- and earnings-based financial goals.

 

Despite unprecedented supply chain and shipping disruptions and the impact of the war in Ukraine—most notably the increase in fuel prices and inflationary business environment—our leadership, and our entire team, had another excellent year.

 

Management and the Compensation Committee expanded the pool of employees who were eligible for bonuses this year. As a result, of those employees who were not commission eligible, almost

 

93%

OF BIO-TECHNE’S U.S. EMPLOYEES, RECEIVED AN ANNUAL BONUS.

 

Similarly, the Compensation Committee confirmed that management was entitled to receive the maximum bonus for corporate-wide performance based on the Company’s

 

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multi-year performance that significantly exceeded the annual operating plan and target metrics. Long-term equity awards granted in 2019 also vested at the maximum of 150% of target.

 

How Our Pay Program Works

 

Our executive compensation program includes several elements that are tailored to reward specific aspects of Company and business-line performance that the Board believes are central to meeting key business objectives and delivering long-term shareholder value. In particular, we strive to align executive compensation with our key strategic objectives: building core products and innovation, geographic expansion, commercial execution, operational excellence, and talent retention and recruitment.

 

Base Salary  
Set to be competitive in the marketplace
 
Adjusted when the Compensation Committee determines an increase is warranted due to a change in responsibilities, demonstrated performance, or relevant market data
Short-Term Incentives  
Earned based on performance against goals for Company-wide (and for some executives, segment) organic revenue and adjusted operating income

Long-Term Incentives

 

 
Incentivize executives to deliver long-term shareholder value
Provide a retention vehicle
Typically in the form of share options and RSUs
 
 

 

Target Pay

 

Our executive compensation packages are heavily weighted to variable, at-risk pay in order to align pay with performance, as shown below. The Compensation Committee does not have any formal policies for allocating total compensation among the various components. Instead, the Compensation Committee uses its judgment, in consultation with its independent compensation consultant, to establish a mix of short-term, and long-term incentive compensation, and cash and equity compensation for each NEO. The balance among the components may change from year to year based on corporate strategy and objectives, among other considerations. For fiscal year 2022, our NEOs had the following target pay mix:

 

 

Best Practices in Compensation Governance

 

Bio-Techne maintains a number of best practices with respect to compensation that we believe encourage actions that are in the long-term interests of our shareholders and the Company.

 

Pay for performance. Approximately 91% of the CEO’s target direct compensation, and 81% of target direct compensation for the other NEOs, was directly or indirectly tied to Company performance.
Emphasize long-term performance. Approximately 77% of our CEO’s target direct compensation (73% for our other NEOs) is equity-based with multi-year vesting.
Sound financial goals. Financial goals for incentive plans are based on targets that are challenging but achievable.
Double-trigger vesting provisions. Equity awards do not automatically vest due to a change in control unless there is also a qualifying termination of employment.

 

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Robust stock ownership requirements. The CEO must own shares valued at 6x his base salary and the other executive officers must hold shares valued at 3x their respective base salaries.
No hedging or pledging. Directors and executive officers may not hedge Company securities and, subject to limited exceptions, may not pledge Company securities as collateral for any loan.
No repricing of stock options or stock appreciation rights. Any re-pricing or exchange would require shareholder approval.
Mitigate undue risk. We annually review all incentive programs for material risk.
Engage independent consultants. The Compensation Committee engages independent compensation and legal consultants.
No golden parachute tax gross-ups. Our agreements with executive officers have never included golden parachute tax gross-ups.

 

Addressing Shareholder Concerns

 

At our 2021 Annual Meeting of Shareholders, approximately 55% of our shareholders supported our “say-on-pay” proposal, while 45% expressed their concerns by voting against our proposal. This was a disappointing decline in approval from the 2019 and 2020 support of over 95%. As described in “Corporate Governance—Shareholder Engagement” above, we conducted an extensive engagement with our shareholders both before and after the meeting specifically to listen to concerns about executive compensation. While many continued to express strong support for management and the Company based on our excellent historical financial performance, some did identify features of the executive compensation program they thought could be modified or implemented differently.

 

Before setting compensation for fiscal year 2023, the Compensation Committee had extensive discussions regarding these shareholder perspectives and made some responsive adjustments to the Company’s compensation programs. The primary concerns and the Company’s responses are summarized below.

 

Concern: CEO Pay is Not Aligned to Performance

 

Response: Since Chuck Kummeth became the CEO in 2013, the Company has grown significantly. While reported CEO pay has increased over the years as Mr. Kummeth’s leadership has been proven, total shareholder return has increased at a far faster pace, reaching an annualized rate of approximately 25% for the past 5 years. Nonetheless, as Mr. Kummeth nears the end of his tenure as CEO and the Compensation Committee and Board work to identify his successor, the Compensation Committee will carefully consider the new CEO’s compensation structure to ensure it reflects shareholder concerns.

 

Concern: Bio-Techne’s Financial Success is Not Shared with the Broader Employee Population

 

Response: Over the past several years, management has recommended and the Compensation Committee has approved awards to a greater percentage of the workforce, including the following:

 

  Extended annual cash bonuses to managers at all levels  
  Extended annual cash bonuses to all non-managerial exempt employees (other than commission-based employees) in the U.S.  
  Added annual retention bonus for non-exempt hourly workers in the U.S.  
  Expanded the eligibility to receive discretionary equity grants to all exempt employees, based on exceptional performance or other factors  
  Issued equity grants to sales team members who met or exceeded their annual sales targets  

 

Concern: The Fiscal Year 2021 Supplemental Time- and Performance-Based Grants Were Inappropriate

 

Response: In June 2020, the Compensation Committee issued supplemental grants related to the Company’s rapid development, marketing, and sale of Covid-19 products in response to the pandemic. As we explained in our 2021 Proxy Statement and during shareholder engagement meetings, these supplemental grants were issued at the height of the pandemic to reflect the extraordinary effort required to initiate development of Covid-19-related products and to ensure that our talented executive team remained in place to steer the Company through an unprecedented business environment. The Compensation Committee has no plans to issue similar grants in the future. Moreover, the performance-based supplemental grants are unlikely to vest, as our Covid-19 products have not sold at the projected levels.

 

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Concern: The Company Uses Similar Measures for Both Long- and Short-Term Incentive Compensation

 

Response: For the past eight years, the Compensation Committee has maintained a consistent executive compensation structure that includes an annual cash bonus based on one-year organic revenue and adjusted operating income targets and a performance equity grant based on three-year achievement of the same types of measures. Some shareholders expressed concern that the targets are similar, and others suggested we adopt a relative performance measure. These concerns and suggestions are not new; the Compensation Committee has revisited this issue frequently, including recently in response to the say-on-pay vote. With each review, the Compensation Committee remains confident that revenue growth and profitability are the best measures of business success and shareholder value creation.

 

  First, the Compensation Committee believes that a company’s financial performance (both currently and consistently over the long term) is what drives shareholder value creation. For this reason, management has reviewed these financial metrics in nearly every investor presentation for the nine years that Mr. Kummeth has been CEO. Moreover, for Bio-Techne, long-term organic revenue growth and operational profitability are the two financial metrics over which management has the most control.  
  Second, for a company like Bio-Techne that has an active M&A strategy, the Compensation Committee believes typical return measures such as ROIC tend to fluctuate significantly as acquisitions close or are integrated, making it a difficult measure to determine in the years immediately following an acquisition.  
  Third, the Compensation Committee determined that typical relative measures such as relative TSR are difficult given the lack of true peers.  

 

Taking these factors into consideration, the Compensation Committee has determined that continuing to use a compensation structure that incentivizes executives to achieve both short- and long-term organic revenue and adjusted operating income goals remains the best way to maintain and increase shareholder value. However, as described below in the section titled “CEO Transition in 2024,” the Compensation Committee implemented an alternative compensation structure for Mr. Kummeth for the next two years.

 

Concern: The Company Doesn’t Have a Written Compensation Recoupment (“Clawback”) Policy

 

Response: The Compensation Committee has long intended to adopt a clawback policy that will comply with regulations the SEC expects to adopt. However, because the timing of those regulations remains uncertain, the Compensation Committee decided to move forward and finalize a policy despite the absence of regulatory guidance. Bio-Techne adopted a clawback policy in July 2022 that covers all executive officers and gives the Company discretion to seek recoupment of incentive payments within twelve months of a material restatement if the compensation calculated on the restated financial results would have been materially lower.

 

CEO Transition in 2024

 

As previously disclosed, our CEO, Mr. Kummeth, has announced his intention to retire on June 30, 2024. As part of the retirement planning and succession discussions, the Board and the Compensation Committee discussed compensation structures that would encourage Mr. Kummeth to remain—and remain motivated—through the next two fiscal years and appropriately compensate him during that time. The Compensation Committee, in consultation with the full Board, concluded it is in the best interests of the Company and our shareholders to retain Mr. Kummeth in his current role as CEO to the end of fiscal year 2024 to help ensure the development and implementation of an effective succession plan, particularly given his long-term leadership and the Company’s performance during his tenure.

 

The Compensation Committee entered into CEO Compensation discussions with Aon Human Capital Solutions Practice (“Aon”), the Compensation Committee’s independent consultant, the Board, and Mr. Kummeth. Following these discussions, the Compensation Committee set compensation for Mr. Kummeth for fiscal years 2023 and 2024 as follows:

 

Base salary will remain the same as in fiscal year 2022 for his remaining tenure as CEO;
Bonus percentage will remain the same as in fiscal year 2022 for his remaining tenure as CEO; and
Annual time-based equity grants in each year will consist of restricted stock units having an aggregate value of $5,000,000 on the grant date.
   
In addition, the Compensation Committee awarded Mr. Kummeth a performance-based option grant with the following terms:
   
200,000 options at target
half vest after fiscal year 2023 based upon achievement of year-over-year organic revenue growth percentage
half vest after fiscal year 2024 based upon achievement of year-over-year organic revenue growth percentage

 

This performance-based stock option grant represents two years’ worth of stock option grants. No additional stock option grants (time-based and/or performance-based) will be granted to Mr. Kummeth in fiscal year 2023 or fiscal year 2024.

 

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Compensation Philosophy and Objectives

 

The Compensation Committee reviews and approves each executive’s compensation annually and is responsible for ensuring that compensation for the executive officers is consistent with our objectives: attracting and retaining highly qualified executives, tying pay to performance and Company strategy, aligning executives’ incentives with long-term shareholder interests, and encouraging internal pay equity. These compensation objectives inform the Compensation Committee’s decisions about the appropriate level for each compensation component for each NEO. The Committee’s philosophy is that executive compensation should be market-competitive and should emphasize at-risk cash bonus opportunities and equity compensation that reflect the Company’s performance goals and are commensurate with each executive’s scope of responsibility.

 

The target-setting process for our incentive plans is intended to align pay with performance and long-term shareholder interests. The Company’s business planning process and strategic direction are foundational to this effort. Bio-Techne’s business planning process, which is determined by the overall business environment, industry and competitive factors, and our goals and strategies, drives our annual operating plan and establishes our long-term financial, operational, and strategic objectives.

 

Key Considerations in Development of Annual and Long-Term Goals

 

Business Environment Competitive Factors Company-Specific Factors
Market outlook Industry trends Historical trends
International trends Competitive landscape Historical performance
Analyst expectations Market growth Strategic initiatives
Tax policy     Capital deployment opportunities
        Recent capital deployment decisions

 

Our Process for Establishing Executive Compensation

 

Responsibility of the Compensation Committee

 

The Compensation Committee is responsible for establishing compensation programs for the Company’s CEO and other NEOs and administers the Company’s equity-based and performance-based compensation plans. Accordingly, the Compensation Committee is responsible for reviewing cash and equity incentives payable to executives and has the authority to grant restricted shares of Bio-Techne common stock and options to purchase Bio-Techne common stock to all participants under the Company’s equity award plans and to determine all terms and conditions of such awards.

 

Role of the Chief Executive Officer in Compensation Decisions

 

The Compensation Committee annually assesses the base compensation and the potential variable compensation that the NEOs will be eligible to earn if they achieve the Company’s financial targets. As part of this assessment, the CEO makes recommendations regarding the base compensation and target incentive amounts for the executive officers that report to him. Such recommendations take into account internal pay equity, position within an internal compensation range, changes in responsibilities, compensation levels for similar positions in our industry and geographic location, and other factors the CEO considers important in establishing competitive compensation for the other executives. Among these other factors is a philosophy that there should be a reasonable relationship between executive salaries and the average employee or mid-level manager salaries within an organization; that executive bonuses should be based on performance; and that long-term incentives should primarily be equity-based arrangements that are tied to long-term improvements in financial results and other factors that lead to appreciation in the Company’s share price.

 

The Compensation Committee discusses the CEO’s recommendations and may accept or adjust them based on its own assessment of Company strategic goals, executive responsibilities, and internal pay equity, and its independent review of local comparative data for all industries. The executives are not present during the Compensation Committee’s final discussion and determination of the type and amount of compensation to be paid.

 

Role of Consultant

 

The Compensation Committee has retained Aon as its independent outside compensation consultant since 2013 because the Committee believes that working with an independent compensation consultant furthers the objectives of the Company’s compensation program. In this capacity for fiscal year 2022, Aon provided the Compensation Committee with a peer group analysis and helped the Committee structure the compensation program for the CEO and other executive officers. Aon did not provide any other services to the Company during fiscal year 2022.

 

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The Compensation Committee annually evaluates Aon’s independence and performance under the applicable Nasdaq listing standards, and has sole authority to retain or replace its independent compensation consultants. In fiscal year 2022, the Compensation Committee determined that Aon continued to be independent under applicable Nasdaq listing standards.

 

Use of a Peer Group

 

The Compensation Committee refers to a comparative group of life sciences companies when evaluating executive compensation. It is not possible to compile a peer group of companies that directly compete with the Company, as competitors tend to be significantly larger or much smaller and with a narrower product portfolio. However, the companies identified for inclusion in the comparative group operate in the same general industry, and the Compensation Committee believes such companies compete for a similar pool of executive talent.

 

Furthermore, the peer companies are similar to the Company with regard to market capitalization and one or more of the following measures: operating income, revenue, and total shareholder return. While shareholders and advisory groups sometimes rely solely on industry classification and revenue to assess whether a peer group is appropriate, the Compensation Committee believes that using operating income, market capitalization, and total shareholder return are also beneficial because these metrics directly relate to the creation of shareholder value and provide a better measure of the Company’s place in the market than revenue alone. This is especially true because Bio-Techne is a high-growth company. Anticipating continued strong growth, the Compensation Committee strives to attract and retain executives who are able to not only manage the Company as it exists today, but also as it continues to grow organically and through acquisitions in the future. For that reason, the Compensation Committee has determined that market capitalization is the primary metric for identifying industry peers, but operating income, revenue, and total shareholder return are used as supplemental metrics.

 

Our compensation peer group serves as one data point when executive pay packages are set. Although useful as a reference, the Compensation Committee does not target any percentile within this peer group as a specific objective. Instead, compensation decisions are based on the full consideration of many factors, including individual and Company performance, market data, internal equity, experience, strategic needs, and responsibilities.

 

In advance of setting fiscal year 2022 compensation opportunities for the NEOs, the Compensation Committee, with the assistance of Aon, reviewed the peer group to ensure the constituents remained reasonable for pay and performance comparisons. Based on the review, the Compensation Committee made small modifications to the peer group. NuVasive, Inc. was removed due to both small size and poor performance relative to peers. Conversely, Avantor and Natera were added because they both fit within the industry, their market capitalization and revenues were somewhat close, and they are both high-growth and high-performing companies, similar to Bio-Techne.

 

For compensation decisions for fiscal year 2022, our peer group consisted of the following companies:

•  ABIOMED, Inc.

•  Align Technology, Inc.

•  Alkermes plc

•  Avantor, Inc.

•  Bio-Rad Laboratories, Inc.

•  EXACT Sciences Corporation

•  Globus Medical, Inc.

•  Haemonetics Corporation

•  IDEXX Laboratories

•  Integra LifeSciences Holdings Corp

•  Insulet Corporation

•  Masimo Corporation

•  Natera, Inc.

•  PerkinElmer, Inc.

•  QIAGEN N.V

•  Repligen Corporation

•  Seagen, Inc.

Peer Group Measures
(at the time median was confirmed)

•  Market capitalization

•  Peer Median: $14.41 billion

•  Bio-Techne’s Position: 59th percentile

•  Revenues

•  Peer Median: $1.1 billion (trailing four quarters)

•  Bio-Techne’s Position: 19th percentile

•  Operating Income

•  Peer Median: $231 million (trailing four quarters)

•  Bio-Techne’s Position: 42nd percentile

•  Annualized 3-Year TSR

•  Peer Median: 29.3%

•  Bio-Techne’s Position: 87th percentile

 

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Elements of the 2022 Compensation Program

 

The Company’s executive compensation program consists of base salaries, annual cash performance bonuses, long-term equity awards, and various benefits, including a Profit Sharing and Savings Plan in which all qualified Company employees participate. The table below shows the link between each element and our goal of creating shareholder value.

 

Pay Element   Alignment with Shareholder Value Creation
Base Salary   Attracts and retains high-performing executives by providing market-competitive fixed pay
Annual Cash Incentive   Drives Company-wide and segment performance
    Focuses efforts on growing revenue and earnings and achieving strategic business goals
Long-Term Equity Awards   Encourages executives to be, and to think like, shareholders
    Motivates executives to deliver sustained long-term growth to the business and to the Company’s share price
    Retains high-performing executives by providing a meaningful incentive to stay with the Company
Other Compensation and Benefits   Attracts and retains high-performing executives by offering competitive benefits

 

Base Salary

 

Base salary—the only fixed component of our executive officers’ direct compensation—provides competitive pay to attract and retain our talented executives. Annual salary decisions for each NEO are made after considering competitive data, the skills and experience the NEO brings to the Company, the length of time the NEO has been with the Company, and the performance contributions the NEO makes. Base salaries were adjusted in fiscal year 2022 primarily to reflect the executives’ outstanding performance and the resulting growth in the Company’s revenues, market capitalization, and shareholder return.

 

Our NEOs received the following base salaries for fiscal year 2022:

 

Named Executive Officer  2021
($)
   2022
($)
   % Change 
Charles Kummeth  $1,116,000   $1,183,000    6.0%
James Hippel   600,500    636,600    6.0%
William Geist*   N/A    500,000    N/A 
Kim Kelderman   530,000    561,800    6.0%
Brenda Furlow   503,500    533,700    6.0%
David Eansor*   585,120    620,200    6.0%

 

* Salaries for both Mr. Eansor and Mr. Geist were pro-rated to reflect a partial year of employment.

 

Annual Cash Incentives

 

Executives are eligible to receive cash performance bonuses under the Company’s Short-Term Incentive Plan based on the Company’s achievement of predetermined, objective performance targets. These challenging targets are set each year to incentivize the executives to focus attention on strategically important goals.

 

Unless the Compensation Committee decides otherwise, participants must be employed on the last day of the fiscal year to receive any portion of their annual cash incentive payment.

 

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Fiscal Year 2022 Target Bonus Amounts

 

The Compensation Committee assigned a target bonus opportunity for each NEO, expressed as a percentage of base salary, as shown below.

 

Executive  2022 Base
Salary
($)
   Target Annual
Incentives
(as % of base salary)
   Target Annual
Incentives
($)
 
Charles Kummeth  $1,183,000    160%  $1,892,800 
James Hippel   636,600    100%   636,600 
William Geist   500,000    85%   425,000 
Kim Kelderman   561,800    90%   505,620 
Brenda Furlow   533,700    85%   453,645 
David Eansor   620,200    90%   558,180 

 

As shown in the next section, executives may earn between zero and 200% of their target bonus opportunities based on achievement against the applicable performance goals.

 

Fiscal Year 2022 Performance Metrics

 

For fiscal year 2022, the annual bonus plan was again based upon consolidated adjusted operating income results and consolidated organic revenue results for the Company, and, for NEOs who lead our reporting segments, adjusted operating income and organic revenue results for their respective segments. The Compensation Committee used this approach to align pay with performance over which each executive has significant influence. However, at least one-half of each NEO’s annual bonus plan payout is based on corporate performance to drive enterprise-wide behaviors.

 

Our NEOs had the following weightings for their respective annual incentive opportunities:

 

   Company-Wide Goals   Segment Goals
Executive  Organic
Revenue*
   Adjusted
Operating
Income**
   Adjusted
Operating
Income
   Organic
Revenue
 
Charles Kummeth   50%   50%   0%   0%
James Hippel   50%   50%   0%   0%
William Geist (Protein Sciences segment)   25%   25%   25%   25%
Kim Kelderman (Diagnostics and Genomics segment)   25%   25%   25%   25%
Brenda Furlow   50%   50%   0%   0%
David Eansor (Protein Sciences segment)   25%   25%   25%   25%
* Targets for the Company’s organic revenue for management’s incentive plan exclude foreign currency impacts and acquisition-related revenues. Our externally reported organic revenue excludes all revenue prior to 12 months from the acquisition date.
** The Company’s adjusted operating income target for management’s incentive plan excludes the impact of foreign currency translation; certain acquisitions and acquisition-related amortization, costs, and expenses; share-based compensation expense; non-recurring litigation expenses; and other unusual items in the discretion of the Compensation Committee. While these adjustments are closely aligned to our external operating results, there are some minor differences in our reported adjusted operating income and the adjusted operating income used for management’s incentive plan.

 

The range of possible payouts for the Company and segment performance metrics for fiscal year 2022 are shown below.

 

   Company Revenue Goals   Company Operating Income Goals
Performance Level  Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
   Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
 
Threshold  $1,035.3M    50%  $379.2M    50%
Target   1,067.3M    100%   399.2M    100%
Maximum   1,099.4M    200%   419.1M    200%

 

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   Protein Sciences Revenue Goals   Protein Sciences Operating Income Goals
Performance Level  Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
   Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
 
Threshold  $761.8M    50%  $338.6M    50%
Target   785.3M    100%   356.5M    100%
Maximum   808.9M    200%   374.3M    200%
        
   Diagnostics & Genomics
Revenue Goals
   Diagnostics & Genomics Operating
Income Goals
Performance Level  Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
   Performance
Achievement
($)
   Payout Range
(% of target award
opportunity)
 
Threshold  $274.6M    50%  $46.5M    50%
Target   283.1M    100%   48.9M    100%
Maximum   291.6M    200%   51.3M    200%

 

The payout percentage for each executive is the sum of the weighted payouts for each applicable metric.

 

The Compensation Committee retains the discretion to determine the bonus amounts and criteria for any new participants and to adjust them from time to time, including adjusting bonus payouts to reflect unexpected circumstances that were not taken into account when bonus targets were set.

 

Fiscal Year 2022 Earned Incentives

 

As described above, despite the disruptions and challenges caused by the pandemic, the Company had excellent financial results that in most cases substantially exceeded target for those being paid.

 

 

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Payouts under the Short-Term Incentive Plan for fiscal year 2022 for our NEOs were as follows:

 

   FY 2022 Opportunity   Actual
Executive    Target Annual
Incentives
($)
   2022 Earned
Award
($)
   As a %
of Target
 
Charles Kummeth    $1,892,800   $3,785,600    200%
James Hippel     636,600    1,273,200    200%
William Geist*     425,000    425,000    200%
Kim Kelderman     505,620    766,520    151.6%
Brenda Furlow     453,645    907,290    200%
David Eansor*     558,180    745,729    200%
* Mr. Eansor’s and Mr. Geist’s bonuses were based on pro-rated base salaries to reflect their partial year of employment.

 

Cash bonus performance payments for the NEOs are reflected in the 2022 Summary Compensation Table. For a comprehensive discussion of our financial results, please refer to our Annual Report on Form 10-K for fiscal year 2022.

 

Long-Term Incentive Compensation Awarded in Fiscal Year 2022

 

Long-term incentive compensation is a critical component of our executive compensation program. This element of compensation serves to align our executives’ financial interests with sustained shareholder value creation and long-term Company financial results. It also functions as an important retention tool and helps us position our NEOs’ total pay within range of the competitive median of our compensation peer group.

 

Fiscal Year 2022 Long-Term Incentive Grants

 

For the past eight years, Bio-Techne NEOs have received a mix of time-based and performance-based equity awards. The target value of the performance-based equity awards generally is divided equally between restricted stock units and stock options. In the first quarter of fiscal year 2022, all of the NEOs received grants of long-term incentive awards in the forms and with the target amounts shown below.

 

   Stock Options*   Restricted Stock or
Restricted Stock Units
       Performance-       Performance- 
   Time-based   vesting   Time-based   vesting** 
Executive  ($)   ($)   ($)   ($) 
Charles Kummeth  $2,574,794   $2,574,876   $2,574,846   $2,574,846 
James Hippel   1,249,902    624,910        624,760 
William Geist***   656,366    224,991    666,606    224,879 
Kim Kelderman   799,967    399,942        399,911 
Brenda Furlow   749,892    374,946        374,856 
David Eansor ****   999,897    499,928         499,808 
* Amounts shown represent the total grant date fair value, and for the performance-based grants, assume target. The fair value of equity awards is determined pursuant to the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 718. Assumptions used in the calculation of the fair value are described in Note 10 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.
** Cash performance units were also granted solely to compensate executives for dividends that may be granted to shareholders but that are not paid for unvested restricted share units during the three-year performance period. Cash performance awards vest at the same rate as the associated performance-based equity awards.
*** Mr. Geist’s grants were issued February 1, 2022, and were pro-rated to reflect his partial year of employment. If Mr. Geist had been employed for the full year, the value of his performance awards would have been double.
**** Since Mr. Eansor qualified as a retiree under the Bio-Techne 2020 Equity Incentive Plan, his time-based stock options continue to vest. His performance-vesting stock options and restricted stock units were prorated to reflect his partial year of employment. The fair value of the equity awards assuming target are now $111,086 for the stock options and $110,819 for the restricted stock units.

 

Time-Based Stock Options

 

The Company’s time-vesting stock option grants generally vest 25% on each of the first four anniversaries of the grant date and have a seven-year term. The Compensation Committee determines the appropriate stock option award values by considering how the value of equity awards will impact each NEO’s total direct compensation, as well as the balance between annual and long-term compensation, fixed and at-risk compensation, the Company’s strategic and operational objectives, the responsibilities and performance of the NEOs, internal equity, the grants made by companies in our compensation peer group and other

 

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factors the Committee deems relevant. Stock options have value only if the market price of the Company’s stock appreciates between the grant date and the vesting date.

 

Performance-Vesting Stock Options and RSUs

 

These grants will vest, or not, based on Bio-Techne’s performance against the consolidated adjusted operating income and consolidated organic revenue goals for fiscal year 2025. For competitive reasons, these performance goals are not disclosed in advance. The Compensation Committee selected these metrics because continued revenue growth is the best long-term driver of consistent cash generation and operating income is an important driver of share price valuation and shareholder expectations. Together, these targets promote long-term achievement of the Company’s strategic objectives.

 

The following table sets forth the threshold, target, and maximum potential amounts that will vest for our NEOs at the end of fiscal year 2025 under the performance-vested equity awarded for fiscal year 2022.

 

   Stock Options  Restricted Stock Units(3)
Executive  Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
($)
  Target
($)
  Maximum
($)
Charles Kummeth  1,287,438  2,574,876  3,862,314  1,287,423  2,574,846  3,862,269
James Hippel  312,455  624,910  937,365  312,380  624,760  937,140
William Geist(1)  112,495  224,991  337,486  112,440  224,879  337,319
Kim Kelderman  199,971  399,942  599,914  199,955  399,911  599,866
Brenda Furlow  187,473  374,946  562,419  187,428  374,856  562,284
David Eansor(2)  249,964  499,928  749,892  249,904  499,808  749,712
(1) Represents performance-based awards granted on February 1, 2022, upon the start of Mr. Geist’s employment with the Company. These amounts were prorated for his time of employment during the year. If Mr. Geist had been employed the full year, each of the values denoted above would be doubled.
(2) Represents performance-based awards granted on August 6, 2021. Due to Mr. Eansor’s retirement, these amounts have been prorated for his time of employment during the fiscal year. The maximum, target, and threshold values for his performance-based stock options are now $166,629, $111,086, and $55,543, respectively. The maximum, target, and threshold value for his performance-based restricted stock units are now $166,228, $110,819, and $55,409, respectively.
(3) Executives also received cash performance unit grants to compensate for dividends that may be paid to shareholders during the three-year vesting period, in the following amounts at threshold, target and maximum, respectively: Kummeth — $11,222, $22,445, and $33,667; Hippel — $2,723, $5,446, and $8,169; Geist — $1,176, $2,352, and $3,528; Kelderman — $1,743, $3,486, and $5,229; Furlow — $1,634, $3,267, and $4,901; and Eansor — $2,178, $4,357, and $6,535. Given Mr. Eansor’s retirement, his cash performance unit grants have been prorated and are now $1,452, $973, and $487. Mr. Geist’s award was also prorated for his time of service during the year. If Mr. Geist had been employed for the full year, each of his cash performance unit grants would have been double.

 

Restricted Stock and Restricted Stock Unit Grants

 

The time-vested restricted stock awards for the CEO will vest one-third each year over a three-year period. The time-vested restricted stock unit award for Mr. Geist was a one-time new hire grant that vests one-third each year over a three-year period.

 

Long-Term Incentive Compensation That Vested in Fiscal Year 2022

 

The long-term performance equity awards granted in fiscal year 2020 vested in August 2022 based on the following performance goals set at the time of grant for fiscal year 2022. Based on an assessment of the Company’s performance relative to these goals, the Compensation Committee determined that the Company substantially exceeded the maximums for both Revenue and Operating Income, resulting in a maximum vesting of 150% of target.

 

* These amounts exclude the impact of actual foreign currency translation compared to our plan; certain acquisitions and acquisition-related amortization, costs, and expenses; non-recurring litigation expenses; share-based compensation expense; and other unusual items. For a comprehensive discussion of our financial results, please refer to our Annual Report on Form 10-K for the fiscal year that ended June 30, 2022.

 

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Compensation Policies and Practices

 

Clawback Provisions

 

Our employment agreements with our NEOs provide that we may recoup incentive compensation they receive to the extent required by any law, government regulation, share exchange listing requirement, or Company policy promulgated under such standards. The Compensation Committee recently adopted a policy that covers all executive officers and allows the Company the discretion to seek recoupment of incentive payments within twelve months of a material restatement where the compensation would have been materially lower if the payments had been calculated on restated financial results.

 

Executive Stock Ownership Guidelines

 

Our Board recently increased the stock ownership guidelines applicable to all NEOs. The guidelines are expressed as a multiple of base salary, as follows:

 

Named Executive Officer Applicable Multiple
President and CEO 6x base salary
Other executive officers 3x base salary

 

Stock that counts towards the guidelines includes an NEO’s directly owned or beneficially owned stock plus the value of restricted stock or restricted stock units that are issued and outstanding, whether or not vested. NEOs must meet the guideline within five years of becoming an NEO, and must remain in compliance at all times thereafter. All of the NEOs except Mr. Geist, who was recently hired, currently meet the guidelines.

 

Succession Planning

 

The Compensation Committee maintains a succession plan for the Company’s executive officers that is reviewed by the full Board of Directors on a periodic basis. As part of its role in succession planning, the Board periodically reviews with the CEO the performance of the CEO’s direct reports, as well as succession plans for each role. The Board also receives formal reports from such individuals and has the opportunity to interact with them in social settings.

 

As previously disclosed, Mr. Kummeth intends to retire as CEO at the end of fiscal year 2024. The Board has already engaged in discussions concerning a transition in the CEO role, but with this almost two-year notice, the Board will be able to conduct a thorough evaluation of potential candidates to ensure a smooth transition for Mr. Kummeth’s eventual successor.

 

Accounting and Tax Treatment

 

The Company accounts for equity-based compensation paid to employees under FASB ASC Topic 718, which requires us to estimate and record an expense over the service period of an option award. Thus, we may record an expense in one year for awards granted in earlier years. Accounting rules also require cash compensation to be recorded as an expense at the time the obligation is incurred.

 

While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Committee retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible for tax purposes.

 

In addition to considering the tax consequences, the Compensation Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards.

 

Compensation Committee Report on Executive Compensation

 

The Compensation Committee of the Board of Directors is responsible for reviewing and approving total compensation programs and levels for the Company’s executive officers, including the NEOs. The Committee’s responsibilities are specified in the Compensation Committee Charter.

 

The Compensation Committee reviewed the Compensation Discussion and Analysis above with management. Based on that review, the Committee approved the inclusion of the Compensation Discussion and Analysis in the Company’s Proxy Statement for the 2022 Annual Shareholder Meeting.

 

Randolph C. Steer (Chair)
Joseph Keegan
Rupert Vessey

 

Members of the Compensation Committee

 

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Additional Compensation Disclosures

 

2022 Summary Compensation Table

 

The NEOs received compensation for the fiscal years ended June 30, 2022, 2021, and 2020 as set forth in the chart below.

 

Name and
Principal Position
  Fiscal
Year
   Salary(1)
($)
   Bonus
($)
   Stock
Awards(2)
($)
   Option
Awards(2)
($)
   Non-Equity
Incentive Plan
Compensation(3)
($)
   All Other
Compensation
($)
   Total
($)
 
Charles R. Kummeth
President and CEO
   2022   $1,183,000        $5,149,692(4)   $5,149,669(5)   $3,856,735(6)   $31,452(7)   $15,370,549 
    2021    1,116,000         4,599,864(4)    6,599,940(5)    3,537,214     36,879     15,889,896 
   2020    1,053,000         4,310,652(4)    4,310,748(5)    1,767,957     41,425     11,483,782 
James Hippel
Executive Vice President and CFO
   2022    636,600         624,760(8)    1,874,812(9)    1,289,740(10)    10,117(11)    4,436,029 
   2021    600,500         574,849(8)    2,724,928(9)    1,095,156     9,445     5,004,878 
   2020    566,000         502,389(8)    1,502,483(9)    576,716     9,470     3,157,058 
William Geist
President, Protein Sciences
   2022    239,600(23)        1,224,789(24)    674,897(25)    425,000(26)         2,564,286 
   2021                                 
   2020                                 
Kim Kelderman
President, Diagnostics and Genomics
   2022    561,800         399,911(17)    1,199,909(18)    776,445(19)    9,302(16)    2,947,367 
   2021    530,000         359,839(17)    2,079,987(18)    908,102     8,389     3,886,317 
   2020    500,000         301,459(17)    901,452(18)    464,000     8,400     2,175,311 
Brenda Furlow
Executive Vice President and General Counsel
   2022    533,700         374,856(20)    1,124,838(21)    915,560(22)    9,272(16)    2,958,226 
   2021    503,500         299,836(20)    2,899,923(21)    761,021     8,396     4,472,676 
   2020    475,000         251,195(20)    751,223(21)    337,841     8,400     1,823,659 
David Eansor
Former President, Protein Sciences
   2022    448,141(12)        499,808(13)    1,499,825(14)    757,492(15)    4,140(16)    3,209,406 
   2021    585,000         459,844(13)    4,379,953(14)    1,005,360     8,372     6,438,528 
   2020    552,000         401,988(13)    1,201,974(14)    521,387     8,400     2,685,749 
(1) Includes amounts deferred under the Company’s Profit Sharing and Savings Plan, a qualified deferred compensation plan under Section 401(10) of the Internal Revenue Code.
(2) Amounts shown represent the total grant date fair value of equity-based compensation based on the estimated probable outcome of the performance-based objectives applicable to such awards on the grant date and excluding the effect of estimated forfeitures. The fair value of equity awards is determined pursuant to the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 718. Assumptions used in the calculation of the fair value are described in Note 10 to the Company’s audited financial statements for fiscal year 2022 included in the Company’s Annual Report on Form 10-K.
(3) Represents cash bonuses earned under the Company’s incentive plans in effect for the applicable year, which are determined and paid in the subsequent fiscal year. Also includes cash performance unit payments vested for the applicable year based on actual performance achieved under the respective year’s performance-based award.
(4) For 2022, represents 5,344 shares of time-vested restricted stock granted on August 6, 2021, plus performance-based restricted stock units also granted on August 6, 2021. The value of the fiscal year 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $3,862,269. For fiscal year 2021, represents 8,586 shares of time-vested restricted stock granted on August 5, 2020, plus performance-based restricted stock units also granted on August 5, 2020. The value of the fiscal year 2021 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $3,449,898. For fiscal year 2020, represents 11,291 shares of time-vested restricted stock granted on August 7, 2019, plus performance-based restricted stock units also granted on August 7, 2019. The value of the fiscal year 2020 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $3,224,974.
(5) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on August 6, 2021. The time-vested option grant was to purchase 20,876 shares of Bio-Techne common stock. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $3,862,314. For 2021, includes two time-vested options and two performance-vested options, all of which were granted on August 5, 2020. One of the time-vested option grants is the annual long-term incentive grant to purchase 38,295 shares, and the other is a supplemental grant to purchase 16,650 shares, each vesting one-third per year over three years. The first of the two performance-vested options is the annual long-term incentive grant, the value of which at the grant date assuming the highest level of performance conditions will be achieved is $3,449,949. The second performance-vested option grant, assuming targeted revenue from COVID-19 products will be achieved, is $999,994. As of the date of this proxy statement, the likelihood the target will be achieved is remote. For 2020, includes a time-vested option to purchase 57,150 shares of Bio-Techne common stock issued on August 7, 2019, plus a performance-vested option also granted on August 7, 2019. The value of the 2020 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $3,224,999.
(6) Includes a cash bonus of $3,785,600 earned under the Company’s short-term incentive plan in effect for the applicable year, and a cash performance unit payment of $71,135 vested based on actual performance achieved under the 2020 performance-based award.
(7) Includes $9,000 for 401k match, $3,467 for a supplemental life and disability insurance policy ($2,007 to cover the cost of the premium and $1,461 as a tax reimbursement related to payment for the premium), and $18,985 in dividends paid on unvested restricted stock, which amount was not factored into the grant date fair value of such awards.

 

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(8) For 2022, represents shares of performance-based restricted stock units granted on August 6, 2021. The value of the 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $937,140. For 2021, represents shares of performance-based restricted stock units also granted on August 5, 2020. The value of the 2021 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $862,274. For 2020, represents shares of performance-based restricted stock units also granted on August 7, 2019. The value of the 2020 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $749,835.
(9) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on August 6, 2021. The time-vested option grant was to purchase 10,134 shares of Bio-Techne common stock. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $937,365. For 2021, includes two time-vested options and two performance-vested options, all of which were granted on August 5, 2020. For the time-vested option grants, one is the annual long-term incentive grant to purchase 19,147 shares, and the other is a supplemental grant to purchase 8,325 shares, each vesting one-third per year over three years. The first of the two performance-vested options is the annual long-term incentive grant, the value of which at the grant date assuming the highest level of performance conditions will be achieved is $862,457. The second performance-vested option grant, assuming targeted revenue from COVID-19 products will be achieved, is $499,997. As of the date of this proxy statement, the likelihood the target will be achieved is remote. For 2020, includes a time-vested option to purchase 26,581 shares of Bio-Techne common stock issued on August 7, 2019, plus a performance-vested option also granted on August 7, 2019. The value of the 2020 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $749,998.
(10) Includes a cash bonus of $1,273,200 earned under the Company’s short-term incentive plan in effect for the applicable year, and a cash performance unit payment of $16,540 vested based on actual performance achieved under the 2020 performance-based award.
(11) Includes $9,375 for 401k match and $742 for a supplemental life and disability insurance policy ($725 to cover the cost of the premium and $17 as a tax reimbursement related to payment for the premium).
(12) For 2022, represents base salary prorated for actual employment from the start of the year through Mr. Eansor’s retirement date. The annualized amount for 2022 is $620,200.
(13) For 2022, represents shares of performance-based restricted stock units granted on August 6, 2021. The value of the 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $749,712. Due to retirement, the value of the actual performance-based award to be paid out is $110,819 assuming target performance is achieved. The actual value of the performance-based award assuming the highest level of performance conditions will be achieved is $166,228. For 2021, represents shares of performance-based restricted stock units granted on August 5, 2020. The value of the 2021 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $689,765. Due to retirement, the value of the actual performance-based award to be paid out is $383,054 assuming the highest level of performance conditions will be achieved. For 2020, represents shares of performance-based restricted stock units granted on August 7, 2019. The value of the 2020 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $599,982. Due to retirement, the value of the actual performance-based award to be paid out is $533,148 assuming the highest level of performance conditions will be achieved.
(14) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on August 6, 2021. The time-vested option grant was to purchase 8,107 shares of Bio-Techne common stock. As Mr. Eansor was of retirement age at the time of his retirement, he remains eligible for the amount of time-vested options granted and has 7 years to exercise. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $749,892. This performance-based award was prorated at the time of retirement and is valued at $111,086. Assuming the highest level of performance conditions will be achieved, the performance-based award is valued at $166,629. For 2021, includes two time-vested options and two performance-vested options, all of which were granted on August 5, 2020. For the time-vested option grants, one is the annual long-term incentive grant to purchase 15,318 shares, and the other is a supplemental grant to purchase 24,975 shares, each vesting one-third per year over three years. As Mr. Eansor was of retirement age at the time of his retirement, he remains eligible for the amount of time-vested options granted and has 7 years to exercise. The first of the two performance-vested options is the annual long-term incentive grant, the value of which at the grant date assuming the highest level of performance conditions will be achieved is $689,966. This performance-based award was prorated at the time of retirement and is valued at $383,301, assuming the highest level of performance conditions will be achieved. The second performance-vested option grant, assuming targeted revenue from COVID-19 products will be achieved, is $1,499,991. As of the date of this proxy statement, the likelihood the target will be achieved is remote. For 2020, includes a time-vested option to purchase 21,265 shares of Bio-Techne common stock issued on August 7, 2019, plus a performance-vested option also granted on August 7, 2019. As Mr. Eansor was of retirement age on the date of his retirement, he remains eligible for the amount of time-vested options granted and has 7 years to exercise. The value of the 2020 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $599,968. This performance-based award was prorated at the time of retirement and is valued at $533,305, assuming the highest level of performance conditions will be achieved.
(15) Includes a prorated cash bonus of $745,729 earned under the Company’s short-term incentive plan in effect for the applicable year. If Mr. Eansor was employed during the full year, the cash bonus payout would have been $1,116,360. Also includes a cash performance unit payment of $11,764 vested based on actual performance achieved under the 2020 performance-based award. The annualized amount of the cash performance unit payment for employment during the full year is $13,234.
(16) Represents a 401k match.
(17) For 2022, represents shares of performance-based restricted stock units granted on August 6, 2021. The value of the 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $599,866. For 2021, represents shares of performance-based restricted stock units granted on August 5, 2020. The value of the 2021 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $539,758. For 2020, represents shares of performance-based restricted stock units granted on August 7, 2019. The value of the 2020 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $449,939.
(18) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on August 6, 2021. The time-vested option grant was to purchase 6,486 shares of Bio-Techne common stock. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $599,914. For 2021, includes two time-vested options and two performance-vested options, all of which were granted on August 5, 2020. For the time-vested option grants, one is the annual long-term incentive grant to purchase 11,988 shares, and the other is a supplemental grant to purchase 8,325 shares, each vesting one-third per year over three years. The first of the two performance-vested options is the annual long-term incentive grant, the value of which at the grant date assuming the highest level of performance conditions will be achieved is $539,997. The second performance-vested option grant, assuming targeted revenue from COVID-19 products will be achieved is $499,997. As of the date of this proxy statement, the likelihood the target will be achieved is remote. For 2020, includes a time-vested option to purchase 15,948 shares of Bio-Techne common stock issued on August 7, 2019, plus a performance-vested option also granted on August 7, 2019. The value of the 2020 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $499,976.
(19) Includes a cash bonus of $766,520 earned under the Company’s short-term incentive plan in effect for the applicable year, and a cash performance unit payment of $9,925 vested based on actual performance achieved under the 2020 performance-based award.
(20) For 2022, represents shares of performance-based restricted stock units granted on August 6, 2021. The value of the 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $562,284. For 2021, represents shares of performance-based restricted stock units granted on August 5, 2020. The value of the 2021 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $449,754. For 2020, represents shares of performance-based restricted stock units granted on August 7, 2019. The value of the 2020 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $374,917.

 

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(21) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on August 6, 2021. The time-vested option grant was to purchase 6,080 shares of Bio-Techne common stock. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $562,419. For 2021, includes three time-vested options and two performance-vested options, four of the five of which were granted on August 5, 2020. For the time-vested option grants made on August 5, 2020, one is the annual long-term incentive grant to purchase 9,990 shares, and the other is a supplemental grant to purchase 8,325 shares, each vesting one-third per year over three years. A third time-vested option to purchase 10,997 shares of Bio-Techne common stock was issued on March 1, 2021, with all shares vesting on August 30, 2022. The first of the two performance-vested options is the annual long-term incentive grant, the value of which at the grant date assuming the highest level of performance conditions will be achieved is $449,967. The second performance-vested option grant, assuming targeted revenue from COVID-19 products will be achieved, is $499,997. As of the date of this proxy statement, the likelihood the target will be achieved is remote. For 2020, includes a time-vested option to purchase 13,290 shares of Bio-Techne common stock issued on August 7, 2019, plus a performance-vested option also granted on August 7, 2019. The value of the 2020 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $374,999.
(22) Includes a cash bonus of $907,290 earned under the Company’s short-term incentive plan in effect for the applicable year, and a cash performance unit payment of $8,270 vested based on actual performance achieved under the 2020 performance-based award.
(23) For 2022, represents base salary prorated for actual employment from Mr. Geist’s hire date through the end of the fiscal year. The annualized amount for 2022 is $500,000.
(24) For 2022, represents 2,490 shares of time-vested restricted stock granted on February 1, 2022, plus performance-based restricted stock units also granted on February 1, 2022. The value of the fiscal year 2022 performance-based award at the grant date assuming the highest level of performance conditions will be achieved is $337,319. As this amount was prorated based on Mr. Geist’s employment agreement for a partial year of service, the value of the fiscal year 2022 performance-based award assuming the highest level of performance conditions will be achieved would have been $674,638.
(25) For 2022, includes one time-vested option and one performance-vested option, both of which were granted on February 1, 2022. The time-vested option grant was to purchase 3,978 shares of Bio-Techne common stock. If Mr. Geist had been employed with the Company for the full fiscal year, options to purchase 7,956 shares of common stock would have been granted. The value of the 2022 performance-based award at the grant date, assuming the highest level of performance conditions will be achieved, is $337,486. As this amount was prorated based on Mr. Geist’s employment agreement for a partial year of service, the value of the fiscal year 2022 performance-based award assuming the highest level of performance conditions will be achieved would have been $674,973.
(26) Includes a cash bonus of $425,000 earned under the Company’s short-term incentive plan in effect for the applicable year. The annualized amount of this cash bonus assuming employment for the full year is $850,000.

 

2022 Grants of Plan-Based Awards

 

The following table sets forth certain information with respect to grants of plan-based awards for the NEOs granted in fiscal year 2022.

 

      Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
   Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
   All
Other
Stock
Awards:
Number of
   All Other
Options
Awards:
Number of
Securities
Underlying
   Exercise
or Base
Price of
Option
Awards
  Grant
Date Fair
Value of
Stock and
Option
 
Name  Grant
Date
  Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
   Shares(3)
(#)
   Options(4)
(#)
   (per share)
($)
  Awards(5)
($)
 
Charles Kummeth      946,400    1,892,800   $3,785,600                                   
      11,222    22,445    33,667                            
  8/6/2021               2,672    5,344    8,016               2,574,846 
  8/6/2021               10,438    20,877    31,315         —     481.82     2,574,876  
  8/6/2021                               20,876    481.82    2,574,794 
  8/6/2021                           5,344           2,574,846 
James Hippel      318,300    636,600    1,273,200                            
      2,723    5,446    8,169                            
  8/6/2021               648    1,297    1,945               624,760 
  8/6/2021               2,533    5,067    7,600            481.82   624,910 
  8/6/2021                               10,134    481.82    1,249,902 
William Geist(6)      212,500    425,000    850,000                            
      1,176    2,352    3,528                            
  2/1/2022               280    560    840               224,879 
  2/1/2022               995    1,989    2,984            401.57   224,991 
  2/1/2022                               3,978    401.57   449,406 
  2/1/2022                           2,490           999,909 

 

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      Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
   Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
   All
Other
Stock
Awards:
Number of
   All Other
Options
Awards:
Number of
Securities
Underlying
   Exercise
or Base
Price of
Option
Awards
  Grant
Date Fair
Value of
Stock and
Option
 
Name  Grant
Date
  Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
   Shares(3)
(#)
   Options(4)
(#)
   (per share)
($)
  Awards(5)
($)
 
Kim Kelderman     252,810    505,620   $1,011,240                            
      1,743    3,486    5,229                            
  8/6/2021               415    830    1,245               399,911  
  8/6/2021               1,621    3,243    4,864            481.82   399,942  
  8/6/2021                               6,486    481.82   799,967  
Brenda Furlow      226,823    453,645    907,290                            
      1,634    3,267    4,901                            
  8/6/2021               389    778    1,167               374,856  
  8/6/2021               1,520    3,040    4,560            481.82   374,946  
  8/6/2021                               6,080    481.82   749,892  
David Eansor(7)      279,090    558,180    1,116,360                            
      1,176    4,357    6,535                            
  8/6/2021               519    1,037    1,556               499,808  
  8/6/2021               2,027    4,053    6,080            481.82   499,928  
  8/6/2021                               8,107    481.82   999,897  
(1) Row 1 for each NEO represents cash bonuses that could have been earned under the Company’s Management Incentive Plan for fiscal year 2022 and would have been paid in fiscal year 2023. On July 28, 2022, the Compensation Committee approved the following bonuses: Mr. Kummeth--$3,785,600; Mr. Hippel-- $1,273,200; Mr. Eansor--$1,116,360 (prorated for a partial year of service); Mr. Kelderman--$766,520; Ms. Furlow--$907,290; and Mr. Geist--$850,000 (prorated for a partial year of service). Row 2 for each NEO represents performance-based cash units granted during the fiscal year under the Company’s 2020 Equity Incentive Plan. Such awards will vest if the Company achieves threshold, target, or maximum consolidated adjusted operating income and adjusted revenue growth goals in fiscal year 2024.
(2) Represents the number of performance-based equity awards granted to the participant NEOs during the fiscal year under the Equity Plan. For each NEO, Row 3 represents performance-based restricted stock units and Row 4 represents performance-based options, which awards will vest if the Company achieves threshold, target, or maximum consolidated adjusted operating income and adjusted revenue growth goals in fiscal year 2024.
(3) For Mr. Kummeth, represents a restricted stock award granted for the fiscal year under the Company’s Equity Plan. For Mr. Geist, represents a restricted stock unit award granted under the Company’s Equity Plan. The risk of forfeiture for both awards lapses annually in pro-rata increments over a period of three years, beginning on the first anniversary of the grant date.
(4) Row 5 for each NEO represents the number of time-based stock options granted to the participant during the fiscal year under the Company’s Long-Term Incentive Plan. Such awards vest annually in pro-rata increments over a period of four years from the grant date.
(5) The fair value of the equity awards is determined pursuant to ASC Topic 718, based on the probable outcome of the performance conditions and excluding the effect of estimated forfeitures. Assumptions used in the calculation of the fair value of the equity awards are described in Note 10 to the Company’s audited financial statements for fiscal year 2022, included in the Company’s Annual Report on Form 10-K.
(6) Row 1 for Mr. Geist represents the full amount he may have earned if he had been employed for the full year. Given Mr. Geist’s employment agreement, his performance-based cash units and performance-based equity grants and were prorated for his partial year of service. If Mr. Geist had been employed during the full year, his performance-based awards would be double the figures disclosed in the table above.
(7) Row 2 for Mr. Eansor represents the full amount he may have earned at the time of grant. These performance-based equity awards have been prorated for his time of employment over the next two years. Row 3 represents the performance-based restricted stock units that were granted August 6, 2021. The value of these performance-based restricted stock units has been prorated based on his time of service and are valued at $110,819 based on the probable outcome of the performance conditions. This represents 345 units at maximum, 230 units at target, and 115 units at threshold. Row 4 represents performance-based options. The value of these performance-based options has been prorated based on his time of service and are valued at $111,086 based on the probable outcome of the performance conditions. This represents 1,351 options at maximum, 901 options at target, and 450 units at threshold. Row 5, representing time-based stock options granted, is not impacted by Mr. Eansor’s retirement as he was of retirement age at the end of his employment.

 

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2022 Outstanding Equity Awards at Fiscal Year-End

 

The following table shows all outstanding stock options, restricted stock units and restricted stock held by the NEOs on June 30, 2022.

 

      Option Awards  Stock Awards
Name  Grant Date  Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
    Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares of
Stock that
have not
Vested
(#)
    Market
Value of
Shares of
Stock that
have not
Vested
($)
  Number of
Unearned
Shares
Units or
Other
Rights that
have not
Vested
(#)
  Market
Value of
Unearned
Shares that
have not
Vested
($)
Charles Kummeth  08/07/2015   95,346(1)         $108.49  08/07/2022               
  08/18/2016   101,841(2)         106.59  08/18/2023               
   08/18/2016   154,169(3)         106.59  08/18/2023               
   10/26/2017   77,429(4)         125.05  08/09/2024               
   10/26/2017   117,342(5)         125.05  08/09/2024               
   08/08/2018   45,167(6)   15,055     177.32  08/08/2025               
   08/08/2018   90,334(7)         177.32  08/08/2025               
   08/07/2019   28,575(8)   28,575     190.41  08/07/2026   3,764(9)   1,304,753      
   08/07/2019   (10)   85,725     190.41  08/07/2026   (11)      16,937  5,871,042
   08/05/2020   9,574(12)   28,721     267.87  08/05/2027   5,724(13)   1,984,167      
   08/05/2020   5,550(14)      11,100  267.87  08/05/2027               
   08/05/2020   (15)      57,442  267.87  08/05/2027   (16)      12,879  4,464,377
   08/05/2020   (17)      16,650  267.87  08/05/2027               
   08/06/2021   (18)      20,876  481.82  08/06/2028   5,344(19)   1,852,444      
   08/06/2021   (20)      31,315  481.82  08/06/2028   (21)      8,016  2,778,666
James Hippel  10/26/2017   22,829(4)         125.05  08/09/2024               
  10/26/2017   24,460(5)         125.05  08/09/2024               
   08/08/2018   18,067(6)   6,022     177.32  08/08/2025               
   08/08/2018   18,066(7)         177.32  08/08/2025               
   08/07/2019   13,291(8)   13,290     190.41  08/07/2026               
   08/07/2019   (10)   19,936     190.41  08/07/2026   (11)      3,938  1,365,068
   08/05/2020   4,787(12)      14,360  267.87  08/05/2027               
   08/05/2020   2,775(14)      5,550  267.87  08/05/2027               
   08/05/2020   (15)      14,360  267.87  08/05/2027   (16)      3,219  1,115,834.16
   08/05/2020   (17)      8,325  267.87  08/05/2027               
   08/06/2021   (18)      10,134  481.82  08/06/2028               
   08/06/2021   (20)      7,600  481.82  08/06/2028   (21)      1,945  674,215
William Geist  02/01/2022   (24)      3,978  401.57  02/01/2029   2,490(25)   863,134      
  02/01/2022   (26)      2,984  401.57  02/01/2029   (27)      840  291,178
Kim Kelderman  05/01/2018   7,511(22)         150.78  05/01/2025               
  08/08/2018   9,033(6)   3,011     177.32  08/08/2025               
   08/08/2018   9,033(7)         177.32  08/08/2025               
   08/07/2019   7,974(8)   7,974     190.41  08/07/2026               
   08/07/2019   (10)   11,961     190.41  08/07/2026   (11)      2,363  819,110
   08/05/2020   2,997(12)      8,991  267.87  08/05/2027               
   08/05/2020   2,775(14)      5,550  267.87  08/05/2027               
   08/05/2020   (15)      8,991  267.87  08/05/2027   (16)      2,015  698,480
   08/05/2020   (17)      8,325  267.87  08/05/2027               
   08/06/2021   (18)      6,486  481.82  08/06/2028               
   08/06/2021   (20)      4,864  481.82  08/06/2028   (21)      1,245  431,567

 

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      Option Awards  Stock Awards
Name  Grant Date  Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
    Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares of
Stock that
have not
Vested
(#)
    Market
Value of
Shares of
Stock that
have not
Vested
($)
  Number of
Unearned
Shares
Units or
Other
Rights that
have not
Vested
(#)
  Market
Value of
Unearned
Shares that
have not
Vested
($)
Brenda Furlow  10/26/2017   9,503(5)