February 9, 2010
Mr. Jeffrey Riedler
Assistant Director
Securities and Exchange Commission
Division of Corporate Finance
Washington, DC 20549
Re: Techne Corporation
Form 10-K for the Year Ended June 30, 2009
DEF 41A filed September 22, 2009
Supplemental response dated December 29, 2009
File No. 000-17272
Dear Mr. Riedler:
This letter is in response to the comment letter received by us dated January
28, 2010, concerning our response, dated December 29, 2009, to your comment
letter dated December 15, 2009.
In connection with this response, the Company acknowledges that:
- the Company is responsible for the adequacy and accuracy of the
disclosures in the filing;
- staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission
from taking any action with respect to the filing; and
- the Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under federal securities laws
of the United States.
COMMENT AND RESPONSE:
Definitive Proxy Statement
Performance-Based Bonus Plan
1. Comment: We note your response to comment 4 and reissue the comment in
part. The Compensation Discussion and Analysis still does not disclosure
the budgeted revenues or the specific individual performance objectives the
Executive Compensation Committee considers to determine your executive
officers' bonus payments. Please provide us with draft disclosure for your
2010 proxy statement which provides the following
- A more detailed specific description and quantification of each of the
specific individual and corporate goals and performance objectives;
- Confirmation that you will discuss the achievement of the objectives;
and
- A discussion of how the level of achievement will affect the actual
bonuses to be paid.
To the extent that these criteria are quantified, the discussion in your
proxy statement should also be quantified.
Response: Revised disclosure for the Company's performance-based bonus
plan to be included in the Company's 2010 proxy statement follows (subject
to changes to the executive bonus plan, if any, when the final proxy is
drafted in September 2010). The Company confirms it will discuss
achievement of objectives by disclosing the percentage of accomplishment:
Performance-based bonus plan. Under the Company's Executive Officers
Incentive Bonus Plan, each executive officer may earn a potential bonus of
up to 40% of his or her annual salary. The eligible bonus each executive
officer could earn for fiscal 2010 was: Mr. Oland - $101,640, Mr. Melsen -
$110,000 and Mr. Veronneau - $67,000.
The Plan provides that up to 70% of the eligible bonus is based upon
achieving the Company's budgeted revenue and earnings for the fiscal year
and up to 30% of the eligible bonus is based upon achievement of
qualitative personal goals set for each named executive officer. The
Executive Compensation Committee believes this bonus plan focuses the
executives on sustaining high quality revenue growth, bringing new products
to market, increasing market share and expanding market presence, as well
as balancing increased research and development with expense control.
The Company's Board of Directors reviews, discusses and recommends
changes to a preliminary operating plan and budget for the next fiscal year
at its annual April meeting. The final fiscal year operating plan and
budget is discussed, reviewed and approved at the annual July meeting of
the Board of Directors. The Board of Directors considers both historical
and prospective factors, including the competitive market, economic trends,
and changes in government regulations and funding, when establishing
budgeted revenue and earnings for a fiscal year. Bonuses are awarded on a
prorated basis if revenue and earnings achieved average between 85% and
100% of budgeted revenue and earnings. Budgeted revenues and earnings for
fiscal 2010 were $_______ and $________, respectively. Based upon actual
revenues and earnings for fiscal 2010 of $______ and $________,
respectively, the Executive Compensation Committee has determined that the
Company's revenues and earnings were an average of __% of budget for fiscal
2010. Therefore, each executive officer earned __% (__% of budgeted
revenues and earnings achieved times 70%) of his eligible bonus for fiscal
2010.
The personal goals for the named executive officers are generally
qualitative in nature and position-specific. These personal goals are
established annually by the Executive Compensation Committee taking into
account each executive's responsibilities at the Company and the
recommendations of the Chief Executive Officer as to the executives who
report to him. Following each fiscal year end, the Executive Compensation
Committee assesses the achievement of the personal goals by each named
executive officer, which assessment includes the recommendations of the
Chief Executive Officer as to the achievement of the personal goals of the
executives who report to him.
The personal goals set for fiscal 2010 for Mr. Oland related to:
- accomplishment of the Company's strategic objectives;
- succession planning;
- leadership development; and
- personnel matters.
The Compensation Committee determined that Mr. Oland met __% of his
personal goals and, therefore, earned an additional __% of his eligible
bonus (___% of personal goals achieved times 30%).
The personal goals set for fiscal 2010 for Mr. Melsen related to:
- objectives within the information systems function, including
transition of department leadership, improvement of service levels
and reduction in consulting costs;
- the management of BiosPacific, Inc., the Company's sales subsidiary
that services diagnostic customers, including succession planning and
achievement of financials goals;
- objectives within the research and development function, including
administrative support, analysis of economic opportunities and
communication and enhancement of knowledge regarding Company products
and processes; and
- objectives within the accounting and finance and facilities functions,
including leadership development and operational efficiencies
The Compensation Committee, with input from the Chief Executive Officer,
determined that Mr. Melsen met __% of his personal goals and, therefore,
earned an additional __% of his eligible bonus (___% of personal goals
achieved times 30%).
The personal goals set for fiscal 2010 for Mr. Veronneau related to the
management of the Company's Hematology Division, including:
- the achievement of division revenue and pre-tax earnings and cost of
goods targets of $_____, $_____, and $______, respectively;
- the introduction of new hematology products;
- the improvement of quality control programs;
- regulatory compliance; and
- personnel matters
The Compensation Committee, with input from the Chief Executive Officer
of the Company, determined that Mr. Veronneau met __% of his personal goals
and, therefore, earned an additional __% of his eligible bonus (__% of
personal goals achieved times 30%).
The annual bonus is paid 50% in cash and 50% in stock options. The
officer may elect to exchange all or a part of the cash portion of the bonus
for additional stock options. If such an election is made, the officer is
entitled to 1.7 times the value of the cash bonus in options. The number of
options each executive officer receives is calculated based on the dollar
value of the portion of the annual bonus to be paid in stock options divided
by the closing share price at the date of grant. The options are granted
under the Company's 1997 Incentive Stock Option Plan or 1998 Nonqualified
Stock Option Plan and vest immediately with an exercise price equal to the
closing price of the Company's stock on the date of grant. The stock option
grant date is the date the Executive Compensation Committee determines the
officer's aggregate bonus amount based on achievement of the budgeted
revenue and earnings goals and the individual qualitative personal goals.
For fiscal 2010, Mr. Oland earned __% of his eligible bonus, or $_______.
He was paid a cash bonus of $_____ and was granted stock options in fiscal
2011 for ___ shares of Company stock. For fiscal 2010, Mr. Melsen earned
__% of his eligible bonus or $______. He was paid a cash bonus of $_____
and was granted stock options in fiscal 2011 for ___ shares of Company
stock. For fiscal 2010, Mr. Veronneau earned ___ % of his eligible bonus or
$______. He was paid a cash bonus of $_____ and was granted stock options
in fiscal 2011 for ___ shares of Company stock.
************
We hope that we have adequately addressed your Comment Letter dated January
28, 2010.
Sincerely,
/s/ Thomas E. Oland
Thomas E. Oland
President and Chief Executive Officer
/s/ Gregory J. Melsen
Gregory J. Melsen
Chief Financial Officer
Cc: Travis Rabe, KPMG
Melodie Rose, Fredrikson & Byron