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September 14, 2021

Dear Fellow Shareholders:

On behalf of the Bio-Techne Board of Directors, we are pleased to invite you to join us at the 2021 Annual Meeting of Shareholders of Bio-Techne Corporation (the “Company”). The meeting will be held virtually on October 28, 2021, at 8:00 a.m. Central Time. We will cover items of business as described in this Proxy and provide attendees with an opportunity for questions.

Given the current pandemic, we plan to conduct this year’s meeting solely as a webcast. You will be able to join the annual meeting online, vote your shares electronically and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/TECH2021. We are pleased to offer this virtual meeting to provide ready access for our shareholders. After the meeting, we will post any questions and answers regarding topics of material interest to shareholders.

Only shareholders of record shown on the books of the Company at the close of business on September 3, 2021 will be entitled to attend and vote at the Annual Meeting of Shareholders or any adjournment thereof. Each shareholder is entitled to one vote per share on all matters to be voted on at the Annual Meeting of Shareholders.

We hope that you will join the webcast of the Annual Meeting of Shareholders. Whether or not you plan to attend, we encourage you to designate the proxies to vote your shares as soon as possible. Any shareholder may vote over the telephone or Internet using the instructions provided. Your cooperation in promptly signing and returning the Proxy or voting by Internet will help avoid further solicitation expense to the Company.

Thank you for your continued support of and interest in Bio-Techne.

Sincerely,

 

Charles (“Chuck”) R. Kummeth

President and Chief Executive Officer

This Proxy Statement contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend” and other similar words. Forward-looking statements in this Proxy Statement include, but are not limited to, statements regarding individual and Company performance objectives and targets and statements relating to the benefits of the Company’s acquisitions, product launches and business strategies. These and other forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this Proxy Statement can be found in the Company’s periodic reports on file with the Securities and Exchange Commission (the “SEC”). The forward-looking statements speak only as of the date of this Proxy Statement and undue reliance should not be placed on these statements. We do not undertake to publicly update or revise any forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.

We provide below highlights of certain information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider before you decide how to vote. You should read the entire Proxy Statement carefully before voting.

To assist you in reviewing the proposals to be acted upon, we are providing information about business, governance and compensation highlights for FY 2021. For more complete information about these topics, please review the Company’s Annual Report on Form 10-K and the complete Proxy Statement.

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

Our team continued to deliver on our long-term strategy in FY 2021, leading to another year of strong financial results.

Highlights of our FY 2021 performance include:

 

We are accelerating our momentum to develop, manufacture and commercialize innovative and best-in-class life sciences tools and products for our customers that conduct research or develop products for diagnostics and therapeutics. Our acquisition of Asuragen gave us a leading portfolio of kitted molecular diagnostic and research products to penetrate the growing genetic screening and oncology testing markets, and augmented our legacy clinical controls business with molecular controls. During FY 2021, we further strengthened our cell and gene therapy portfolio by completing construction of our state of the art 61,000 square foot GMP-compliant manufacturing facility to meet forecasted demand for GMP-grade materials as the growing pipeline of cell and gene therapies make it through clinical drug development phases and gain regulatory approvals. During the pandemic, our portfolio of innovative proteomic research reagents and analytical tools, tissue pathology and spatial genomic assays and raw materials for Covid-related diagnostics enabled SARS-CoV-2 research, diagnostic and therapeutic development, providing a durable revenue stream for the Company. We are very proud of these accomplishments and believe that we are well-positioned to continue our strong performance and growth.

The Company had taken a number of measures early on in the pandemic with a focus on keeping our employees safe while ensuring continued operations as an essential business supporting our customers’ COVID-19 discoveries and other important medical research, diagnostics and therapeutics development. The Board and management were very focused on maintaining employee morale and retaining key employees, believing that doing so was the best way to secure the Company’s long-term future. Those early actions, described more fully in last year’s proxy, resulted in minimal disruption to the business in FY 2020 and laid the foundation for the Company’s success in FY 2021.

Management and the Board faced continued uncertainty heading into FY 2021, however. Consequently, the Company continued protective employee safety and business continuity measures throughout FY 2021. And the Board and its committees continued to receive regular reports on management’s activities in response to pandemic impacts, thereby fulfilling its risk oversight and strategic guidance roles. The Board also received regular reports from management regarding the Company’s significant initiatives to develop and launch new products specifically for research, diagnostic and therapeutic efforts to respond to the COVID-19 disease, as described above.

As vaccination efforts have mitigated the pandemic in certain geographies, the Company’s employees have begun to resume pre-pandemic work schedules. This, together with the mitigation efforts described above and increased global focus on healthcare and life science research, has allowed the Company to enjoy significant growth and financial success in FY 2021. Among other things, the Company distributed some of its earnings to more employees, further extending its annual cash bonus program to cover all management and all individual contributors not already on a commission plan.

Many of our corporate governance practices are the direct result of feedback from our shareholders and other stakeholders. The result of our continuous efforts to improve the governance of our company can be seen in our well-balanced, strong and experienced board, our ongoing shareholder engagement efforts, our executive compensation program and our incorporation of many best practices.

The Company values the perspectives of its shareholders. Management meets frequently with key shareholders to discuss the Company’s financial performance and strategies. As described more fully in the section below entitled “Shareholder Engagement and Communications,” in FY 2021, directors and management once again undertook a robust engagement process with our largest shareholders regarding governance, social and environmental issues. We reached out to shareholders representing over 50% of our shares outstanding. Our shareholders were generally positive about the Company’s financial performance and governance positions, as well as our initiatives with respect to sustainability, as described below in “Corporate Sustainability.”

At the recommendation of the Nominations and Governance Committee, the Board last year amended its Principles of Corporate Governance to respond to feedback from shareholders and formalize the Company’s commitment to diversity of leadership in all respects, including specifically diversity of gender, ethnicity and race. In furtherance of this goal, in late June 2020, the Board appointed a second woman, Julie Bushman, to serve as a director; she is one of the nominees listed below. The Board also directed management to gather and disclose information regarding directors’ status with respect to underrepresented minority categories, as disclosed below.

The following is an overview of our director nominees submitted for election at the 2021 Annual Meeting. Each director nominee is elected annually by a majority of votes cast.

 

Our strong performance during FY 2021 can be at least partially attributed to our experienced board of directors. Our predominantly independent board includes a range of newer and tenured directors with a balanced and diverse background of experience, education and talent. The following is information about our current slate of nominees and some of the best practices our board follows:

 

 

As a highly acquisitive science-based company, we focus on a mix of science/technology and business expertise. Our directors reflect this balance, as well as 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 better align with the Company’s strategic vision and business, and the number of our director-nominees with that identified skill:

 

Other corporate governance measures our board takes to provide shareholder value and manage the Company for long-term success include:

With our strategic focus on growing the business over the long term, it is imperative that our executive compensation program motivates our talented management team in such a manner as to encourage and reward successful execution of this business strategy. To achieve this, we have established an executive pay program with a strong pay-for-performance foundation. We utilize the following compensation elements:

We believe that pay should be linked to performance – and that executives and long-term shareholders alike should benefit from our success and growth. Consequently, while the balance of the above components may change slightly from year to year based on corporate strategy and objectives, among other considerations, the mix of pay is heavily weighted toward performance.

 

 

Our bylaws provide that the number of directors shall be determined by the shareholders at each Annual Meeting. Your Board unanimously recommends that the number of directors be set at nine. Under applicable Minnesota law and the Company’s bylaws, approval of the proposal to set the number of directors at nine requires the affirmative vote of the holders of the greater of: (1) a majority of the voting power of the shares represented in person or by proxy at the Annual Meeting with authority to vote on such matter; or (2) a majority of the voting power of the minimum number of shares that would constitute a quorum for the transaction of business at the Annual Meeting.

Over the last seven years, we have undergone a thoughtful, gradual board refreshment process as we have also significantly expanded the Company. In 2014, we implemented a director retirement provision in our Principles of Corporate Governance and have subsequently followed that policy. As a result, the average director tenure has dropped from 13.8 years in 2013 to 10 years currently.

While refreshment is important, it is also critical to the effectiveness of the Board to make replacements gradually so that the Board retains a balance of experience and new perspectives. In 2017, with three directors reaching the retirement age of 75, the Nominations and Governance Committee recommended, and the Board unanimously approved, a transition plan that staggered these individuals’ retirement to provide for continuity and a smooth transition. At the 2017 and 2018 Annual Meetings, the shareholders elected three new Board members as part of the refreshment process. Mr. Harold Wiens retired in 2020 and was replaced by Ms. Julie L. Bushman.

The nine directors elected at the Annual Meeting will hold office until the 2022 Annual Meeting of Shareholders and until their successors have been elected and qualified, or until their earlier death, resignation or removal. Each nominee has informed the Board that he or she is willing to serve as a director. If any nominee should decline or become unable or unavailable to serve as a director for any reason, your proxy (the “Proxy”) authorizes the persons named in the Proxy to vote for a replacement nominee, if the Board names one, as such persons determine in their best judgment. As an alternative, the Board may reduce the number of directors to be elected at the Annual Meeting.

Under the Company’s Amended and Restated Articles of Incorporation, directors will be elected as follows: (i) if the number of director nominees is equal to (or less than) the number of directors to be elected, directors will be elected by a majority vote, meaning that directors who receive a greater number of “FOR” votes than “AGAINST” votes will be elected; (ii) if the number of director nominees exceeds the number of directors to be elected, directors will be elected by a plurality of votes cast. Under the Board’s director resignation policy, an incumbent director who does not receive a majority of the votes cast “FOR” his or her election, in an election where the majority vote standard applies, must offer to tender his or her resignation to the Company’s Nominations and Governance Committee. The policy further provides that 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 director’s resignation, the director will continue to serve until the next annual meeting and until his or her successor is duly elected.

The following is a brief description of each nominee, including age, years of service on this Board, other public company directorships, as well as principal occupation, position and business experience for at least the past five years. Each director’s biographical information includes a description of the director’s experience, qualifications, attributes or skills that qualify the director to serve on the Company’s Board.

The Board of Directors is the Company’s governing body, with responsibility for oversight, counseling and direction of the Company’s 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 the Company’s shareholders and to ensure the vitality of the Company for its customers, employees and other individuals and organizations that depend on the Company. To achieve its goal, the Board monitors both the performance of the Company and the performance of the CEO. It is also integrally involved in strategic planning, 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.

The Board has adopted Principles of Corporate Governance applicable to all directors, which can be found on the Investor Relations page of our website at www.bio-techne.com. The Principles describe the Company’s corporate governance practices and policies and provide a framework for the governance of the Company. Among other things, they require a majority of the members of the Board to be independent directors and require candidates for director to meet minimum qualifications including high moral character and mature judgment. The Principles also specify that the Company shall maintain Audit, Compensation and Nominations and Governance Committees which consist entirely of independent directors.

The Board annually reviews the independence of each director. The Board has affirmatively determined that all of the Company’s non-employee directors are “independent” as such term is defined in the applicable requirements of the SEC and Nasdaq (collectively, the “Applicable Rules”). Mr. Kummeth is not independent based on his service as the Company’s CEO and President. In making its independence determinations, the Board reviewed transactions and relationships between the director, or any member of his or her immediate family, and the Company and its subsidiaries based on information provided by the director, Company records and publicly available information.

Mr. Baumgartner, an independent director, serves as Chair of the Board. The Board has determined that dividing the roles of Chair and CEO is currently the most effective leadership structure for the Company because of the differences between the two roles. The Board is responsible for setting the strategic direction for the Company. The Chair of the Board sets the agenda for Board meetings and presides over meetings of the full Board and executive sessions of the independent directors. The CEO executes the Board’s direction and is responsible for the day-to-day leadership and performance of the Company. In addition, the independent directors of the Board meet in executive session without members of management present on a regularly scheduled basis.

The Board has determined that maintaining an independent Chair, along with the independence of a majority of directors, helps maintain the Board’s independent oversight of management and ensures that the appropriate level of independence is applied to all Board decisions. In addition, each of the four Board committees consists entirely of independent directors.

Risk assessment and oversight is an integral part of Board and Committee deliberations throughout the year. The Company’s Board administers its risk oversight function through its committees, as described below. It oversees some categories of risk as an entire board directly, specifically with respect to strategic, technology, cybersecurity and operational risks, as well as risks related to environmental and social matters. In performing their oversight responsibilities, the Board and Committees review policies and guidelines that senior management use to manage the Company’s exposure to material categories of risk. In addition, the Board and Committees review the performance and functioning of the Company’s overall risk management function and management’s establishment of appropriate systems for managing risk.

Each of the Board’s committees has risk oversight duties corresponding to its areas of responsibility, as described in its charter. The Audit 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 Company’s independent auditors to review the Company’s risk exposures, the potential financial impact those risks may have on the Company, the steps management takes to address those risks, and how management monitors emerging risks. With respect to the Company’s compensation plans and programs, the Compensation Committee structures such

plans and programs to balance risk and reward, while mitigating the incentive for excessive risk-taking by the Company’s executive officers and employees. The Nominations and Governance Committee oversees the management of risks associated with the composition and independence of the Company’s Board, as well as general corporate governance risks and policies and maintenance of the Code of Ethics and Business Conduct.

The risk oversight roles described above are not merely academic exercises. In response to the pandemic, which had a material impact on the Company particularly in the fourth quarter of FY 2020 and continuing in FY 2021, the Board received regular reports from management on the various implications and effects of the pandemic on the Company’s business, discussed management’s responses and provided guidance in a variety of related matters.

The Board currently has four standing Committees: the Audit Committee, the Compensation Committee, the Nominations and Governance Committee and the Science and Technology Committee. Each of these committees is governed by a written charter approved by the Board in compliance with the Applicable Rules. The charter of each committee requires an annual review by such committee. The charters are available on our website at www.bio-techne.com in the “Investor Relations” section under “Corporate Governance.”

Each member of our Audit, Nominations and Governance and Compensation committees is independent, as determined by the Board, under the Applicable Rules. In addition, each member of the Audit Committee and the Compensation Committee meets the additional independence standards for committee members under the Applicable Rules. The members of each standing committee are appointed by the Board each year for a term of one year and until their successors are elected, or until the earlier death or resignation or removal from the committee or the Board. In addition, the Board has, on occasion, established committees to deal with particular matters the Board believes appropriate to be addressed in that manner.

The Audit Committee is responsible for the appointment, supervision and evaluation of the Company’s independent registered public accounting firm and for reviewing the Company’s internal audit procedures, the quarterly and annual financial statements of the Company, and monitoring the Company’s internal controls over financial reporting and the results of the annual audit. The Audit Committee’s other responsibilities include approval of related party transactions, oversight of the Company’s cash investment policy and monitoring the Company’s financial fraud hotline and other compliance matters having financial impact. The Board has determined that, for FY 2021, Messrs. Baumgartner and Higgins are “audit committee financial experts” as such term is defined in the Applicable Rules.

The Compensation Committee determines base and incentive compensation for executive officers of the Company, establishes overall policies for executive compensation and reviews the performance of the executive officers. The Compensation Committee works with Mr. Kummeth to establish compensation and performance goals for the other executive officers and, acting independently, establishes the compensation and performance goals for Mr. Kummeth. The Compensation Committee also recommends to the Board and administers director compensation policies and practices, and oversees the Company’s management of human capital generally.

The Nominations and Governance Committee recruits well-qualified candidates for the Board, selects persons to be proposed in the Company’s Proxy Statement for election as directors at annual meetings of shareholders, determines whether each member of the Board is independent under Applicable Rules, establishes governance standards and procedures to support and enhance the performance and accountability of management and the Board, considers the composition of the Board’s standing committees and recommends any changes, evaluates overall Board performance, assists committees with self-evaluations, and monitors emerging corporate governance trends. In fulfilling its responsibilities, the Nominations and Governance Committee assesses the appropriate size of the Board of Directors, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominations and Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Nominations and Governance

Committee through current members of the Board of Directors, professional search firms, shareholders or other persons and may be considered at any point during the year. Additional detail regarding the Nominations and Governance Committee’s process for identifying and evaluating candidates is described in the section below entitled “Director Qualifications, Diversity and Refreshment.”

The Science and Technology Committee assists 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 the Company's current and planned R&D programs and technology initiatives. The Committee also assists the Board in evaluating the scientific elements of the Company's acquisitions and business development activities, and risks related to research and development. The Committee also reviews and advises the Board and management on the overall intellectual property strategy of the Company.

The Board met five times during FY 2021. Each director attended 100% of the Board meetings and 100% 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 and otherwise communicating informally throughout the year on various Board and committee matters with executive management, advisors and others on matters affecting the Company. All directors attended the Annual Meeting of Shareholders in October 2020.

The membership of each standing committee as of June 30, 2021 and the number of committee meetings held during FY 2021 are identified in the table below.

The Company values the perspectives of its shareholders. Management meets frequently with key shareholders to discuss the Company’s financial performance and strategies. In addition, over the last several years the Company has carried out and expanded a shareholder engagement program to discuss governance matters with key shareholders, both proactively and in response to requests from shareholders.

In FY 2021, the Company undertook a robust engagement process with our largest shareholders covering environmental, social and governance matters. Our Board chair, Mr. Baumgartner, who also serves as the Chair of the Nominations and Governance Committee and as a member of the Audit Committee, and Dr. Steer, Chair of our Compensation Committee, led the efforts. We reached out to shareholders representing over 50% of our shareholdings and held meetings with shareholders representing over 40% of our shares outstanding. Topics discussed included the Board’s involvement in setting the Company’s long-term vision and M&A strategy, executive compensation, the process for Board refreshment and Board diversity initiatives, as well as its commitment to continual improvement on ESG matters. Our shareholders were generally positive about the company’s financial performance and positions on governance, executive compensation, and other ESG matters, as described below in “Corporate Sustainability.”

Communications from shareholders are always welcome. Shareholders may communicate directly with the Board of Directors. All communications should be directed to the Corporate Secretary of the Company at 614 McKinley Place N.E., Minneapolis, MN 55413, and should prominently indicate on the outside of the envelope that such communication is intended for the Board of Directors, for non-management directors, or for a particular director.

The Nominations and Governance Committee periodically assesses the skills and experience needed of directors to properly oversee the short- and long-term interests of the Company. The Committee utilizes a variety of methods for identifying and evaluating candidates for director, with the ultimate goal of maintaining a well-rounded Board that functions collegially and independently. Candidates for the Board are considered and selected on the basis of the criteria set forth in our Principles of Corporate Governance, including outstanding achievement in their professional careers, experience, wisdom, personal and professional integrity, their ability to make independent, analytical inquiries, and their understanding of the business environment. Candidates must have the experience and skills necessary to understand the principal operational and functional objectives and plans of the Company, the results of operations and financial condition of the Company, and the position of the Company in its industry. Candidates must have a perspective that will enhance the Board’s strategic discussions and be capable of and committed to devoting adequate time to Board duties. 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.

While the Company does not have a formal diversity policy for board membership, the Company seeks 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 by the Nominations and Governance Committee 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 reflect that feedback and formalize the Company’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, which information is disclosed above in “Board Nominees.” In furtherance of its desire to increase diversity, 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.

The Nominations and Governance Committee will apply the same criteria in evaluating candidates recommended by shareholders as is used for candidates recommended by other sources, which criteria are described above. 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 such background and biographical material as will enable the Nominations and Governance Committee to make an initial determination as to whether the nominee satisfies the criteria for directors set forth in our Principles of Corporate Governance. Shareholders who intend to nominate a candidate for election by the shareholders at the Annual Meeting (in cases where the Board does not intend to nominate the candidate or where the Nominations and Governance Committee was not requested to consider his or her candidacy) must comply with the procedures described under the section of this Proxy Statement entitled “Additional Corporate Governance Matters—Shareholder Proposals for 2022 Meeting,” and with Bio-Techne’s bylaws.

The Board continues to consider regular refreshment of its membership as an important governance consideration. Two directors retired in FY 2017, another in FY 2018, and a fourth in FY 2019, all after meeting the retirement age as specified in our Principles of Corporate Governance. This has allowed for regular refreshment, including the addition of Ms. Julie L. Bushman as the Company’s newest director in 2020.

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

There was no change in director compensation for FY 2021. Each non-employee member of the Board receives an annual retainer fee of $75,000. Additional cash compensation is paid for the following roles:

Board Chair – $120,000

Chair of Audit Committee – $25,000

Chair of Compensation Committee – $17,500

Chairs of Other Committees – $15,000

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 that vests upon the sooner of the one-year anniversary of the date of grant 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 served. Non-employee directors are also paid their reasonable expenses for attending Board and Committee meetings. Directors who are employees of the Company or its subsidiaries do not receive any compensation for service on the Board.

The Board has adopted stock ownership guidelines for all directors and executive officers to better align their interests with other shareholders. Non-employee directors are required to own stock at least equivalent in value to three times their annual retainer fee within five years. Although they have five years from July 1, 2016 (or their appointment or election to the Board), all directors met the requirements as of June 30, 2021.

Directors who are not employees of the Company were compensated for FY 2021 as follows:

Mr. Wiens retired as of the October 2020 Annual Shareholder Meeting and therefore did not receive equity grants in FY 2021. In addition to the restricted stock grant of 391 shares mentioned above and granted to all directors

in October 2020, Ms. Bushman also received a partial year grant upon commencement of her service as a director on August 3, 2020, in the amount of 89 shares at a grant date market value of $278.87 per share. As of June 30, 2021, each non-employee director other than Ms. Bushman held 391 unvested shares of restricted stock.

We have built a creative, caring team of colleagues who bring unique perspectives and talents in support of our strategic goals. We have grown from approximately 850 employees in 2013 to over 2,700 employees globally today, adding people both through organic growth and by acquisition. Ensuring that our employees -- both those who have been with us for years and those who recently joined Bio-Techne – share a common vision and set of values has been and will continue to be critical to our success. One way we have achieved that is through implementation of a common set of four key EPIC values – Empowerment, Passion, Innovation and Collaboration. Employees’ dedication to these values are leading the Company to develop and launch innovative technologies that help our customers address some of society's most difficult challenges in the healthcare and life sciences fields, improve the communities we work in and build a sustainable and thriving corporate culture.

We understand that delivering on our mission over the long term requires a focus by management on corporate sustainability, including environmental, social, and governance (“ESG”) considerations, with oversight by the Board, both directly and through its committees. Specifically, management focuses on what the Company terms the “Four Pillars” of corporate sustainability, and periodically reports its progress on initiatives under these Four Pillars to the Board or its committees, as appropriate.

For the first time last year, we prepared and published our inaugural Corporate Sustainability Report. In it, we describe what we mean by each of these Four Pillars and provide examples of how we incorporate them into our values and commitment to a sustainable business. Our Corporate Sustainability Report is posted on our website, available at https://bio-techne.com/about/corporate-and-social-responsibility.com, and includes additional information that is not part of or incorporated by reference into this Proxy Statement.

Our ongoing shareholder engagement efforts have provided valuable insights and feedback regarding a number of areas of investor focus, including environmental and social issues, and ESG disclosure and reporting. As a result of their feedback and other factors, in the coming year we plan to undertake a more comprehensive initiative to assess, benchmark and prioritize our ESG and sustainability practices, including performing a greenhouse gas emission inventory and developing a plan to set emission reduction targets for certain of our key U.S. sites, with the goal of reducing our carbon footprint over time.

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. This CD&A is intended to be read in conjunction with the tables which immediately follow this section, which provide further historical compensation information.

As of June 30, 2021, the following officers constituted our Named Executive Officers (collectively, our “NEOs”):

We continued to execute on our long-term growth strategy in FY 2021, despite the challenges resulting from the pandemic. Our CEO has led a strategy driving growth through innovation, making organic investment in the core business as well as expanding our portfolio and end markets through our most recent acquisitions. This focus on innovation, continued execution of our strategy, and strong demand for our proteomic, genomic and diagnostic products resulted in another year of very strong financial performance. The Company ended the year with 22% organic revenue growth, resulting in total revenues of $931 million for FY 2021. The Company continues to diversify in many adjacent life science areas that we expect will provide accelerated growth and stability for investors, including diagnostics and proteomic tools for use in therapeutics as well as research. 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, we were able to grow our adjusted operating income by 47.2% to $362 million, resulting in an adjusted operating margin of 38.9% for the year. During FY 2021, we returned approximately $93 million to our shareholders, including $50 million in the form of dividends and $43 million in share buybacks.

 

Our Compensation Committee (the “Committee”) aligns pay with performance and strategic initiatives by tying a significant portion of awards to rigorous revenue- and earnings-based financial goals and by using both short- and long-term incentives.

The COVID-19 pandemic has brought about unprecedented disruptions, changes and opportunities for global business; for many companies, the pandemic fundamentally changed their financial goals and business strategies. And dealing with the uncertainty and unpredictability has been particularly challenging for business leaders. The Committee determined that management’s excellent leadership throughout the early months of the pandemic in FY 2020 had set up the Company for success in FY 2021 and beyond. Not only was the Company able to avoid furloughs or layoffs and continue to make and ship products, but it had quickly pivoted its product development efforts to provide tools for Covid-19 research and diagnostics. Nonetheless, as the Company planned for FY 2021 last spring and early summer, the course of the pandemic and its impact on our business remained highly unpredictable. The Company certainly projected some revenue growth as customers appeared to be returning to work but continued to operate in a conservative manner. Given these factors, the Committee determined that it would grant a supplemental award of stock options to executive officers comprised of time-based options vesting over three years and a performance-based option award tied to sales of Covid-19 related products over the three years ending with FY 2023. The intent of this grant was to reward executive leadership for positioning the Company for success, encourage continued retention, and drive incremental financial performance and shareholder value creation consistent with our performance-driven executive compensation program.

In its review of FY 2021 performance, the Committee determined that Company management provided outstanding leadership through the pandemic and into the recovery. Among the matters considered by the Committee were: (i) the strength of the Company’s performance throughout the year, despite some slowness in the first quarter of FY 2021; (ii) the Company’s record performance for the entire fiscal year on both the top and bottom line; (iii) the desire to reward and retain key employees as a result of excellent financial performance; and (iv) the Company’s strong stock performance over the fiscal year, resulting in almost a doubling of the stock price, as investors recognized the Company’s excellent management of the pandemic and strong growth expectations post-pandemic.

In light of all of the factors described above, taking into consideration the enormous effort and operational excellence management demonstrated in responding to and weathering the Covid-19 crisis, the Committee confirmed that management were entitled to receive the maximum bonus for corporate-wide performance. Moreover, all management employees participating in the Company’s management incentive plan received above target cash bonuses for FY 2021. In addition, the Company extended the cash bonus program further to include more employees. For the first time in FY 2020, all levels of management employees had received a Company performance-based bonus, resulting in over 20% of employees receiving an annual bonus. In FY 2021, the Company further extended the bonus program to include all exempt individual contributors as well (not including those who receive commissions), resulting in almost 60% of employees participating in a bonus program.

Consequently, since the Company significantly exceeded the annual operating plan and target metrics, the Committee approved annual cash incentive payouts for all executive officers at 200% of target, as follows:

Cash bonus performance payments for each NEO are reflected in the 2021 Summary Compensation Table. As usual, organic revenue and adjusted operating income measures for cash bonus consideration 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, stock-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 FY 2021.

For the past eight years, NEOs have received performance-based equity awards (with 50% of the value granted in restricted stock units and 50% granted in stock options) that vest as follows: (i) 50% on a three-year adjusted revenue goal and (ii) 50% on a three-year adjusted operating income goal. The three-year performance equity awards granted in FY 2019 vested in August 2021 based on performance in the third year. The targets set three years ago for these grants were as follows:

Based on an assessment of the Company’s performance relative to the goals established at the start of the performance period, the Committee determined that management substantially exceeded the maximums set out above for both Revenue and Operating Income, resulting in a maximum vesting of 150% of target (note that the maximum vesting is capped at 105% of target):

Similar to the calculations for the cash bonus consideration, organic revenue and adjusted operating income measures for the long term equity incentive consideration 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, stock-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 FY 2021.

Our Committee oversees our executive compensation program, which includes several compensation elements that have each been tailored to reward specific aspects of Company-wide and business line performance that the Board believes are central to delivering long-term shareholder value. Executive compensation packages are focused on our key business and performance objectives. 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.

We utilize the above-mentioned compensation elements to create executive compensation packages that are heavily weighted to variable, at-risk pay in order to align pay with performance. The Committee does not have any formal policies for allocating total compensation among the various components. Instead, the Committee uses its judgment, in consultation with its independent compensation consultant, to establish a mix of current, short-term and long-term incentive compensation, and cash and equity compensation for each NEO. The balance between these components may change from year to year based on corporate strategy and objectives, among other considerations. For FY 2021, our NEOs had the following target pay mix:

 

Since Chuck Kummeth became the CEO in 2013, the Company has grown significantly. Executive pay packages focused on Company-wide and segment performance objectives, particularly in operating income and organic revenue, have driven strong growth and shareholder value. While reported CEO pay has increased, total shareholder return has increased at a far faster pace, as shown for the last five years in the graph below.

 

The table below summarizes what we do and what we don’t do with respect to our compensation governance practices. We maintain these best practices to encourage actions that are in the long-term interests of our shareholders and the Company.

For the past five years, the Committee has implemented a compensation structure and plan design that the Committee believes has worked well, resulting in a stable executive team and strong financial performance. We believe shareholders agree. After improving disclosures around our compensation program in recent years, we have received favorable Say on Pay votes of above 95% from shareholders at our Annual Shareholder Meetings in 2019 and 2020. Believing that it is important to maintain a consistent approach to executive compensation, combined with good financial results, our Committee retained the same structure in FY 2021.

The Committee reviews and approves each executive’s compensation annually and is responsible for assuring that compensation for the executive officers is consistent with the objectives of 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. The Committee determines the appropriate level for each compensation component based on these overall compensation objectives. The Committee’s philosophy is to strive to provide market competitive compensation and 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 within the organization.

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 is foundational to this effort. Bio-Techne’s business planning process is determined by the overall business environment, industry and competitive factors and our goals and strategies. The business planning process drives our annual operating plan as well as establishes our long-term financial, operational and strategic objectives.

The Committee reviews and oversees the development and implementation of compensation programs that are aligned with Bio-Techne’s business strategy. The financial performance goals approved by the Committee for the annual and long-term incentive plans are informed by the annual operating plan and Bio-Techne’s long-term strategy.

The Compensation Committee of the Board of Directors is responsible for establishing the compensation programs of the Company’s CEO and other NEOs. The Committee participates in the consideration of employment of prospective executive officers of the Company. The Committee also administers the Company’s equity-based and performance-based compensation plans, including plans under which restricted stock and options are awarded. Accordingly, it is responsible for reviewing cash and equity incentives payable to executives and has the authority to grant restricted shares of Company Common Stock and options to purchase shares of the Company’s Common Stock to all participants under the Company’s equity award plans, and to determine all terms and conditions of such awards.

The Committee annually assesses the base compensation and the potential variable compensation that the NEOs will be eligible to earn by achieving the Company’s financial targets. As part of this assessment, the CEO makes recommendations to the Committee 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 that considers industry

and location and other factors the CEO considers important in establishing competitive compensation for the executives that report to him. 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; executive bonuses should be based on performance; and 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 stock price.

The Committee discusses the CEO’s recommendations and accepts or adjusts them, in whole or in part, based on its own assessment of company strategic goals, executive responsibilities, internal pay equity and its independent review of local comparative data for all industries. The executive officers are not present during the Committee’s final discussion and determination of the type and amount of compensation to be paid.

The Committee has retained Aon Rewards Solutions Practice (“Aon”) as its independent outside compensation consultant since 2013 to assist with setting executive compensation. The Committee has sole authority to retain or replace such independent compensation consultants. The Committee annually evaluates the independent compensation consultant’s independence and performance under the applicable Nasdaq listing standards. The Committee believes that working with an independent compensation consultant furthers the Company’s objectives to recruit and retain qualified executives, align their interests with those of shareholders and ensure that their compensation packages will appropriately motivate and reward ongoing achievement of business goals.

In FY 2021, the Committee determined that Aon continued to be independent under applicable Nasdaq listing standards and retained them to advise the Committee with respect to compensation of the CEO and other executive officers. In that capacity, Aon provided the Committee with a peer group analysis and assisted the Committee in structuring the compensation program for the CEO and other executive officers. Aon did not provide any additional services to the Company during FY 2021.

The Committee refers to a comparative group of life sciences companies when evaluating executive compensation. Although it is not possible to compile a peer group of companies that directly compete with the Company, the companies identified for inclusion in the comparative group operate in the same general industry as the Company, and the Committee believes that such companies compete for a similar pool of executive talent. Furthermore, the peer companies are strategically aligned with the goals of the Company and are similar to the Company with regard to one or more of the following measures: industry, EBITDA, market capitalization, revenue and total shareholder return

While shareholders and advisory groups sometimes rely solely on industry classification and revenue to assess the appropriateness of a peer group, the Committee believes that using EBITDA, market capitalization and total shareholder return in addition to industry and revenue is beneficial because these metrics directly relate to the creation of shareholder value and provide a more appropriate measure of the Company’s place in the market than revenue alone. This is especially true with respect to a high-growth company such as ours. Anticipating continued strong growth, the Committee is looking to hire 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 acquisition in the future. For that reason, the Committee has determined that market capitalization is the primary metric for identifying industry peers, with revenue, EBITDA and total shareholder return used as supplemental metrics.

The Committee uses our compensation peer group as one data point when setting executive pay packages. Although useful as a reference, the Committee does not target any percentile within this peer group as a specific objective. Instead, our compensation decisions are based on the full consideration of many factors, including, but not limited to individual and company performance, market data, internal equity, experience, strategic needs, responsibilities, and the portion of long-term incentive compensation allocated to performance-based versus time-based awards.

In advance of setting FY 2021 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, small modifications were made to the peer group as follows: (i) Myriad Genetics was removed from the peer group as a result of its comparatively much smaller market capitalization levels, total

shareholder return and financial performance; and (ii) EXACT Sciences Corporation and Repligen Corporation were added to the peer group, as they fit within the industry, their market capitalization and revenues were within the proposed size criteria, and they are both high-growth and high-performing companies, similar to Bio-Techne.

For compensation decisions for FY 2021, the following companies were selected as our peer group:

At the time the peer group was confirmed, the peer group had the following median statistics:

The Company’s executive compensation program consists of base salaries, annual cash performance bonuses, long-term equity awards and various benefits, including the Company’s Profit Sharing and Savings Plan in which all qualified employees of the Company participate.

Base salary is the only fixed component of our executive officers’ total cash compensation and provides competitive pay to attract and retain our talented executives. Annual salary decisions are made in recognition of competitive data as well as the skills and experience each individual brings to the Company, the length of time each has been with the Company and the performance contributions each makes. Base salary changes in FY 2021 were primarily the result of executives’ performance and the Company’s growth in revenues, market capitalization and shareholder return.

Our NEOs received the following base salaries for FY 2021:

Executives are eligible to receive cash performance bonuses under the Company’s Short-Term Incentive Plan if predetermined, objective goals are achieved. Challenging goals are set each year to incentivize each executive to focus attention on strategically important goals. Executives may earn between zero and 200% of their target bonus opportunities.

For FY 2021, the annual bonus plan was again set based upon the Company’s consolidated adjusted operating income results, consolidated organic revenue results, and, with respect to the Presidents who lead our reporting segments, FY 2021 adjusted operating income and organic revenue results for their respective segments. The Committee used this approach to align pay with performance over which the executive has significant influence (or line of sight). 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 in FY 2021 had the following weighting to their respective annual incentive opportunities based on Company-wide performance goals:

The range of eligible payouts for FY 2021 at threshold, target, and maximum performance was based on a percentage of each NEO’s salary, as follows:

To calculate the payout for each executive, the percentage of the bonus for each metric is calculated and the resulting percentages are averaged to determine the applicable blended percentage rate.

The 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. As described above, the Committee chose to exercise that discretion in light of the unprecedented circumstances relating to the pandemic and its impact on the business.

A participant must be employed on the last day of the fiscal year to receive any portion of the annual cash incentive payment she or he earns. If the person resigns for any reason before the end of the fiscal year, he or she will forfeit the entire bonus.

As described above, despite the disruptions and challenges caused by the pandemic, the Company had excellent financial results that substantially exceeded target, resulting in an unprecedented across-the-board maximum payment at 200% of target. This was the first time in the five years that this compensation structure has been in place that the executives were paid at the maximum percentage. Payouts under the Short-Term Incentive Plan for FY 2021 for our NEOs were as follows:

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 facilitates the positioning of our NEOs’ total pay within the range of the competitive median of our compensation peer group.

FY 2021 Long-Term Incentive Grants

In FY 2021, long-term incentive awards were granted to all NEOs, including our CEO, in the first quarter of the fiscal year. The following table sets forth the target value of the long-term incentive awards granted to our NEOs in FY 2021. Additional detail with respect to each award granted is provided below.

The Company makes annual stock option grants to executives in order to align the interests of executives with those of shareholders. Executives recognize value only if the market value of the Company’s stock appreciates over time. 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 Committee determines the appropriate stock option award value 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 factors the Committee deems relevant.

FY 2021 Performance Metrics for LTIP Awards. Under the Long-Term Incentive Plan for FY 2021, the Committee approved grants of stock options and restricted stock units (as well as cash performance units to compensate for dividends that would not be received during the vesting period for those restricted stock units) to all executives. These grants have a three-year cliff vesting schedule and therefore vest following the Company’s 2024 fiscal year if the Company achieves threshold, target or maximum consolidated adjusted operating income and consolidated organic revenue goals for FY 2024. 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 under the performance-vested equity for FY 2021:

Awards will vest on a linear scale depending on the level of performance between threshold and maximum levels. Adjusted operating income and organic revenue exclude the impact of foreign currency translation, acquisitions and acquisition-related amortization, costs and expenses, non-recurring litigation expenses and other unusual items.

Bio-Techne’s CEO also receives time-vested restricted stock awards that vest over a three-year period. These awards are intended to further align the CEO’s interests with those of shareholders and to provide competitive total compensation to the CEO. The Committee determines the appropriate number of restricted stock awards by considering the CEO’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 CEO’s performance, the grants made by companies in our compensation peer group and other factors the Committee deems relevant.

In addition to the annual performance award grants described above, the Committee approved supplemental time-based and performance-based option grants to each NEO in FY 2021. The COVID-19 pandemic has brought about unprecedented disruptions, changes and opportunities for global business; for many companies, the pandemic fundamentally changed their financial goals and business strategies. And dealing with the uncertainty and unpredictability has been particularly challenging for business leaders. The Committee determined that management’s excellent leadership throughout the early months of the pandemic in FY 2020 had set up the Company for success in FY 2021 and beyond. Not only was the Company able to avoid furloughs or layoffs and continue to make and ship products, but it had quickly pivoted its product development efforts to provide tools for Covid-19 research and diagnostics, particularly in the Protein Sciences segment. Nonetheless, as the Company planned for FY 2021 last spring and early summer, the course of the pandemic and its impact on our business remained highly unpredictable. The Company certainly projected some revenue growth as customers appeared to be returning to work but continued to operate in a conservative manner.

Given these factors, the Committee determined that it would grant a supplemental award of stock options to executive officers comprised of time-based options vesting over three years and a performance-based option award that would vest in full only if the Company achieves at least $200 million of sales of Covid-19 related products over the three years ending with FY 2023. The intent of this grant was to reward executive leadership for positioning the Company for success, encourage continued retention, and drive incremental financial performance and shareholder value creation consistent with our performance-driven executive compensation program. Mr. Eansor received a larger grant as the segment he leads includes the products likely to contribute the most to meeting that revenue target.

Our employment agreements with our NEOs provide that we will recoup incentive compensation paid to our NEOs to the extent required by any law, government regulation, stock exchange listing requirement, or Company policy promulgated under such standards.

Our Board has implemented stock ownership guidelines applicable to all NEOs. The guidelines are determined in comparison to base salary as follows:

The guidelines are met based on the value of 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 subject to the guidelines and must meet the guidelines at all times following such date. All of the NEOs currently meet the guidelines.

The 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 is given the opportunity to interact with them in social settings.

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

While the Committee considers the deductibility of awards as one factor in determining executive compensation, the Committee also looks at other factors in making its decisions and 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 by us for tax purposes.

In addition to considering the tax consequences, the 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.

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 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 2021 Annual Shareholder Meeting.

Randolph C. Steer (Chair)

Joseph Keegan

Rupert Vessey

Members of the Compensation Committee

The NEOs received compensation for the fiscal years ended June 30, 2021, 2020 and 2019 as set forth in the chart below.

achieved, is $3,224,999. For 2019, includes a time-vested option to purchase 60,222 shares of Common Stock issued on August 8, 2018, plus a performance-vested option also granted on August 8, 2018. The value of the 2019 performance-based award at the grant date, assuming that the highest level of performance conditions will be achieved, is $3,000,274.

achieved, is $599,968. For 2019, includes a time-vested option to purchase 18,066 shares of Common Stock issued on August 8, 2018, plus a performance-vested option also granted on August 8, 2018. The value of the 2019 performance-based award at the grant date, assuming that the highest level of performance condition will be achieved, is $450,038.

The following table sets forth certain information with respect to grants of plan-based awards for the NEOs granted in FY 2021.