Neogen Corp DEF 14A, filed Sep 18, 2023
Neogen Corp (NEOG)
About this DEF 14A
Neogen Corp filed this DEF 14A on September 18, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Under Section240.14a-12 |
(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)
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No fee required. |
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Fee paid previously with preliminary materials |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
September 18, 2023
To Our Shareholders:
You are cordially invited to attend the 2023 Annual Meeting of Shareholders of Neogen Corporation on Thursday, October 25, 2023, at 10:00 a.m. Eastern Time. The 2023 Annual Meeting of Shareholders will be a completely virtual meeting conducted via webcast. Our goal for the Annual Meeting is to enable the broadest number of
shareholders to participate in the meeting, while providing substantially the same access and exchange with the
Board and management as an in-person meeting. You will be able to participate in the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/NEOG2023.
The Annual Meeting will feature a report on Neogen’s business activities, voting on the election of directors and other important proposals. On the following pages you will find the Notice of the 2023 Annual Meeting of Shareholders and the Proxy Statement.
It is important that your shares are represented at the Annual Meeting, regardless of how many shares you own. Whether or not you plan to attend the Annual Meeting virtually, please vote your shares as soon as possible using one of the methods listed in the Notice of Proxy Statement.
We appreciate your continued confidence in Neogen and look forward to your participation in our virtual Annual Meeting.
Sincerely,
John E. Adent
President & Chief Executive Officer
Your vote is important. Even if you plan to attend the meeting virtually,
PLEASE VOTE YOUR SHARES PROMPTLY.
620 Lesher Place
Lansing, MI 48912
NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS OF NEOGEN CORPORATION
You are cordially invited to attend the Annual Meeting of Shareholders of Neogen Corporation on Thursday, October 25, 2023, at 10:00 a.m. Eastern Time. The 2023 Annual Meeting of Shareholders will be a completely virtual meeting conducted via webcast. You will be able to participate in the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/NEOG2023.
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When: |
Thursday October 25, 2023, at 10:00 Eastern Time |
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Where: |
Webcast at www.virtualshareholdermeeting.com/NEOG2023 |
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Items of Business: |
1. The election of three Class III directors, each to serve for a three-year term or until his or her successor has been duly elected and qualified; |
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2. To approve, by non-binding vote, the compensation of our named executive officers; |
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3. To approve, on an advisory basis, the frequency of future advisory votes on executive compensation; |
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4. To approve the establishment of the Neogen Corporation 2023 Omnibus Incentive Plan; |
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5. To ratify the appointment of BDO USA P.A. as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2024; and |
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6. To act upon such other business as may properly come before the meeting or any adjournment or postponement thereof. |
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Who can vote: |
Holders of shares of Neogen common stock at the close of business on the record date of August 28, 2023, are entitled to notice of, and to vote at, the meeting. |
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How to Vote: |
Your vote is important! Please vote your shares in one of the following ways: |
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1. Via the internet, by visiting www.proxyvote.com. |
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2. By telephone, by calling the number on your proxy card, voting instruction form or notice. |
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3. By mail, by marking, signing, dating and mailing your proxy card. No postage is required if mailed in the United States. |
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4. By voting electronically during the virtual Annual Meeting at www.virtualshareholdermeeting.com/NEOG2023. |
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Please vote your shares promptly, even if you plan to attend the Annual Meeting. Any shareholder attending the Annual Meeting may vote virtually, even if he or she previously returned a proxy. |
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Attending the Meeting: |
The Company has designed the format of the Annual Meeting to provide shareholders with similar rights and opportunities to participate that they would have at an in-person meeting. Shareholders holding shares at the close of business on the record date may attend the Annual Meeting. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting via a live audio webcast by visiting www.virtualshareholdermeeting.com/NEOG2023. To participate in the meeting, you must have the 16-digit control number that is shown on your proxy card. A list of shareholders of record will also be available during the annual meeting on the meeting website. |
The foregoing items of business are more fully described in the Proxy Statement accompanying this notice. During the virtual Annual Meeting, we will present a report on the Company’s business. A copy of our 2023 Annual Report is enclosed.
Amy M. Rocklin Corporate Secretary |
September 18, 2023
Neogen Corporation
620 Lesher Place
Lansing, MI 48912
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
October 25, 2023
TABLE OF CONTENTS
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
October 25, 2023
GENERAL INFORMATION
We are providing this proxy statement to the shareholders of Neogen Corporation (“Neogen”, the “Company”, “we”, “us”, “our”) in connection with the solicitation of proxies by the Board of Directors of Neogen (the “Board”) for use at the 2023 Annual Meeting of Shareholders (the “Annual Meeting”) of Neogen Corporation to be held on Thursday, October 25, 2023, at 10:00 a.m., Eastern Time, and at any adjournment of the meeting. The Annual Meeting will be held virtually and can be accessed online at www.virtualshareholdermeeting.com/NEOG2023.
Similar to recent years, our 2023 Annual Meeting is being held on a virtual-only basis with no physical location. Our goal for the Annual Meeting is to enable the broadest number of shareholders to participate in the meeting, while providing substantially the same access and exchange with the Board and management as an in-person meeting. We believe that we are observing best practices for virtual shareholder meetings, including providing a support line for technical assistance and addressing as many shareholder questions as time allows.
Our principal executive offices are located at 620 Lesher Place, Lansing, Michigan 48912. Our telephone number is 517-372-9200. These proxy materials were first furnished to shareholders on September 18, 2023.
There are five proposals scheduled to be voted on at the Annual Meeting:
Revocation of Proxies; Changing of Voting Instructions
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its exercise by the filing of a written notice of revocation with our Secretary, by delivering to our Secretary a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting virtually. If you are a beneficial owner of shares held in street name, you may submit new voting instructions by contacting your brokerage firm, bank or other holder of record.
Voting and Solicitation
All shares represented by a properly executed proxy will be voted unless the proxy is revoked. If a choice is specified, it will be voted in accordance with that specification. If no choice is specified, the proxy holders will vote the shares in accordance with the recommendations of the Board, stated below. With respect to any matter not set forth on the proxy card that properly comes before the Annual Meeting, the proxy holders named in the proxy card will vote as the Board recommends or, if the Board makes no recommendation, at the Board’s discretion.
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In summary, the Board recommends that you vote:
All shareholders at the close of business on August 28, 2023, the record date for the Annual Meeting, are entitled to vote at the Annual Meeting. On August 28, 2023, there were 216,310,582 shares of the Company’s common stock outstanding. For each proposal, each shareholder is entitled to one vote for each share of the Company’s common stock owned on the record date for the Annual Meeting.
If you are a shareholder of record, you may vote your shares in one of the following ways:
If your shares are registered in the name of your broker, bank or other agent, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice or proxy card and voting instructions with these proxy materials from that organization rather than directly from the Company. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided.
A broker non-vote occurs when a shareholder holds his or her stock through a broker and the broker does not vote those shares. This usually occurs because the broker has not received timely voting instructions from the shareholder and the broker does not have discretionary voting power for the particular item upon which the vote is taken. Under applicable law and the listing rules of the Nasdaq Global Select Market (“Nasdaq”), brokers have the discretion to vote on routine matters, such as the ratification of the appointment of the Company’s independent auditors. We believe the other proposals may not be considered routine matters under applicable Nasdaq rules.
It is important that you instruct your broker how to vote shares held by you in street name using the voting instruction form provided by your broker. Your broker should vote your shares as you direct if you provide timely instructions on how to vote by following the instructions provided to you by your broker.
Participation in the Annual Meeting
To participate in the Annual Meeting, you will need to provide the 16-digit control number included on your proxy card or that you received from your broker, bank, or other agent. If you do wish to participate in the Annual Meeting, please log on to www.virtualshareholdermeeting.com/NEOG2023 at least 15 minutes prior to the start of the Annual Meeting to provide time to register, download the required software, if necessary, and test your Internet connectivity. The webcast replay will be available at www.virtualshareholdermeeting.com/NEOG2023 until the 2024 Annual Meeting of Shareholders. If you access the meeting but do not enter your control number, you will be able to listen to the proceedings, but you will not be able to vote or otherwise participate.
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We are committed to ensuring that our shareholders have substantially the same opportunities to participate in the virtual Annual Meeting as they would at an in-person meeting. Each year at the Annual Meeting, we hold a question-and-answer session following the formal business portion of the meeting, during which shareholders may submit questions to us. We anticipate having such a question-and-answer session at the 2023 Annual Meeting. You can submit a question beginning 15 minutes prior to the start of the Annual Meeting and up until the time we indicate that the question-and-answer session is concluded. However, we encourage you to submit your questions before or during the formal business portion of the meeting and our prepared statements, in advance of the question-and-answer session, in order to ensure that there is adequate time to address questions in an orderly manner.
In order to submit a question at the Annual Meeting, you will need your 16-digit control number that is printed on the proxy card that you received in the mail or that you received from your broker, bank, or other agent. Once you have logged on to the webcast at www.virtualshareholdermeeting.com/NEOG2023, type your question in the “ask a question” box and click “submit.” You may log in 15 minutes before the start of the Annual Meeting and submit questions online. We encourage you to submit any question that is relevant to the business of the meeting. Questions will be read and addressed during the Annual Meeting, as time permits.
We have provided a toll-free technical support “help line” that can be accessed by any shareholder who is having challenges logging into or participating in the virtual Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support line number that will be posted on the virtual Annual Meeting login page.
Quorum; Required Vote
The vote required, including the effect of broker non-votes and abstentions for each of the matters presented for shareholder vote, is set forth below.
A majority of the outstanding shares entitled to vote, in attendance virtually or by proxy, will constitute a quorum at the Annual Meeting. A plurality of the votes cast is required to elect directors to the Board. This means that the nominees who receive the most votes will be elected to the open Board positions. In counting votes on the election of the Board, abstentions, broker non-votes and, to the extent applicable, a security holder’s withholding of authority to vote for a nominee in an election of directors, and other shares not voted will be counted as not cast.
The proposals to approve, by a non-binding vote, the compensation of our named executive officers, to approve the Neogen Corporation 2023 Omnibus Incentive Plan, and to ratify the appointment of BDO USA P.A. as the independent registered public accounting firm for the 2024 fiscal year will be approved if a majority of the votes cast at the meeting are voted in favor of such proposal. With respect to approval, on an advisory basis, of the frequency of future executive compensation votes, the Board will consider that the choice (annually, bi-annually or every three years) that receives the most votes expresses the preference of the shareholders. Abstentions, broker non-votes and other shares not voted will be counted as not cast.
As to the election of directors to the Board, the three Class III nominees who receive the greatest number of votes will be elected to a three-year term. In accordance with the Company’s Corporate Governance Guidelines, in an uncontested election (i.e., an election where the only nominees are those recommended by the Board), any nominee for the Board who receives a greater number of votes “withheld” from his or her election than votes “for” such election (a “Majority Withheld Vote”) will promptly tender his or her resignation to the Board for consideration in accordance with the procedures described below, following certification of the shareholder vote. The Governance Committee of the Board (the “Governance Committee”) will promptly consider the resignation offer and recommend to the Board action with respect to the tendered resignation, which may include accepting the resignation, rejecting the resignation but addressing the underlying cause of the “withheld” votes, determining not to re-nominate the director in the future, or any other action the Governance Committee deems to be appropriate and in the best interests of the Company.
In considering what action to recommend with respect to the tendered resignation, the Governance Committee will take into account all factors deemed relevant by members of the Governance Committee including, without limitation, any stated reasons why shareholders “withheld” votes for election from such director, the length of service and qualifications of the director whose resignation has been tendered, the overall composition of the Board, the director’s contributions to the Company, the mix of skills and backgrounds on the Board, whether accepting the tendered resignation would cause the Company to fail to meet any applicable requirements of the Securities and
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Exchange Commission (the “SEC”) or Nasdaq, and the Company’s Corporate Governance Guidelines. The Board will act on the Governance Committee’s recommendation no later than 90 days following certification of the shareholder vote. In considering the Governance Committee’s recommendation, the Board will consider the factors and possible actions considered by the Governance Committee and such additional information, factors and possible actions as the Board believes to be relevant or appropriate. To the extent that one or more directors’ resignations are accepted by the Board, the Governance Committee will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board.
Solicitation of Proxies
The Board is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by the Company. The Company will reimburse brokers, banks or other agents for reasonable expenses that they incur in sending the proxy materials to you if a broker, bank, or other agent holds shares of our common stock on your behalf. In addition, the Company’s directors and employees may also solicit proxies in person, online, by telephone, or by other means of communication. Such directors and employees will not be paid any additional compensation for soliciting proxies.
Information regarding the 3M Food Safety Combination
On September 1, 2022, Neogen, 3M Company (“3M”) and Neogen Food Safety Corporation (“Neogen Food Safety Corporation”), a newly formed, wholly-owned subsidiary of 3M created to carve out 3M’s Food Safety Division (“3M FSD”, “FSD”), closed on the transaction combining 3M’s FSD with Neogen in a Reverse Morris Trust transaction and Neogen Food Safety Corporation became a wholly owned subsidiary of Neogen (the “FSD Transaction”). Following the FSD Transaction, pre-merger Neogen Food Safety Corporation shareholders owned, in the aggregate, approximately 50.1% of the issued and outstanding shares of Neogen common stock, and pre-merger Neogen shareholders owned, in the aggregate, approximately 49.9% of the issued and outstanding shares of Neogen common stock.
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PROPOSALS FOR SHAREHOLDER ACTION
PROPOSAL 1—ELECTION OF DIRECTORS
The Company’s current Bylaws, as amended at the special meeting of shareholders held on August 17, 2022, provide that the Company will have at least five and no more than eleven directors, with the exact number to be determined by the Board. The Board is currently comprised of ten directors. The directors are classified into three classes to serve for the terms set forth next to their names or until their successors have been duly qualified and elected. In September 2022, the Neogen Board increased the size of the Board from eight to ten directors and appointed Jeffrey D. Capello to the Board to serve as a Class I director and Aashima Gupta to the Board to serve as a Class III director. In April 2023, Darci Vetter tendered her resignation from the Board, effective the day after the 2023 annual meeting of Neogen shareholders. Ms. Vetter is resigning due to responsibilities associated with a new employment arrangement.
Unless otherwise instructed, proxy holders will vote the proxies received by them for the election of the nominees named below. Each of the three nominees for director this year is currently a director of the Company. If any nominee becomes unavailable for any reason, it is intended that the proxies will be voted for a substitute nominee designated by the Board. The Board has no reason to believe that the nominees named will be unable to serve if elected. Any vacancy occurring on the Board for any reason may be filled by vote of a majority of the directors then in office for the full term of the class in which the vacancy occurs.
Nominees |
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Class III: |
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Aashima Gupta |
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2026 |
Raphael A. Rodriguez |
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2026 |
Catherine E. Woteki, Ph.D. |
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2026 |
Directors continuing in office |
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Expiration of |
Class I: |
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James C. Borel |
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2024 |
Jeffrey D. Capello |
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2024 |
Ronald D. Green, Ph.D. |
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2024 |
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Class II: |
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John E. Adent |
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2025 |
William T. Boehm, Ph.D. |
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2025 |
James P. Tobin |
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2025 |
Ms. Vetter is resigning from the Board, effective October 26, 2023, due to responsibilities associated with a new employment arrangement. Ms. Vetter’s resignation is not due to any disagreements regarding the Company’s operations, policies or practices.
The following table sets forth the names, ages as of September 18, 2023, membership on Board committees and certain other information for each of the members of our Board with terms expiring at the Annual Meeting (who are
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also nominees for election as a director at the Annual Meeting) and for each of the continuing members of our Board:
Name of Director |
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Position |
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Director |
John. E Adent |
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55 |
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CEO, Director |
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2018 |
William T. Boehm, Ph.D. (1) (3*) |
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76 |
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Director |
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2011 |
James C. Borel (3) (4) |
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67 |
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Board Chair |
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2016 |
Jeffrey D. Capello (1) (3) |
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58 |
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Director |
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2022 |
Ronald D. Green, Ph.D. (2*) (4) |
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62 |
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Director |
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2014 |
Aashima Gupta (2) (4) |
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52 |
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Director |
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2022 |
Raphael A. Rodriguez (1) (2) |
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55 |
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Director |
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2020 |
James P. Tobin (3) (4*) |
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67 |
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Director |
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2016 |
Darci L. Vetter (*1) (4) |
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49 |
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Director |
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2017 |
Catherine E. Woteki, Ph.D. (1) (2) |
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75 |
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Director |
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2020 |
* - Denotes Committee Chair
The table below provides information related to the composition of our Board members and nominees. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
Board Diversity Matrix (As of September 18, 2023)
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Total Number of Directors |
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10 |
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Part I: |
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Gender Identity |
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Female |
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Male |
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Non-Binary |
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Did Not Disclose Gender |
Directors |
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3 |
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7 |
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Part II: |
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Demographic Background |
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African American or Black |
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Alaskan Native or Native American |
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Asian |
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Hispanic or Latinx |
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1 |
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Native Hawaiian or Pacific Islander |
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White |
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6 |
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Two or More races or Ethnicities |
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LGBTQ+ |
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Did Not Disclose Demographic Background |
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The following is a brief summary of the business experience for at least the past five years of each of the nominees and for the other current members of the Board.
Nominees for the Board of Directors:
Aashima Gupta serves as the Global Director for Healthcare Provider Solutions at Google Cloud. She joined Google in 2017. Ms. Gupta is a strategic global leader with over 25 years of experience working at the intersection of health and technology, with extensive experience in complex, large-scale enterprise environments. Prior to joining Google, Ms. Gupta worked in technology development across a number of organizations, including NIIT, Fidelity Investments, J.P. Morgan Chase, Apigee and Kaiser Permanente. Ms. Gupta serves on the board of directors for Molnlycke and the Board of Advisors for GRAIL and HIMSS NA. In 2019, Ms. Gupta was recognized as one of the Most Influential Women in Healthcare by HIMSS and received the Top 100 FEMTech Award and Champion of Health Award. Ms. Gupta was selected by 3M to be appointed to the Board and to be a nominee for Class III director at the Annual Meeting in connection with, and pursuant to, the terms of the FSD Transaction. Ms. Gupta brings substantial business and technical acumen to the Board.
Raphael A. (Ralph) Rodriguez has been President & Chief Product Officer and a member of the board of directors of Daon, Inc., an international biometric and identity assurance software company, since June 2022. Prior to this role, he was executive-in-residence from October 2019 through June 2022 at Summit Partners, a global private equity firm based in Boston. Mr. Rodriguez worked with Summit’s technology team to identify new investment opportunities within growth-stage technology companies. Prior to that, he was a research scientist at Facebook from March 2018 through October 2019, where he led Applied Identity and Intelligence. He was the co-founder, in 2015, and CTO of Confirm.io, an ID authentication company, which Facebook acquired in March 2018. Prior to Confirm.io, Mr. Rodriguez was an executive with a number of notable technology companies, and is the founder of several technology companies. He is the longest-serving ASP Fellow at the Massachusetts Institute of Technology, and currently also serves on the board of Strategic Cyber Ventures. Mr. Rodriguez previously served on the board of Corvium. Mr. Rodriguez is a U.S. Army intelligence veteran of the Persian Gulf War, a life member of the Veterans of Foreign Wars, and a holder of 23 U.S. patents and international patent applications. His extensive technological knowledge and experience bring significant value to the Board.
Dr. Catherine Woteki, Ph.D. holds positions as Professor of Food Science and Human Nutrition at Iowa State University and Visiting Distinguished Institute Professor in the Biocomplexity Institute of the University of Virginia. She served as Chief Scientist and Under Secretary for USDA’s Research, Education, and Economics (REE) mission area from 2010 to 2016. Prior to joining USDA, Dr. Woteki served as Global Director of Scientific and Regulatory Affairs for Mars, Incorporated, where she managed the company’s regulatory policy on matters of health, nutrition, and food safety. From 2002 to 2005, she was Dean of Agriculture and also head of the Agricultural Experiment Station at Iowa State University. Dr. Woteki served as the first Under Secretary for Food Safety at the USDA from 1997 to 2001, where she oversaw the safety of meat, poultry and egg products. Dr. Woteki is a member of the National Academy of Medicine and a fellow of the American Association for the Advancement of Science and the American Society for Nutrition. Dr. Woteki brings experience in regulatory science and science policy to the Board.
Each nominee has consented to be listed in this proxy statement and agreed to serve as a director if elected by the shareholders. If any nominee becomes unable or unwilling to serve between the date of this proxy statement and the annual meeting, which we do not anticipate, then the Board may designate a new nominee. In that case, the persons named as proxies in the attached proxy card will vote for that substitute nominee (unless the proxies were previously instructed to withhold votes for the nominee who has become unable or unwilling to serve). Alternatively, the Board may reduce the size of the Board.
The Board of Directors recommends a vote “FOR” the above nominees.
Other current members of the Board:
James C. (Jim) Borel brings over 40 years of experience in the agriculture and food industry, with extensive international experience including three assignments abroad and responsibilities extending beyond the United States for over 25 years. He retired in 2016 from DuPont, where he was formerly Executive Vice President and a member of the company’s Office of the Chief Executive, with responsibility for the agriculture and food ingredients businesses of DuPont, as well as the corporate functions of Sustainability and Government Affairs. Mr. Borel is a member of multiple boards of directors and is a member of the board of trustees for University of the Delaware and the Alpha Gamma Rho Fraternity. Mr. Borel is a National Association of Corporate Directors Board Leadership
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Fellow, demonstrating his commitment to the highest standards of boardroom excellence. His knowledge of the agricultural and food industries, and his international experience bring significant value to the Board.
Jeffrey D. Capello is a senior finance executive with over 30 years of experience helping companies create significant value for their shareholders. Mr. Capello has been the Managing Member at Monomoy Advisors, a financial advisory firm that provides counsel to senior leadership on shareholder value creation strategies. Prior to his role at Monomoy Advisors, Mr. Capello served as the Chief Financial Officer of publicly held and private equity-backed companies, including PerkinElmer, Boston Scientific, Ortho Clinical Diagnostic, Beacon Health Options and Biogen. Mr. Capello currently serves as a Board of Director and is the Audit Committee Chair at Agios Pharmaceuticals. Mr. Capello also served on the board of directors for several early-stage publicly held biotechnology companies as Audit Committee Chair, including Sirtris, OvaScience, and Flex Pharma. Mr. Capello was selected by 3M to be appointed to the Board in connection with and pursuant to the terms of the FSD Transaction. Mr. Capello’s business and financial experience provides significant value to the Board.
Dr. Ronald D. Green, Ph.D. was appointed Chancellor of the University of Nebraska-Lincoln since April 2016. Dr. Green served in that role until his retirement in June 2023. Prior to that appointment, he was the Harlan Vice Chancellor of the Institute of Agriculture and Natural Resources and Vice President for Agriculture and Natural Resources of the University of Nebraska system since 2010. Dr. Green served as senior global director of technical services at Pfizer Animal Health’s animal genomics business from 2008 to 2010. He was on faculty at Texas Tech University and Colorado State, and was the national program leader for animal production research for the USDA’s Agricultural Research Service and executive secretary of the White House’s interagency working group on animal genomics within the National Science and Technology Council. In that role, he was a leader in the international bovine, porcine and ovine genome sequencing projects. Dr. Green is a past president of the American Society of Animal Science (“ASAS”) and the National Block and Bridle Club, and has served in a number of leadership positions for the U.S. Beef Improvement Federation, National Cattlemen’s Beef Association, National Pork Board, Federated Animal Science Societies and the National Research Council. Dr. Green was named a fellow of ASAS in 2014. Dr. Green’s experience in genomics and animal production research brings great value and insight to the Board.
Darci L. Vetter is Senior Vice President and Head of Global Public Policy at PepsiCo, which she joined in April 2023. Ms. Vetter was Global Head, Policy and Government Relations, at The Nature Conservancy, a global environmental organization, since 2021. Prior to this role, she served as General Manager and Vice Chair for Food, Agriculture and Trade at Edelman, a global communications firm from 2019 to 2021. She served as an international trade consultant and diplomat in residence at the University of Nebraska-Lincoln from 2018 to 2019. In July 2014, she was appointed as the Chief Agricultural Negotiator for the U.S. Trade Representative; she held the position until January 2017. From 2010 to 2014, she served as Deputy Under Secretary of Agriculture for Farm and Foreign Agricultural Services and, from 2007 to 2010, she was an International Trade Advisor on the U.S. Senate Committee on Finance. Prior to working in the Senate, Ms. Vetter held numerous roles at the Office of the United States Trade Representative, including Director for Agricultural Affairs from 2005 to 2007. Her experience in international trade and agriculture and sustainability brought significant value to the Board. As noted above, Ms. Vetter is resigning from the Board effective as of October 26, 2023.
John E. Adent joined the Company as Chief Executive Officer ("CEO") in July 2017 and was named President on September 22, 2017. Mr. Adent brings extensive experience in international food and animal safety to the Board, previously serving as President and Chief Executive Officer of Animal Health International, Inc., formerly known as Lextron, Inc. Mr. Adent began his career with management responsibilities for Ralston Purina Company, developing animal feed manufacturing and sales operations in China and the Philippines, continuing his management role in the European division in Spain and Hungary when Ralston Purina spun off that business into an independent public company named Agribrands, Inc.
8
Dr. William T. Boehm, Ph.D. is a retired Senior Vice President of The Kroger Co. and former Senior Economist for the President’s Council of Economic Advisors under Presidents Carter and Reagan. Dr. Boehm joined The Kroger Co. in 1981 as Director of Economic Research and held positions of increasing responsibility until his retirement from the company in 2008. He has previously served on the board of Greatwide Logistics from 2009 to 2015 and Curious Plot, and currently serves on the boards of O'Snap Pickling Company and the Educational Foundation of AGR. He remains active in professional associations and academia. Dr. Boehm’s wealth of experience in agriculture and virtually all aspects of the food service industry make him well qualified to serve on the Board.
James P. Tobin began his career in 1983 and spent more than 31 years with Monsanto, holding various leadership roles across the company. Prior to his retirement in 2014, he held the role of Vice President, Industry Affairs. Mr. Tobin brings an extensive knowledge of the agricultural industry and business acumen to the Board, previously working to advance agriculture as Chairman of the American Seed Trade Organization and supporting youth in agriculture through his work with the Missouri and National 4-H Foundations. Mr. Tobin formerly sat on the board of the U.S. Grain Council and served as chairman of the FarmHouse Fraternity Foundation. Mr. Tobin is currently a member of the Farm Foundation Roundtable, Governor for Iowa State University Foundation and serves as a managing director of the Yield Lab II.
9
PROPOSAL 2: TO APPROVE, BY NON-BINDING VOTE, THE COMPENSATION OF NAMED EXECUTIVE OFFICERS
The “Compensation Discussion and Analysis” section of this Proxy Statement describes, among other things, the Company’s executive compensation policies and practices. Securities laws require that shareholders be given the opportunity to provide, on an advisory basis, approval of the compensation of Company executives, as disclosed in this Proxy Statement and, therefore, we are providing this advisory proposal as required by Section 14A of the Exchange Act. Under the legislation that requires this vote, the shareholder vote is neither binding on the Board nor the Company and may not be construed as overruling any decision made by the Board or the Company or as creating or implying any change in the fiduciary duties owed by the Board. However, the Board values the views of shareholders and intends to take the outcome of this annual shareholder advisory vote into consideration when making future executive compensation decisions.
Therefore, at the Annual Meeting, shareholders will be given the opportunity to vote, on an advisory (non-binding) basis, to approve the compensation of the named executive officers as disclosed in this Proxy Statement under “Compensation Discussion and Analysis” and “Summary Compensation Table.” This vote proposal is commonly known as a “say-on-pay” proposal and gives shareholders the opportunity to endorse or not endorse the executive pay program. This vote is not intended to address any specific item of executive compensation, but rather the overall compensation of the named executive officers and the policies and practices described in this Proxy Statement. Shareholders are encouraged to read the full details of the Company’s executive compensation program, including the primary objectives in setting executive pay, under “Compensation Objectives,” as described in this Proxy Statement.
In a non-binding advisory vote on the frequency of the say-on-pay proposal held at our 2017 Annual Meeting of Shareholders, shareholders voted in favor of holding say-on-pay votes annually. In light of this result and other factors considered by the Board, the Board determined that the Company would hold advisory say-on-pay votes on an annual basis until the next required advisory vote on such frequency, which is proposal 3 in this Proxy Statement, to be voted on at the Annual Meeting.
The Company evaluates the compensation of its executives at least once each year to assess whether compensation policies and programs are achieving their primary objectives. Based on its most recent evaluation, the Board believes the Company’s executive compensation programs achieve these objectives, including aligning the interests of management with those of shareholders, and are therefore worthy of shareholder support. In determining how to vote on this proposal, shareholders should consider the following:
For these reasons, the Board recommends that you vote “FOR” the adoption of the following resolution:
“RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in the Company’s Proxy Statement for its 2023 Annual Meeting of Shareholders.”
Vote Required
The proposal to approve, on an advisory basis, the compensation of the Company’s named executive officers requires the affirmative vote of a majority of the votes cast on the proposal.
10
PROPOSAL 3—TO APPROVE, ON AN ADVISORY BASIS, THE FREQUENCY OF FUTURE SHAREHOLDER ADVISORY VOTES ON EXECUTIVE COMPENSATION
Securities laws require that at least once every six years, shareholders be given the opportunity to express their preference for whether the shareholder advisory vote on executive compensation should take place every year, every two years, or every three years and, therefore, we are providing this advisory proposal as required by Section 14A of the Exchange Act. Under applicable law, the shareholder vote is not binding on the Board or the Company and may not be construed as overruling any decision made by the Board or the Company or as creating or implying any change in the fiduciary duties owed by the Board. However, the Board values the views of shareholders and intends to take the outcome of this shareholder advisory vote into consideration when determining how often the shareholder advisory vote on executive compensation will take place.
The Company currently conducts advisory votes on the compensation of executives to shareholders every year, and, after careful consideration, the Board continues to believe that conducting the shareholder advisory vote on executive compensation every year is appropriate for the Company and its shareholders. In reaching its recommendation, the Board considered that an annual advisory vote allows the most frequent input from shareholders. However, you will be given the option to specify a preference that the advisory vote on executive compensation take place every one, two or three years. For purposes of determining the preference of shareholders on this matter, the Company will consider the choice (either every one, two or three years) that received the most votes as the preference of shareholders.
After the Annual Meeting, the Company will disclose both the results of this vote and the Board’s decision regarding how frequently the advisory vote on executive compensation will take place in the future. In making such decision, the Board is not required to abide by the outcome of this advisory vote. However, the Board intends to consider the decision made by shareholders on this matter when determining the frequency of future advisory votes on executive compensation.
Before voting on this issue, you are encouraged to read the full details of the Company’s executive compensation program, including the primary objectives in setting executive pay, under “Compensation Objectives,” as described in this Proxy Statement.
This shareholder advisory vote on the frequency of future advisory votes on executive compensation will be held at least once every six years.
The Board recommends that you vote for a frequency of “Every 1 Year” for future shareholder advisory votes on executive compensation.
11
PROPOSAL 4—TO APPROVE THE ESTABLISHMENT OF THE NEOGEN CORPORATION 2023 OMNIBUS INCENTIVE PLAN
The Company is asking shareholders to approve the Neogen Corporation 2023 Omnibus Incentive Plan (the “2023 Plan”). On July 19, 2023, the Board and Compensation Committee approved the 2023 Plan, subject to approval of the 2023 Plan by the Company's shareholders, and directed that the 2023 Plan be submitted to shareholders for approval at the Annual Meeting. For awards granted after fiscal 2023 year-end and prior to the date that the 2023 Plan is enacted on October 25, 2023, the shares will be subtracted from the 2023 Plan share reserve.
As discussed in this Proxy Statement, grants to employees of stock incentives are an important part of the Company’s compensation program, providing a basis for long-term incentive compensation and helping to align the interests of the Company’s shareholders with those of the Company’s directors and employees. Accordingly, the Board has adopted the 2023 Plan, and in accordance with the rules of the Nasdaq Global Select Market and the requirements of the Internal Revenue Code, the Company is seeking the approval of the shareholders for the adoption of the 2023 Plan. Shareholder approval of the 2023 Plan will permit the Company to continue to grant equity compensation awards to its officers, employees and consultants in furtherance of this philosophy.
The 2018 Plan authorized the issuance of 4,500,000 shares. As a result of the 2 for 1 stock split effected in June 2021, there were effectively 9,000,000 authorized shares for issuance under the 2018 Plan. As of May 31, 2023, 2,871,000 shares of common stock remain available under the 2018 Plan, which will be insufficient to make future equity awards in an amount sufficient to attract and retain our officers and employees.
Accordingly, the Board is seeking approval of the 2023 Plan to permit future equity awards to its employees, officers and consultants. If the 2023 Plan is approved by shareholders at the Annual Meeting, no further awards will be made under the 2018 Plan and all of the 20,000,000 shares will be available under the 2023 Plan, which we believe will be sufficient for annual equity awards to our officers, employees and consultants.
The Board believes there are a number of reasons to vote FOR the adoption of the 2023 Plan as summarized below.
12
Our officers and directors have an interest in this proposal due to their participation in the 2023 Plan.
As of the Record Date, the total number of shares of common stock which may be issued upon the exercise of options and restricted stock units under the 2018 Plan is 4,988,000, none of which will be affected by the adoption of the 2023 Plan. If any stock options are forfeited under the 2018 Plan, those shares will not be available for issuance as new awards under the 2023 Plan.
As of the Record Date, the Company had 216,310,582 shares of common stock outstanding.
A description of the provisions of the 2023 Plan is set forth below. This summary is qualified in its entirety by the detailed provisions in the 2023 Plan, which is attached to this proxy statement as Appendix A.
General Description of the 2023 Plan
Overview. The purposes of the 2023 Plan are (a) to provide incentives for our employees, directors and consultants by encouraging their ownership of stock and (b) to aid us (and our affiliates) in retaining such employees, directors and consultants, upon whose efforts our success and future growth depends, and to attract other such individuals.
Administration. The 2023 Plan is administered by the Compensation Committee (the “Committee), although the entire Board can administer the 2023 Plan, in whole or in part, in certain circumstances. Subject to the terms of the 2023 Plan, the Committee can select participants to receive awards, determine the types of awards and terms and conditions of awards and interpret provisions of the 2023 Plan. The Committee can delegate to a subcommittee of directors and/or officers the authority to grant or administer awards to persons who are not then reporting persons under Section 16 of the Exchange Act.
Shares of Common Stock Reserved for Issuance Under the 2023 Plan. There are 20,000,000 shares of our common stock reserved for issuance under the 2023 Plan. The closing price of our common stock on the Nasdaq Global Select Market on the Record Date was $22.91. Any shares that are subject to an option or stock appreciation right will be counted against the share limit as one (1) share for every one (1) share granted. Any shares that are subject to awards other than options or stock appreciation rights will be counted against the share limit as two and five tenths (2.5) shares for every one (1) share granted.
13
Eligibility and Share Limitations. Awards can be made under the 2023 Plan to our employees, directors and consultants as determined by the Committee to be in our best interests, provided that only employees will be eligible to receive incentive stock options. The maximum number of common shares subject to options, stock appreciation rights or other share awards that can be awarded under the 2023 Plan to any person is 1,000,000 per the Company’s fiscal year. Further, the aggregate fair market value of all awards granted to a non-employee director during any fiscal year will not exceed $500,000.
Vesting. The 2023 Plan requires that all awards have a minimum vesting period of one year from the grant date, provided, that such awards with respect to 5% of the total shares authorized to be issued under the Plan can be granted under the 2023 Plan with a vesting period of less than one year.
Amendment or Termination of the Plan. Unless terminated earlier, the 2023 Plan will terminate on the tenth (10th) anniversary of the date the 2023 Plan is approved by the Company’s shareholders. The Board can terminate or amend the 2023 Plan at any time and for any reason, in its discretion. However, no amendment can adversely impair the rights of grantees with respect to outstanding awards. Amendments will be submitted for shareholder approval to the extent required by the Code or other applicable laws, rules or regulations.
Types of Awards Available for Grant under the 2023 Plan
Options. The 2023 Plan permits the granting of options to purchase shares of common stock intended to qualify as incentive stock options under the Code and also options to purchase common shares that do not qualify as incentive stock options (“non-qualified options”). The exercise price of each option cannot be less than 100% of the fair market value of the common shares on the date of grant. In the case of certain 10% shareholders who receive incentive options, the exercise price cannot be less than 110% of the fair market value of the common shares on the date of grant. Options granted under the 2023 Plan generally cannot be sold, transferred, pledged or assigned other than by will or under applicable laws of descent and distribution.
The term of each option is fixed by the Committee and cannot exceed ten (10) years from the date of grant. The Committee determines at what time or times each option may be exercised. Except as otherwise set forth in an award agreement, options generally are forfeited upon a termination of a participant’s employment or service for cause, and a participant generally will have up to (i) ninety (90) days to exercise any vested option for a termination for any reason other than cause, death or disability, and (ii) one (1) year to exercise any option for a termination due to death or disability.
Options can be made exercisable in installments. In general, an optionee can pay the exercise price of an option by cash or certified check, and the Committee is authorized to permit the exercise price to be paid by net share settlement, broker assisted cashless exercise, tendering common shares already owned or any other form permitted by the Committee and applicable laws, rules and regulations. The Committee can impose blackout periods on the exercise of any option to the extent required by applicable laws.
Restricted Stock. The 2023 Plan permits the granting of restricted stock. Restricted stock awards consist of shares of common stock granted subject to forfeiture if specified holding periods and/or performance targets are not met. The Committee determines the holding periods and/or performance targets. Prior to the end of the restricted period, restricted stock cannot be sold, assigned, pledged or otherwise disposed of or hypothecated by participants.
Performance Awards. Performance units and performance shares also can be granted under the 2023 Plan. Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the Committee are achieved. The Committee can establish performance goals in its discretion, which, depending on the extent to which they are met, will determine the degree of granting, vesting and/or payout value of performance units and performance shares. While the performance units and performance shares remain unvested, a participant cannot sell, assign, transfer, pledge or otherwise dispose of the securities, subject to specified limitations.
14
Other Awards. The Committee also can award under the 2023 Plan:
Section 162(m) of the Code. Section 162(m) of the Code limits publicly-held companies to an annual deduction for U.S. federal income tax purposes of $1,000,000 for compensation paid to its chief executive officer and chief financial officer and the three highest compensated executive officers (other than the chief executive officer and chief financial officer) determined at the end of each year (the “covered employees”). Once an individual is designated as a covered employee, that individual will remain a covered employee for all future years.
Dividends or Dividend Equivalents for Performance Awards. Any dividends and/or dividend equivalents credited in connection with an award that is not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying portion of the award to which such dividends and/or dividend equivalents relate and will not be paid until that underlying portion of the award vests.
Effect of Change in Control. The 2023 Plan generally provides for double-trigger vesting upon a “change in control,” as defined in the Plan. If the outstanding awards are assumed or substituted by the acquiring entity or successor, the vesting of such awards will be accelerated (and, as practicable, accelerated exercisability and continued or deemed determination regarding achievement of any performance criteria) upon involuntary termination of employment without “cause,” as defined in the 2023 Plan, or voluntary termination of employment by the optionee for good reason, within one (1) year after the Change in Control.
Forfeiture Provisions. The Committee will provide in each award agreement, the circumstances in which awards will be paid or forfeited in the event a participant ceases to be employed by us, or to provide services to us, prior to the end of a performance period, period of restriction or the exercise, vesting or settlement of such award.
Adjustments for Stock Dividends and Similar Events. The Company will make appropriate adjustments in outstanding awards and the number of shares of common stock available for issuance under the 2023 Plan, including the individual limitations on awards, to reflect dividends, splits, extraordinary cash dividends and other similar events.
Prohibition against Repricing. Neither the Compensation Committee nor the Board may effect the repricing of any outstanding options or SARs, including without limitation a repricing by (i) the cancellation of any outstanding options or SARs under the 2023 Plan and the grant in substitution therefor of new options, SARs or any other awards under the 2023 Plan covering the same or different amount of shares, or (ii) the cancellation of any outstanding options or SARs with respect to which the option price or exercise price of the SAR is above fair market value in exchange for a cash payment.
U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2023 Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular circumstances.
15
Incentive Stock Options. The grant of an incentive stock option will not be a taxable event for the participant or for the employer. A participant will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of common shares received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain if the participant holds the common shares for at least two years after the date of grant and for one year after the date of exercise (the “holding period requirement”). The employer will not be entitled to any compensation expense deduction with respect to the exercise of an incentive stock option, except as discussed below.
For the exercise of an option to qualify for the foregoing tax treatment, the grant must be made by the employee’s employer or a parent or subsidiary of the employer. The employee must remain employed from the date the option is granted through a date within three months before the date of exercise of the option. If a participant sells or otherwise disposes of the common shares acquired without satisfying the holding period requirement (known as a “disqualifying disposition”), the participant will recognize ordinary income upon the disposition of the common shares in an amount generally equal to the excess of the fair market value of the common shares at the time the option was exercised over the option exercise price (but not in excess of the gain realized on the sale). The balance of the realized gain, if any, will be capital gain. The employer generally will be allowed a compensation expense deduction to the extent that the participant recognizes ordinary income.
Non-Qualified Options. The grant of an option will not be a taxable event for the participant or for the Company. Upon exercising a non-qualified option, a participant will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common shares on the date of exercise. Upon a subsequent sale or exchange of common shares acquired pursuant to the exercise of a non-qualified option, the participant will have taxable capital gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the common shares (generally, the amount paid for the common shares plus the amount treated as ordinary income at the time the option was exercised). The employer generally will be entitled to a compensation expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.
Restricted Stock. A participant who is awarded restricted stock will not recognize any taxable income for U.S. federal income tax purposes in the year of the award, provided that the shares are subject to restrictions (that is, the restricted shares are nontransferable and subject to a substantial risk of forfeiture). However, the participant may elect under Section 83(b) of the Code to recognize compensation income (which is ordinary income) in the year of the award in an amount equal to the fair market value of the common shares on the date of the award (less the purchase price, if any), determined without regard to the restrictions. If the participant does not make such a Section 83(b) election, the fair market value of the common shares on the date the restrictions lapse (less the purchase price, if any) will be treated as compensation income to the participant and will be taxable in the year the restrictions lapse and dividends or distributions that are paid while the common shares are subject to restrictions will be subject to withholding taxes. The employer generally will be entitled to a compensation expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.
Restricted Stock Units. There are no immediate tax consequences of receiving or vesting in an award of restricted stock units under the 2023 Plan; however, restricted stock units are subject to the Federal Insurance Contribution Act tax upon vesting (based on the fair market value of the common shares on the vesting date). A participant who is awarded restricted stock units will recognize ordinary income upon receiving shares of common stock or cash under the award in an amount equal to the fair market value of the common shares at the time of delivery or the amount of cash. The employer generally will be entitled to a compensation expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.
Performance Shares, Performance Units and Other Stock Unit Awards. A participant generally will recognize no income upon the receipt of a performance share or performance unit. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of settlement in an amount equal to the cash received and/or the fair market value of any substantially vested common shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above under “Restricted Stock.” The employer generally should be entitled to a deduction equal to the
16
amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
Stock Appreciation Rights. There are no immediate tax consequences of receiving an award of stock appreciation rights under the 2023 Plan. Upon exercising a stock appreciation right, a participant will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common shares on the date of exercise. The employer generally will be entitled to a compensation expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.
Dividend or Dividend Equivalents. A participant will recognize taxable income, subject to withholding of employment tax, upon receipt of a dividend equivalent in cash or in shares of stock. Similarly, a participant who receives restricted stock, and does not make an election under Section 83(b) of the Code with respect to the stock, will recognize taxable ordinary income, subject to withholding of employment tax, upon receipt of dividends on the stock. If the participant made a Section 83(b) election, the dividends will be taxable to the participant as dividend income.
Unrestricted Stock. Participants who are awarded unrestricted stock will be required to recognize ordinary income in an amount equal to the fair market value of the common shares on the date of the award, reduced by the amount, if any, paid for such common shares. The employer generally will be entitled to a compensation expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.
Withholding. To the extent required by law, and except as provided otherwise by the Committee, we will utilize the net share method of settlement or withhold from any amount paid in settlement of an award, the amount of withholding and other taxes due or take other action as we deem advisable to enable ourselves to satisfy withholding and tax obligations related to any awards.
New Plan Benefits
Awards under the 2023 Plan will be made at the discretion of the Committee. Accordingly, we cannot currently determine the amount of awards that will be made under the 2023 Plan. We anticipate that the Committee will utilize the 2023 Plan to continue to grant long-term equity incentive compensation to employees similar to the awards described in this proxy statement.
Registration with SEC
The Company intends to file a registration statement with the SEC pursuant to the Securities Act of 1933, as amended, covering the offering of the stock under the 2023 Plan.
Equity Compensation Plan Information
The following table shows the number of shares of common stock issuable upon the exercise of outstanding stock options and RSUs, the weighted average exercise price of outstanding stock options and RSUs, and the number of shares of common stock remaining available for future issuance, excluding shares of common stock issuable upon exercise of outstanding stock options or RSUs, in each case as of May 31, 2023.
|
|
Number of Common Securities to be Issued upon Exercise of Outstanding Options and RSUs |
|
|
Weighted Average Exercise Price of Outstanding Options and RSUs |
|
|
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans |
|
|||
Equity compensation plans approved by security holders |
|
|
4,988,000 |
|
|
$ |
24.60 |
|
|
|
2,871,000 |
|
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
4,988,000 |
|
|
$ |
24.60 |
|
|
|
2,871,000 |
|
The Board recommends that you vote “FOR” the approval of the establishment of the Neogen Corporation 2023 Omnibus Incentive Plan.
17
PROPOSAL 5—RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s Audit Committee (“Audit Committee”) has appointed BDO USA P.A. (“BDO”) to serve as the independent registered public accounting firm for the Company for the fiscal year ending May 31, 2024. While not required, the Company is submitting the appointment to the shareholders for their ratification as a matter of good corporate practice. The affirmative vote of a majority of the votes cast at the Annual Meeting on the proposal is required for ratification. The Board recommends that shareholders vote “FOR” ratification of the appointment of BDO as the Company’s independent registered public accounting firm for fiscal 2024. If the appointment is not ratified, it will be considered as a recommendation that the Audit Committee consider the appointment of a different firm to serve as independent registered public accounting firm for the 2024 fiscal year. Even if the appointment is ratified, the Audit Committee can select a different independent registered public accounting firm at any time.
Relationship with BDO
BDO has acted as the Company’s independent registered public accounting firm for nine years. BDO has advised that neither the firm nor any of its members or associates has any direct financial interest or any material indirect financial interest in the Company or any of its affiliates other than as auditors. Representatives of BDO are expected to attend and be available during the Annual Meeting, with the opportunity to make a statement, and will also be available to respond to appropriate questions.
The fees billed by BDO with respect to the fiscal years ended May 31, 2023 and 2022, are as follows:
|
|
2023 |
|
|
2022 |
|
||
Audit Fees |
|
$ |
1,086,414 |
|
|
$ |
797,099 |
|
Audit-Related Fees |
|
|
— |
|
|
|
— |
|
Tax Fees (1) |
|
|
467,042 |
|
|
|
180,792 |
|
All Other Fees |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
1,553,456 |
|
|
$ |
977,891 |
|
Audit Fees include amounts billed for the annual audit of the Company’s fiscal year consolidated financial statements, the audit of internal control over financial reporting, the review of the consolidated financial statements included in the Form 10-Q, consultations concerning accounting matters associated with the annual audit, comfort letters or due diligence procedures in connection with registration statements, statutory audits and related expenses. Audit-Related Fees include due diligence in connection with acquisitions, amounts billed for general accounting consultations, audits in connection with proposed or consummated acquisitions and information systems audits and other services that are reasonably related to the annual audit. In connection with its review and evaluation of non-audit services, the Audit Committee is required to and does consider and conclude that the provision of non-audit services is compatible with maintaining the independence of BDO.
Under its charter, the Audit Committee must pre-approve all audit and non-audit services to be performed by BDO. In the event management wishes to engage BDO to perform non-audit services, a summary of the proposed engagement is prepared detailing the nature of the engagement, the reasons why BDO is the preferred provider of the services and the estimated duration and cost of the engagement. The Audit Committee reviews and evaluates recurring non-audit services and proposed fees as the need arises at their regularly scheduled committee meetings. At subsequent meetings, the Audit Committee receives updates regarding the services actually provided and management may present additional services for approval. The Audit Committee has delegated to the Chair or, in his absence, any other member of the Audit Committee, the authority to evaluate and approve projects and related fees of up to $10,000, if circumstances require approval between meetings of the Audit Committee. Any such approval is reported to the full Audit Committee at its next meeting.
18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
Principal Shareholders
The following table sets forth certain information, as of August 28, 2023, with respect to beneficial ownership of the Company's common stock by the only persons known by the Company to be the beneficial owner of more than 5% of the Company’s common stock. On August 28, 2023, there were 216,310,582 shares of the Company’s stock outstanding.
Name and Address of Beneficial Owner |
|
Number of Shares |
|
|
Percent of |
|
||
BlackRock, Inc. (1) |
|
|
24,460,988 |
|
|
|
11.3 |
% |
55 East 52nd Street |
|
|
|
|
|
|
||
New York, NY 10055 |
|
|
|
|
|
|
||
The Vanguard Group, Inc. (2) |
|
|
19,057,576 |
|
|
|
8.8 |
% |
100 Vanguard Boulevard |
|
|
|
|
|
|
||
Malvern, PA 19355 |
|
|
|
|
|
|
||
Norges Bank (The Central Bank of Norway) (3) |
|
|
18,422,570 |
|
|
|
8.5 |
% |
Bankplassen 2 P.O. Box 1179 Sentrum |
|
|
|
|
|
|
||
NO 0107 Oslo, Norway |
|
|
|
|
|
|
||
Wasatch Advisors LP (4) |
|
|
16,990,316 |
|
|
|
7.9 |
% |
505 Wakara Way |
|
|
|
|
|
|
||
Salt Lake City, UT 84108 |
|
|
|
|
|
|
||
19
Security Ownership of Directors and Executive Officers
The following table sets forth certain information about the ownership of the Company’s common stock as of August 28, 2023, held by the current directors, each nominee for director, the executive officers named in the Summary Compensation Table under “Executive Compensation” and all executive officers and directors as a group. Each of the persons listed below has sole voting and dispositive power with respect to such shares.
Name |
|
Number of Shares Owned (1) |
|
|
Right to Acquire (2) |
|
|
Total |
|
|
Percentage of |
|||
John E. Adent |
|
|
93,390 |
|
|
|
593,903 |
|
|
|
687,293 |
|
|
* |
William T. Boehm, Ph.D. |
|
|
24,509 |
|
|
|
54,490 |
|
|
|
78,999 |
|
|
* |
James C. Borel |
|
|
11,301 |
|
|
|
47,824 |
|
|
|
59,125 |
|
|
* |
Jeffrey D. Capello |
|
|
— |
|
|
|
8,210 |
|
|
|
8,210 |
|
|
* |
Ronald D. Green, Ph.D. |
|
|
7,769 |
|
|
|
52,270 |
|
|
|
60,039 |
|
|
* |
Aashima Gupta |
|
|
— |
|
|
|
8,210 |
|
|
|
8,210 |
|
|
* |
Douglas E. Jones |
|
|
2,752 |
|
|
|
94,921 |
|
|
|
97,673 |
|
|
* |
Jason W. Lilly, Ph.D. |
|
|
21,968 |
|
(3) |
|
113,831 |
|
|
|
135,799 |
|
|
* |
David H. Naemura |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
* |
Steven J. Quinlan |
|
|
36,073 |
|
(4) |
|
167,407 |
|
|
|
203,480 |
|
|
* |
Amy M. Rocklin |
|
|
856 |
|
|
|
56,160 |
|
|
|
57,016 |
|
|
* |
Raphael A. Rodriguez |
|
|
801 |
|
|
|
14,490 |
|
|
|
15,291 |
|
|
* |
James P. Tobin |
|
|
15,602 |
|
|
|
47,824 |
|
|
|
63,426 |
|
|
* |
Darci L. Vetter |
|
|
1,901 |
|
|
|
39,824 |
|
|
|
41,725 |
|
|
* |
Catherine E. Woteki, Ph.D. |
|
|
801 |
|
|
|
14,490 |
|
|
|
15,291 |
|
|
* |
Executive officers and directors as a group (15 persons) |
|
|
217,723 |
|
(5) |
|
1,313,854 |
|
|
|
1,531,577 |
|
|
* |
* Less than 1%
20
INFORMATION ABOUT THE BOARD AND CORPORATE GOVERNANCE MATTERS
The Company is managed under the direction of its Board. The Board conducts its business through meetings of the Board and its committees. The Board held 7 meetings, and there were a total of 22 committee meetings during fiscal 2023. Each director attended more than 90% of the total meetings of the Board and the committees on which he or she served in fiscal 2023. Directors of the Board are expected to attend the annual meeting of shareholders unless they have a schedule conflict or other valid reason. Each of the current Board members attended the virtual 2022 annual meeting of shareholders.
Independent Directors
A director is not considered independent unless the Board determines that he or she meets the Nasdaq independence rules and has no material relationship with the Company, either directly or indirectly, through any organization with which he or she is affiliated that has a relationship with the Company. Based on a review of the responses of the directors and nominees to questions about employment history, affiliations, family and other relationships, and on discussions with the directors and nominees, the Board has determined that each of the following currently serving directors and nominees is independent as defined in the Nasdaq independence rules: Dr. Boehm, Mr. Borel, Mr. Capello, Dr. Green, Ms. Gupta, Mr. Rodriguez, Mr. Tobin, Ms. Vetter and Dr. Woteki.
Board Committees
The Board has four committees. The current membership, number of meetings held during fiscal 2023 and the function performed by each of these committees are described below. None of the members of any of the committees is or ever has been an employee of the Company. The Board has determined that each committee member meets the independence standards for that committee within the meaning of applicable Nasdaq and SEC regulations.
Compensation Committee—Ms. Vetter (Chair), Dr. Boehm, Mr. Capello, Mr. Rodriguez and Dr. Woteki are current members of the Compensation Committee, which met six times during fiscal 2023. Following Ms. Vetter's resignation from the Board as of October 26, 2023, Dr. Woteki will serve as chair of the Compensation Committee. The purpose of the Compensation Committee is to assist the Board in discharging its overall responsibilities relating to executive compensation and the Company’s stock-based compensation plans. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the CEO and other executive officers at the beginning of each year, evaluates current year performance in light of those goals and establishes compensation levels for the upcoming year, including salary and bonus targets. The Committee also evaluates option grants and any other equity awards under the terms of the 2018 Plan and, if approved, the 2023 Plan. The Committee recommends to the Board an appropriate compensation package for outside directors. In addition, the Compensation Committee will, from time to time, recommend to the Board appropriate changes in the Company's compensation policies and programs. The Compensation Committee also annually reviews the performance of the CEO in light of the goals and objectives that had been established for him or her, and makes compensation recommendations to the Board which reflect the outcome of that review. The Compensation Committee is responsible to approve the Company's short and long-term incentive plans and, as appropriate, recommend to the Board amendments to those plans or revised interpretations of plan provisions.
The Compensation Committee has a charter, which is available in the “Investor Relations” section on the Company’s website at www.neogen.com.
Governance Committee—Mr. Tobin (Chair), Mr. Borel, Dr. Green, Ms. Gupta and Ms. Vetter serve on the Governance Committee, which met four times during fiscal 2023. The Governance Committee provides a leadership role in shaping the governance of the Company, providing oversight and direction with respect to the function and operation of the Board. The Governance Committee also provides oversight on management succession, human capital practices, risk management and environmental, social and governance matters.
21
The Governance Committee recommends to the Board criteria for selecting new directors, identifies the qualifications that would be advantageous to the Board, recommends the size of the Board and the appropriate mix of inside and outside directors, and ensures director diversity. The Board considers factors such as a potential candidate’s experience, judgment, integrity, and independence. Other important criteria include a deep understanding of the Company's business and markets, technology, manufacturing or research and development experience, other expertise relevant to the Company’s global operations, and the ability and willingness to devote adequate time to Board duties.
The Governance Committee identifies persons qualified to become directors and, as appropriate, recommends candidates to the Board for its approval and nomination. Board composition is reviewed periodically to ensure that the Board possesses the knowledge, experience and skills necessary for the Board to fulfill its duties. The Governance Committee’s charter requires that the Governance Committee take diversity of directors into account in the candidate selection process. The Governance Committee seeks potential candidates who, under Nasdaq, the SEC or such other applicable regulatory requirements, are considered independent directors. At the direction of the Board, the Governance Committee manages the CEO selection process, and ultimately recommends one or more candidates for consideration by the Board. In addition, the Governance Committee provides oversight and policy direction on employee satisfaction, equal opportunity, and, as appropriate, other human capital matters. The Governance Committee also provides oversight and policy direction on risk management policies, programs and trends and issues. For further information, see the charter of the Governance Committee which is available in the “Investor Relations” section of the Company’s website at www.neogen.com.
The Governance Committee generally relies on multiple sources for identifying and evaluating Board nominees, including referrals from the Company’s current directors and management. The Governance Committee does not solicit director nominations, but will consider recommendations by shareholders with respect to elections to be held at an Annual Meeting, so long as such recommendations are sent on a timely basis to the Corporate Secretary of the Company and are in accordance with the Company’s Bylaws. The Committee will evaluate nominees recommended by shareholders against the same criteria.
Audit Committee—Dr. Boehm (Chair), Mr. Borel, Mr. Capello and Mr. Tobin are currently members of the Audit Committee, which assists the Board in overseeing: (1) the integrity of the Company’s financial statements, including its use and reporting of any non-GAAP measures, (2) the effectiveness of the Company's internal control over financial reporting, (3) the Company’s compliance with laws and regulations to which it is subject, (4) the independent registered accounting firm’s qualifications, independence and performance, and (5) the performance of the Company’s internal audit function. The Audit Committee meets with management and the Company’s independent registered public accounting firm throughout the year and reports the results of its activities to the Board. The Audit Committee met eleven times during fiscal 2023. In addition, the Audit Committee’s responsibilities include: (a) sole authority for the appointment, retention, evaluation, compensation and oversight of the work of the Company’s independent registered public accounting firm, subject to ratification by the Board and shareholders, as necessary; (b) providing general oversight of accounting, auditing and financial reporting processes, including reviewing the audit results and monitoring the effectiveness of internal control over financial reporting, disclosure controls and the internal audit function; (c) reviewing and discussing with management the Company’s reports filed with or furnished to the SEC that include financial statements or results; and (d) monitoring compliance with significant legal and regulatory requirements, and other risks related to financial reporting and internal control over financial reporting. In addition, the Audit Committee is required to review and approve, at least annually, all related party transactions and significant conflicts of interest. Further information regarding the role of the Audit Committee is contained in its charter which is available in the “Investor Relations” section of the Company’s website at www.neogen.com; also see “Audit Committee Report” in this Proxy Statement. The Board has determined that all current members of the Audit Committee are “audit committee financial experts” for purposes of applicable SEC rules and are each independent under Nasdaq listing rules.
Science, Technology and Innovation Committee— Dr. Green (Chair), Ms. Gupta, Mr. Rodriguez and Dr. Woteki serve on the Science, Technology and Innovation Committee, which met once during fiscal 2023, and assists the Board in overseeing the development of new products, services and business models. In discharging these responsibilities, the committee reviews and evaluates the strategic goals and objectives of the Company’s research and development programs, including the monitoring and evaluation of emerging technologies, and assists the Board with its oversight responsibility for enterprise risk management in areas affecting the Company’s research and
22
development, including scientific ethics and conduct. The Science, Technology and Innovation Committee charter is available in the “Investor Relations” section on the Company’s website at www.neogen.com.
Board Leadership
Mr. Borel serves as the Chair of the Company's Board and leads all meetings of the Board. Mr. Adent serves as the Company's President and Chief Executive Officer and does not attend independent director sessions of the Board except upon request. The Board has concluded that this leadership structure is appropriate for the Company at this time as it allows the Chair to focus on the effectiveness and independence of the Board while the CEO focuses on executing the Company's strategy and managing the Company's business. The independent directors meet in executive session at least quarterly.
Management’s Role in Determining Executive Compensation
The Compensation Committee makes all determinations regarding officer compensation other than with respect to the CEO, which final decision is made by the Board upon recommendation of the Compensation Committee. Management’s involvement in determining executive compensation is limited to the Chief Executive Officer making recommendations on compensation for members of the executive management team.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee has served as an officer or employee of the Company at any time. No executive officer serves as a member of the compensation committee or board of directors of any other company that has an executive officer serving as a member of the Company’s Compensation Committee or Board.
Corporate Governance Guidelines
The Board has adopted the Corporate Governance Guidelines, which provide a structure for the Company’s Board of Directors and management to effectively pursue the Company’s objectives for the benefit of its shareholders. The Corporate Governance Guidelines address, among other things, Board and committee structure, composition and procedures, Director responsibilities, Director board service limits, compensation and continuing education, and shareholder communications with the Board.
Employee, Officer and Director Hedging
The Company, pursuant to the terms of its Insider Trading Policy, prohibits all directors, officers and employees, engaging in certain hedging transactions related to, or, without approval from the Chief Financial Officer and Chair of the Board, from pledging or creating a security interest in, the Company’s securities they hold.
Board Role in Risk Management
The Board oversees the Company’s risk management. This oversight is administered primarily through the Board’s review and approval of the management business plan, including the projected opportunities and challenges facing the business, periodic review by the Board of business developments, strategic plans and implementation, liquidity and financial results, the Board’s oversight of succession planning, capital spending and financing, the Audit Committee’s oversight of the Company’s internal controls over financial reporting and its discussions with management and the independent accountants regarding the quality and adequacy of internal controls and financial reporting (and related reports to the full Board), the Governance Committee’s leadership in the evaluation of the Board and committees and its oversight of identified risk areas of the Company, and the Compensation Committee’s review and approvals regarding executive officer compensation and its relationship to the Company’s business plan, as well as its review of compensation plans generally and the related risks.
23
Contacting the Board
Shareholders and other interested persons can communicate directly with the Board or any individual director on a confidential basis by mail to Board of Directors, Neogen Corporation, 620 Lesher Place, Lansing, Michigan 48912, Attention: Corporate Secretary. All such communications will be received directly by the Corporate Secretary and forwarded to the Board or any individual director, as applicable, and will not be screened or reviewed by any other Company employee.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics applicable to all Company employees, officers and directors as well as the Company's partners and vendors. The Code of Business Conduct and Ethics is posted on the Company’s website at www.neogen.com in the “Investor Relations” section and will be mailed or emailed to any shareholder upon request to the Corporate Secretary at 620 Lesher Place, Lansing, Michigan 48912.
Certain Relationships and Related Party Transactions
The Audit Committee approves or ratifies transactions in which the Company was or is to be a participant that involve directors, executive officers or principal shareholders, or members of their immediate families or entities controlled by any of them, or in which they have a substantial ownership interest, in which the amount involved exceeds $120,000 and that are otherwise reportable under SEC disclosure rules. Such transactions include employment of immediate family members of any director or executive officer. Management advises the Audit Committee of any such transaction that is proposed to be entered into or continued and seeks Audit Committee approval. In the event any such transaction is proposed for which a decision is required prior to the next regularly scheduled meeting of the Audit Committee, it may be presented to the Audit Committee Chair for approval, in which event the decision will be reported to the full Audit Committee at its next meeting.
There were no transactions with related parties during fiscal year 2023 for the Audit Committee to review and approve in accordance with the written policy, as described above, which is included in the Audit Committee Charter.
Family Relationships and Other Arrangements
There are no family relationships among the members of the Board of Directors and executive officers. Except as described within their biographies with respect to Ms. Gupta and Mr. Capello, there are no arrangements or understandings between or among the Company’s executive officers and directors pursuant to which any director or executive officer was or is to be selected as a director or executive officer.
COMPENSATION DISCUSSION AND ANALYSIS
Named Executive Officers
Named executive officers (“NEOs”) for SEC reporting purposes are:
Name |
|
Title |
John E. Adent |
|
President & Chief Executive Officer |
Douglas E. Jones |
|
Chief Operating Officer |
Jason W. Lilly, Ph.D. |
|
Vice President, Americas & Australia/New Zealand |
David H. Naemura |
|
Chief Financial Officer |
Steven J. Quinlan |
|
Vice President, Finance |
Amy M. Rocklin |
|
Chief Legal & Compliance Officer |
Brief biographies of the NEOs, with the exception of Mr. Adent, follow. Mr. Adent’s biography is included in “Proposal 1-Election of Directors.”
24
Douglas E. Jones, age 53, joined Neogen as Chief Commercial Officer on August 17, 2020; in 2022, he was named Chief Operating Officer. Prior to joining Neogen, Mr. Jones served as the President of the Companion Animal Division at Patterson Companies from 2016 to August 2020. Prior to joining Patterson, Mr. Jones served as the Head of Business Operations for the North American Merial Animal Health Division of Sanofi. Mr. Jones began his career as a management consultant with the North Highland Company and PriceWaterhouseCoopers, focusing on commercial transformation and strategy projects in the pharmaceutical, healthcare distribution and high-tech industries.
Dr. Jason W. Lilly, age 49, joined Neogen in June 2005 as Market Development Manager for Food Safety. In June 2009, he moved to the Corporate Development group. He was named Vice President of Corporate Development in December 2011, responsible for the identification and acquisition of new business opportunities for the Company. In January 2019, Dr. Lilly was named Vice President, International Business, responsible for Neogen’s operations outside of the U.S. and Canada. In May 2023, Dr. Lilly was named Vice President, Americas & Australia/New Zealand, with responsibility for all commercial business. He also has strategic and operational oversight of our global genomics business. Prior to joining Neogen, he served in various technical sales and marketing roles at Invitrogen Corporation.
David H. Naemura, age 54, joined Neogen in November 2022 as Chief Financial Officer. Previously, Mr. Naemura served as the Senior Vice President and Chief Financial Officer of Vontier Corporation from February 2020 until November 2022. Mr. Naemura served as Chief Financial Officer of Gates Industrial Corporation from March 2015 to January 2020. Mr. Naemura led the financial reporting teams at each of Vontier Corporation and Gates Industrial Corporation. Prior to his time at Gates Industrial Corporation, Mr. Naemura served as Vice President of Finance and Group Chief Financial Officer at Danaher Corporation from April 2012 to March 2015, and previously served as Danaher Corporation’s Test & Measurement Communications Platform Chief Financial Officer from January 2009 to April 2012. Prior to 2009, Mr. Naemura was employed by Tektronix Corporation from August 2000 to January 2009, including during its acquisition by Danaher Corporation in 2007.
Steven J. Quinlan, age 60, joined Neogen in January 2011 as Vice President & Chief Financial Officer and was also Corporate Secretary until March 2021. Mr. Quinlan announced his retirement in September 2022 and Mr. Naemura was subsequently appointed as Chief Financial Officer, beginning in November 2022. For the remainder of fiscal year 2023, Mr. Quinlan continued to serve the Company as Vice President of Finance and is continuing to work on special projects through the end of the 2023 calendar year. Prior to his retirement announcement, Mr. Quinlan was responsible for all internal and external financial reporting for Neogen, and managed the accounting, information technology, corporate purchasing, treasury and investor relations functions. Mr. Quinlan came to Neogen following 19 years at Detrex Corporation (1992-2010), the last eight years serving as Vice President-Finance, CFO and Treasurer. He was on the audit staff at the public accounting firm Price Waterhouse (now PricewaterhouseCoopers) from 1985-1989.
Amy M. Rocklin, Ph.D., age 51, joined Neogen in March 2021 as Vice President, General Counsel & Corporate Secretary. In 2022, Dr. Rocklin was named Chief Legal & Compliance Officer. In this role, she is responsible for all legal and compliance matters and also leads the regulatory, quality and ESG functions. Dr. Rocklin also serves as the Corporate Secretary. Prior to joining Neogen, Dr. Rocklin was Division Vice President, Corporate Law at Corning Incorporated. In her nearly ten years at Corning, she held multiple leadership positions within Corning’s Law Department. Before Corning, Dr. Rocklin held leadership positions at Smiths Group plc and was in private practice at the law firm of Foley & Lardner LLP.
Compensation Objectives
The Company’s executive compensation programs are designed to be aligned with shareholder value creation and are structured to reward individual and organizational performance and to be simple, concise and understandable. A significant percentage of each NEO’s compensation consists of variable pay.
25
The primary objectives of the compensation programs covering NEOs are to:
Compensation Elements
The primary compensation elements provided to NEOs are:
Other compensation elements include health and welfare benefits plans, with the NEOs receiving similar benefits to those provided to all other eligible U.S.-based employees, such as medical, life insurance and disability coverage.
The Compensation Committee is provided materials by management regarding the various compensation elements of each NEO’s compensation package. The Compensation Committee makes decisions about each compensation element in the context of each NEO’s total compensation package. The compensation of senior level employees generally incorporates variable pay elements such as bonus and stock options, although no specific formula, schedule or tier is applied in establishing compensation “mix.” Each of the compensation elements and its purpose is further described below.
The Company, through the Board of Directors Compensation Committee, engaged Meridian Compensation Partners, LLC ("Meridian") to serve as its executive compensation consultant for fiscal year 2023. While Meridian may make recommendations on the form and amount of compensation, the Compensation Committee continues to make all decisions regarding the compensation of our CEO, NEOs and senior management. CEO compensation remains subject to the review and approval of the independent Directors of the Board. In 2023, Meridian served the Company in a variety of activities, including:
As a result of the 3M Food Safety transaction, which was completed on September 1, 2002, the revenues of the Company grew by 56% for fiscal 2023 while gross profit rose 67%. Over 400 employees conveyed to the Company in the transaction, increasing total worldwide headcount to over 2,600 employees, with a significant increase in geographic footprint. Increases in salary and overall compensation were made in fiscal 2023 to reflect the increased size and complexity of the organization and to ensure the competitiveness of the Company’s overall compensation structure. These increases in compensation are reflected in the base salary adjustments, target and actual bonus opportunities, and stock award tables below.
26
Consideration of Last Year’s Say-on-Pay Vote
At the Company's 2022 annual meeting of shareholders, shareholders were provided with an opportunity to cast an advisory vote on the compensation of the Company’s executive officers. The say-on-pay vote yielded approximately 96% approval of those votes cast. Notwithstanding this favorable vote, we continue to seek input from our shareholders to understand their views with respect to our approach to executive compensation, and in particular in connection with the Compensation Committee’s efforts to tie compensation to performance.
Consideration of Risk
The Company believes the design of the Company’s executive compensation program provides an appropriate balance of incentives for executives and avoids inappropriate risks. The compensation program is balanced and focused on the long-term so that the Company’s executive officers are incentivized to deliver superior performance over sustained periods. In an effort to promote a focus on the long-term, these compensation plans have elements that are only realizable upon completion of a five-year service requirement. The Company believes that these plans provide strong incentives to implement policies that promote long-term value creation while avoiding excessive risk-taking in the short-term.
Performance goals are established to align with the Company’s overall risk framework and reflect a balanced mix of financial measures designed to avoid placing excessive weight on a single measure. Compensation is also balanced among current cash payments, deferred cash, and equity awards.
Base Salary
Base salary is intended to compensate the executive for the basic market value of the position, time in the position and the relation of that position to other positions in the Company. Each NEO’s salary and performance is reviewed annually. Factors considered in determining the level of executive base pay include the role and responsibilities of the position, performance against expectations and an individual’s job experience or unique role responsibilities.
Actual earned salary for fiscal 2023 is shown in the “Salary” column of the Summary Compensation Table. Base salary rates and changes from 2022 to 2023, if applicable, are shown in the following table.
Name |
|
2023 Salary Rate |
|
|
2022 Salary Rate |
|
|
Percent |
|
|||
John E. Adent |
|
$ |
750,000 |
|
|
$ |
487,000 |
|
|
|
54.0 |
% |
Douglas E. Jones |
|
|
495,000 |
|
|
|
365,000 |
|
|
|
35.6 |
% |
Jason W. Lilly, Ph.D. |
|
|
310,000 |
|
|
|
280,000 |
|
|
|
10.7 |
% |
David H. Naemura |
|
|
500,000 |
|
|
|
— |
|
|
N/A |
|
|
Steven J. Quinlan (1) |
|
|
317,000 |
|
|
|
317,000 |
|
|
|
0.0 |
% |
Amy M. Rocklin(2) |
|
|
430,000 |
|
|
|
265,000 |
|
|
|
62.3 |
% |
Discretionary Annual Bonus
Bonuses paid in fiscal 2024 related to fiscal 2023 performance are as follows:
Name |
|
Target |
|
|
Actual |
|
|
Percentage |
|
|
Percentage of Base Salary |
|
||||
John E. Adent |
|
$ |
750,000 |
|
|
$ |
637,500 |
|
|
|
85 |
% |
|
|
85 |
% |
Douglas E. Jones. |
|
|
297,000 |
|
|
|
252,450 |
|
|
|
85 |
% |
|
|
51 |
% |
Jason W. Lilly, Ph.D. |
|
|
124,000 |
|
|
|
132,500 |
|
|
|
107 |
% |
|
|
43 |
% |
David H. Naemura |
|
|
500,000 |
|
|
|
250,000 |
|
|
|
50 |
% |
|
|
50 |
% |
Steven J. Quinlan |
|
|
158,300 |
|
|
|
100,000 |
|
|
|
63 |
% |
|
|
32 |
% |
Amy M. Rocklin |
|
|
215,000 |
|
|
|
182,750 |
|
|
|
85 |
% |
|
|
43 |
% |
27
Target values for bonuses are set by the Compensation Committee and communicated to the officers at the time that the prior year actual payments are approved. Bonus awards are determined by the Compensation Committee based on the Company’s performance, officers’ achievements of their objectives and the Committee’s perception of the efforts expended during the recently completed fiscal year. The Compensation Committee took into account the recommendations of Mr. Adent with respect to bonuses for Mr. Jones, Dr. Lilly, Mr. Quinlan and Dr. Rocklin. Mr. Naemura joined the Company in November 2022; per the terms of his offer letter, his bonus was guaranteed at $250,000 for fiscal 2023. This guaranteed bonus amount was intended to ensure that Mr. Naemura was offered a competitive pay package when joining the company, especially given the complexity of joining the Company as it was integrating the acquired 3M FSD business. It should also be noted that Mr. Naemura did not receive a sign-on bonus upon beginning his role as Chief Financial Officer in November 2022. His annual bonus opportunity for fiscal 2024 is $500,000 and is not guaranteed. Beginning fiscal year 2024, Mr. Naemura's target and actual bonuses are based on individual objectives and the Company's performance. Similarly, Mr. Naemura's fiscal year 2024 long-term incentive compensation has not been predetermined and will be awarded based on the Compensation Committee's review and discretion.
Overall, all target and actual bonuses are based on individual objectives and the Company’s performance, within the discretion of the Compensation Committee. The Compensation Committee’s assessment of the Company’s overall performance was influenced, in part, by the following:
While the Company reported a net loss of $22.9 million for fiscal year 2023 compared to net income of $48.3 million for fiscal year 2022, the change was primarily the result of $56.0 million of interest expense from the $1 billion in debt incurred in the 3M Food Safety transaction, $59.8 million of related transaction fees and integration expenses, and $60.9 million in incremental amortization expenses related to 3M acquired intangibles. Adjusted net income, which removes the impact of these and other nonrecurring items, was $105.7 million in fiscal year 2023, representing an increase of $26.4 million compared to adjusted net income of $79.3 million in fiscal year 2022.
Mr. Adent’s bonus opportunity for fiscal 2023 was primarily based on the successful closing of the 3M FSD transaction and the preparation for and initial integration of the 3M FSD business, as well as the achievement of the Company’s financial objectives. Mr. Adent had additional objectives related to continued improvements in product quality, progress on the implementation of the Company’s environmental, social and governance (ESG) strategy, phased implementation of the Company’s compliance program and reduction of voluntary employee turnover. In addition to the 3M FSD transaction, the Compensation Committee took into consideration the Company's core revenue growth and Adjusted EBITDA performance in determining Mr. Adent’s annual bonus for fiscal 2023. Additionally, manufacturing issues at 3M, which is supplying certain products to the Company for the 3M FSD business under a number of transition agreements, resulted in product backorders and hampered the attainment of financial objectives for the 3M FSD business in the first nine months of Company ownership. Mr. Adent and other Company executives addressed these issues with 3M and made significant progress mitigating them. In addition to his objectives related to the 3M FSD transaction and financial metrics, Mr. Adent largely achieved objectives in continuing the implementation of the Company’s ESG strategy, the improvement of product quality and the reduction of voluntary employee turnover. The Compensation Committee, after taking the above into account,
28
determined that Mr. Adent had continued to provide strong, effective and proactive leadership during the year, and awarded Mr. Adent 85% of his targeted bonus opportunity.
The fiscal 2023 bonus opportunity for Mr. Jones was primarily based on the successful closing of the 3M FSD transaction and the preparation for and initial integration of the 3M FSD business, as well as the achievement of the Company’s financial objectives. Additional objectives for Mr. Jones included improvements in manufacturing and supply chain, and shared objectives in improving product quality and compliance. Significant efforts were expended to ensure a successful closing of the 3M FSD transaction and Mr. Jones’ leadership was instrumental in driving the initial integration of the business. The Company had significant improvements in product quality and, based on his performance and the achievement of his objectives in fiscal 2023, the Committee awarded Mr. Jones 85% of his bonus opportunity.
Dr. Lilly's fiscal 2023 bonus opportunity was primarily based on the successful closing of the 3M FSD transaction and the preparation for and initial integration of the 3M FSD business. In his role leading the Company’s international and agrigenomics businesses, Dr. Lilly had additional objectives tied to the achievement of financial metrics, capacity enhancements, operational improvements and new product introductions. Significant efforts were expended in fiscal 2023 on the successful closing of the 3M FSD transaction and initial integration of the business internationally, including the creation of the proper legal entities, the successful absorption of the conveying employees, the hiring of additional international senior leadership roles, and the alignment of the legacy and newly acquired sales and marketing teams and strategies. Additional work was completed to prepare the organization to exit certain transition service agreements between 3M and the Company. Capacity improvements and automation, designed to increase efficiency, were also completed in the genomics business during the year. Based on his operations’ financial performance, and his efforts in the successful integration of both the 3M FSD international business and a recently acquired genomics business, Dr. Lilly was awarded 107% of his bonus opportunity.
Mr. Quinlan’s bonus opportunity for fiscal 2023 was tied primarily to the successful closing of and initial accounting for the 3M FSD transaction, including the opening balance sheet and purchase price allocation, as well as the achievement of financial objectives for the overall Company. In addition, Mr. Quinlan had shared objectives with the leadership team on continued progress on the Company’s ESG strategy. Mr. Quinlan announced his retirement from his role as Chief Financial Officer, effective at the end of the Company’s second quarter of fiscal 2023, and remained with the Company through the end of fiscal 2023 to ensure a smooth transition for his successor, Mr. Naemura, and to transition the Company’s investor relations function. Based on achievement of his goals while in his role in fiscal 2023, Mr. Quinlan was awarded 63% of his targeted bonus.
Dr. Rocklin’s bonus opportunity was primarily based on the successful closing of the 3M FSD transaction and initial integration of the 3M FSD business, as well as the achievement of the Company's financial objectives. Dr. Rocklin had additional objectives of aligning corporate governance policies, documents and processes with the Company’s structure, the implementation of a phased compliance program across the Company and the development of an intellectual property strategy and training curriculum for the organization. She also had shared objectives for the overall Company's financial metrics and the continued rollout of the Company’s ESG strategy. Significant progress was made on the revision of governance policies and processes, the creation of the corporate intellectual property strategy and the implementation of the Company’s compliance program. Based on the overall assessment of progress made on her objectives, Dr. Rocklin was awarded 85% of her bonus opportunity.
29
Long-Term Incentive Compensation
The objectives of the long-term incentive portion of the compensation package are to:
The primary long-term incentive mechanism at the Company has historically been stock option awards, the ultimate value of which is dependent on increases in the Company’s stock price. During fiscal 2021, the Company also began to award restricted stock units (“RSUs”) as an additional vehicle for long-term incentive compensation for Company employees. Stock options and RSUs are granted to provide employees with a personal financial interest in the Company’s long-term success, promote retention of employees and enable the Company to compete for the services of new employees in a competitive market. The Company believes that stock options and RSUs are appropriate means to incentivize the achievement of long-term objectives.
The stock option and RSU programs are designed to deliver competitive long-term awards while incurring reasonable levels of expense and shareholder dilution. It is the Company’s view that grants of stock options and RSUs represent appropriate uses of corporate resources and are effective methods for the Company to achieve its long-term compensation element objectives.
In general, stock options granted to employees are incentive options with seven year lives that vest 33% per year beginning with the year following the initial year of grant. Prior to fiscal year 2022, stock options granted had five year lives and vested 20% per year. Certain incentive options are converted to non-qualified options when IRS limitations for incentive options are exceeded. The non-qualified options retain the same vesting and life provisions as incentive options. Directors are granted non-qualified stock options, with seven year terms and vesting of 33% per year for each of the three years following the year of grant. In all cases, grant prices are equal to the closing price on the day of the grant. The Company does not reprice options and does not “reload”—which means the recipient is only able to exercise the number of shares in the original stock option grant. RSUs granted to employees have three -year vesting periods, with 33% of the units vesting each year beginning with the first anniversary date of the grant. The RSU is priced at the closing stock price on the date of the grant. Non-employee directors are also granted RSUs, with three year lives, which vest 33% per year for each of the three years beginning on the first anniversary date of the grant. The Company’s practice has been to make an annual award of option grants or RSUs to a select group of employees as well as occasional hire-on awards to select new hires.
Annual stock option and RSU grants are made at the discretion of the Compensation Committee, with the exception of non-employee Director awards that are granted annually on election or continuation of an existing term. Management makes recommendations to the Compensation Committee as to the stock option and RSU award levels. The determination with respect to the option or RSU award to be granted to any particular participant is ultimately subjective in nature. While no specific or absolute performance measures are applied, factors considered in determining the option or RSU award to an individual include his or her level of responsibility and position within the Company, demonstrated performance over time, value to the Company’s past and future success, historic grants, retention concerns and, in the aggregate, share availability under the plan, overall Company expense and shareholder dilution from awards. Management provides the Compensation Committee information on grants made in the past three years and the accumulated value of all stock option and RSU awards outstanding to each executive officer. During fiscal 2023, there was one grant of stock options and RSUs for NEOs; the annual recurring grant issued in October 2022.
The Company maintains two equity-based long-term incentive plans that have been previously approved by shareholders—the Neogen Corporation 2015 Omnibus Incentive Plan ( “2015 Plan”) and the 2018 Plan. Fiscal 2023 stock option and RSU grants were made under the 2018 Plan. If the 2023 Plan is approved at the 2023 Annual Meeting of Shareholders, future awards of equity or equity rights will be granted under the 2023 Plan and no further awards will be made under the 2018 Plan. In any event, no further awards can be made under the 2015 Plan.
30
The table below shows the amounts of the fiscal 2023 stock option grants to each of the NEOs.
Name |
|
Number of |
|
|
Compensation Cost Recognized for Option Grants (1) (2) |
|
||
John E. Adent |
|
|
625,001 |
|
|
$ |
2,800,000 |
|
Douglas E. Jones |
|
|
165,105 |
|
|
|
739,670 |
|
Jason W. Lilly, Ph.D. |
|
|
41,965 |
|
|
|
188,004 |
|
David H. Naemura |
|
|
172,413 |
|
|
|
900,000 |
|
Steven J. Quinlan (3) |
|
|
— |
|
|
|
— |
|
Amy M. Rocklin |
|
|
120,537 |
|
|
|
540,000 |
|
Black-Scholes Model Assumptions (1) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|||||
Risk-free interest rate |
|
|
3.3 |
% |
|
|
0.4 |
% |
|
|
0.2 |
% |
|
|
1.9 |
% |
|
|
2.6 |
% |
Expected dividend yield |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
Expected stock price volatility |
|
|
34.0 |
% |
|
|
32.8 |
% |
|
|
31.3 |
% |
|
|
29.4 |
% |
|
|
27.0 |
% |
Expected option life |
|
4.5 years |
|
|
3.12 years |
|
|
3.25 years |
|
|
3.5 years |
|
|
3.5 years |
|
|||||
The table below shows the amounts of the fiscal 2023 RSU grants to each of the NEOs.
Name |
|
Number of |
|
|
Compensation Cost Recognized for RSU Grants (1) |
|
||
John E. Adent |
|
|
90,361 |
|
|
$ |
1,200,000 |
|
Douglas E. Jones |
|
|
37,133 |
|
|
|
493,126 |
|
Jason W. Lilly, Ph.D. |
|
|
14,157 |
|
|
|
188,004 |
|
David H. Naemura |
|
|
38,735 |
|
|
|
600,000 |
|
Steven J. Quinlan (2) |
|
|
— |
|
|
|
— |
|
Amy M. Rocklin |
|
|
27,108 |
|
|
|
360,000 |
|
Retirement Plans: A defined contribution plan, the Neogen Corporation 401(k) Retirement Savings Plan (“401(k) Plan”) is available to all eligible U.S. employees including all NEOs. Under the 401(k) Plan, the Company matches dollar per dollar of the first 3%, and fifty cents per dollar of the next 2%, of pay contributed by the employee up to the Internal Revenue Code limits. Matching contributions to the 401(k) Plan vest immediately.
Health and Welfare Benefits Plans: Benefits such as medical, dental, vision, life insurance and disability coverage are provided to each NEO under benefits plans that are provided to all eligible U.S.-based employees. The benefits plans are part of the overall total compensation offering and are intended to be competitive and provide health care coverage for employees and their families. The NEOs have no additional Company-paid health benefits. Similar to
31
all other employees, NEOs have the ability to purchase supplemental life, dependent life, long-term care insurance, and accidental death and dismemberment coverage through the Company. The value of these benefits is not included in the Summary Compensation Table since they are purchased by each NEO and are made available to all U.S. employees. No form of post-retirement health care benefits is provided to any employee.
Perquisites: The values of perquisites and other personal benefits are included in the “All Other Compensation” column of the Summary Compensation Table, and consist primarily of Company matching contributions to the 401(k) Plan and the value of Company paid group term life insurance.
Employee Stock Purchase Plan: Employees in the U.S. are permitted to voluntarily purchase Company stock at a 5% discount through after-tax payroll deductions under the Employee Stock Purchase Plan (“ESPP”) as a way to facilitate employees becoming shareholders of the Company. The ESPP purchases stock bi-annually for participants through a third party plan administrator. Each of the NEOs is currently eligible to purchase shares through the ESPP.
Executive and Non-Employee Director Stock Ownership Requirements
The Company has stock ownership requirements in place for all corporate officers, including the NEOs and Directors. This reflects the Company’s belief that all senior executives and Directors should have meaningful share ownership positions in the Company to reinforce the alignment of management and shareholder interests. The Compensation Committee periodically reviews the policy requirements to ensure they continue to be reasonable and competitive.
The ownership requirements are:
Position |
|
Market Value of Stock Owned |
Non-Employee Directors |
|
5 times annual cash fees paid |
Chief Executive Officer |
|
5 times annual base salary |
Corporate Officers |
|
2 times annual base salary |
For purposes of the ownership requirements, stock owned includes shares owned outright, including 401(k) Plan shares, but does not include unexercised stock options or unvested RSUs. Executives and non-employee directors that have not met the ownership requirements, are prohibited from selling more than 25% of their vested shares.
Chief Executive Officer Compensation
John Adent has been the President and Chief Executive Officer of the Company since 2017. His base salary in fiscal 2023 was adjusted on January 1, 2023, from $487,000 to $750,000, largely to reflect the increased size and complexity of the Company following the completion of the 3M FSD transaction. His target bonus opportunity was $750,000, based primarily on the successful closing of the 3M FSD transaction and initial integration of the business, as well as the achievement of certain financial objectives, and other strategic and operational goals. In addition to base salary and bonus opportunity, Mr. Adent was awarded 625,001 stock options and 90,361 RSUs in fiscal 2023, valued at $4,000,000 at the respective grant dates.
In determining the amount of Mr. Adent’s annual bonus for fiscal 2023, the Compensation Committee took into consideration the closing of the 3M FSD transaction and largely successful initial integration, the Company’s core revenue growth over fiscal 2022, improved gross margins, and the Board’s assessment of the level of attainment of Mr. Adent’s other fiscal 2023 goals, which included continued improvement in product quality, phased implementation of the Company’s compliance program, reduction in voluntary employee turnover and ongoing progress on the Company’s ESG strategy. Based on the above, the Committee awarded him 85% of his targeted bonus opportunity for the year.
32
Tax and Accounting Implications
Section 162(m) of the Code provides that annual compensation in excess of $1 million paid to a “covered employee” (which generally includes the chief executive officer, chief financial officer and certain other current or former named executive officers) is not deductible by the company for federal income tax purposes. To maintain flexibility in compensating the Company’s executive officers to meet a variety of objectives, the Compensation Committee reserves the right to compensate Company executives in amounts deemed appropriate and competitive, regardless of whether such compensation is deductible for federal income tax purposes. Section 162(m) of the Code is expected to prevent the Company from deducting a portion of the compensation paid to the Company’s NEOs in 2023.
Section 409A of the Code provides that amounts deferred under non-qualified deferred compensation arrangements will be included in an employee’s income when vested, as well as be subject to additional taxes, penalties and interest, unless certain requirements are complied with. The Company believes that its compensation arrangements satisfy, or are exempt from, the requirements of Section 409A.
If a company makes “parachute payments,” Section 280G of the Code prohibits the company from deducting the portion of the parachute payments constituting “excess parachute payments” and Section 4999 of the Code imposes on the payee a 20% excise tax on the excess parachute payments. For this purpose, parachute payments generally are defined as payments to specified persons that are contingent upon a change in control in an amount equal to or greater than three times the person’s base amount (i.e., the five-year average Form W-2 compensation). The excess parachute payments, which are nondeductible and subject to a 20% excise tax, equal the portion of the parachute payments that exceeds one times the payee’s base amount. If a covered employee receives excess parachute payments in any year, the $1 million deduction limitation applicable to the covered employee for such year under Section 162(m) of the Code is reduced (but not below zero) by the amount of the excess parachute payments.
The employment arrangements with the Company’s NEOs and the Company’s equity incentive plans may entitle participants to receive payments in connection with a change in control that may result in excess parachute payments. The Company is not obligated to pay any tax gross-ups with respect to the excise tax imposed on any person who receives excess parachute payments.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis and, on the basis of such review and discussions, has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by:
Darci L. Vetter (Chair)
William T. Boehm
Jeffrey D. Capello
Raphael A Rodriguez
Catherine E. Woteki
Members of the Compensation Committee
33
EXECUTIVE COMPENSATION
The table sets forth information regarding all elements of compensation paid to the Company’s named executive officers (principal executive officer, principal financial officer and the three other most highly compensated executive officers) (the “NEOs”) for fiscal years 2023, 2022 and 2021.
Summary Compensation Table for Fiscal Years 2023, 2022, and 2021
Name and Principal Position |
|
Year |
|
Salary |
|
|
Bonus |
|
|
Stock Awards (1) |
|
|
Option Awards (1) |
|
|
All Other Compensation (2) |
|
|
Total |
|
||||||
John E. Adent |
|
2023 |
|
$ |
671,100 |
|
|
$ |
637,500 |
|
|
$ |
1,200,000 |
|
|
$ |
2,800,000 |
|
|
$ |
16,574 |
|
|
|
5,325,174 |
|
President & Chief Executive Officer |
|
2022 |
|
|
477,798 |
|
|
|
900,000 |
|
|
|
925,689 |
|
|
|
1,999,858 |
|
|
|
12,082 |
|
|
|
4,315,427 |
|
|
|
2021 |
|
|
459,173 |
|
|
|
378,000 |
|
|
|
480,832 |
|
|
|
1,181,786 |
|
|
|
7,255 |
|
|
|
2,507,046 |
|
Douglas E. Jones (3) |
|
2023 |
|
|
456,000 |
|
|
|
252,450 |
|
|
|
493,126 |
|
|
|
739,670 |
|
|
|
966 |
|
|
|
1,942,212 |
|
Chief Operating Officer |
|
2022 |
|
|
357,924 |
|
|
|
330,000 |
|
|
|
279,999 |
|
|
|
381,491 |
|
|
|
4,232 |
|
|
|
1,353,646 |
|
|
|
2021 |
|
|
277,531 |
|
|
|
120,000 |
|
|
|
95,962 |
|
|
|
151,941 |
|
|
|
3,266 |
|
|
|
648,700 |
|
Jason W. Lilly, Ph.D. |
|
2023 |
|
|
301,000 |
|
|
|
132,500 |
|
|
|
188,004 |
|
|
|
188,004 |
|
|
|
13,298 |
|
|
|
822,806 |
|
Vice President, Americas |
|
2022 |
|
|
274,685 |
|
|
|
191,388 |
|
|
|
385,019 |
|
|
|
352,225 |
|
|
|
10,919 |
|
|
|
1,214,236 |
|
& Australia/New Zealand |
|
2021 |
|
|
234,734 |
|
|
|
99,932 |
|
|
|
200,461 |
|
|
|
211,033 |
|
|
|
5,586 |
|
|
|
751,746 |
|
David H. Naemura (4) |
|
2023 |
|
|
228,846 |
|
|
|
250,000 |
|
|
|
600,000 |
|
|
|
900,000 |
|
|
|
297 |
|
|
|
1,979,143 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Steven J. Quinlan (5) |
|
2023 |
|
|
317,000 |
|
|
|
100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
14,385 |
|
|
|
431,385 |
|
Vice President, Finance |
|
2022 |
|
|
310,971 |
|
|
|
280,000 |
|
|
|
385,988 |
|
|
|
527,276 |
|
|
|
11,880 |
|
|
|
1,516,115 |
|
|
|
2021 |
|
|
274,519 |
|
|
|
100,000 |
|
|
|
192,265 |
|
|
|
303,882 |
|
|
|
6,816 |
|
|
|
877,482 |
|
Amy M. Rocklin (6) |
|
2023 |
|
|
380,500 |
|
|
|
182,750 |
|
|
|
360,000 |
|
|
|
540,000 |
|
|
|
966 |
|
|
|
1,464,216 |
|
Chief Legal & |
|
2022 |
|
|
255,481 |
|
|
|
21,000 |
|
|
|
140,011 |
|
|
|
185,696 |
|
|
|
759 |
|
|
|
602,948 |
|
Compliance Officer |
|
2021 |
|
|
43,269 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
43,269 |
|
The following table sets forth the fiscal 2023 compensation cost recognized for fiscal 2023 equity-based awards and compensation cost recognized for equity-based awards granted in prior years:
Option and RSU Awards
Name |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
Total |
|
||||||
John E. Adent |
|
$ |
799,527 |
|
|
$ |
544,440 |
|
|
$ |
337,445 |
|
|
$ |
295,104 |
|
|
$ |
283,175 |
|
|
$ |
2,259,690 |
|
Douglas E. Jones |
|
|
268,513 |
|
|
|
125,885 |
|
|
|
50,314 |
|
|
|
— |
|
|
|
— |
|
|
|
444,712 |
|
Jason W. Lilly, Ph.D. |
|
|
75,173 |
|
|
|
139,902 |
|
|
|
83,517 |
|
|
|
108,205 |
|
|
|
94,392 |
|
|
|
501,187 |
|
David H. Naemura |
|
|
231,142 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
231,142 |
|
Steven J. Quinlan |
|
|
— |
|
|
|
172,384 |
|
|
|
100,698 |
|
|
|
131,157 |
|
|
|
113,270 |
|
|
|
517,508 |
|
Amy M. Rocklin |
|
|
179,911 |
|
|
|
61,742 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
241,653 |
|
34
The following table indicates the “mix” of total direct compensation for the NEOs in fiscal 2023 based on salary, total bonus payment and the Codification Topic 718 compensation expense of fiscal 2023 equity-based awards:
Name |
|
Salary |
|
|
Annual |
|
|
Equity Based Awards (1) |
|
|||
John E. Adent |
|
$ |
750,000 |
|
|
$ |
637,500 |
|
|
$ |
4,000,000 |
|
Douglas E. Jones |
|
|
495,000 |
|
|
|
252,450 |
|
|
|
1,232,796 |
|
Jason W. Lilly, Ph.D. |
|
|
310,000 |
|
|
|
132,500 |
|
|
|
376,008 |
|
David H. Naemura |
|
|
500,000 |
|
|
|
250,000 |
|
|
|
1,500,000 |
|
Steven J. Quinlan |
|
|
317,000 |
|
|
|
100,000 |
|
|
|
— |
|
Amy M. Rocklin |
|
|
430,000 |
|
|
|
182,750 |
|
|
|
900,000 |
|
Grants of Plan-Based Awards in the 2023 Fiscal Year
The following table sets forth additional information regarding the option awards granted to the NEOs in the year ended May 31, 2023, that are, in combination with the RSU award totals, disclosed in the Summary Compensation Table.
Name |
|
Grant Date (1) |
|
Number of |
|
|
Exercise or Base Price of Option Awards (2) |
|
|
Grant-date Fair Value of Option Awards (3) |
|
|||
John E. Adent |
|
10/6/2022 |
|
|
625,001 |
|
|
$ |
13.28 |
|
|
$ |
2,800,000 |
|
Douglas E. Jones |
|
10/6/2022 |
|
|
165,105 |
|
|
|
13.28 |
|
|
|
739,670 |
|
Jason W. Lilly, Ph.D. |
|
10/6/2022 |
|
|
41,965 |
|
|
|
13.28 |
|
|
|
188,004 |
|
David H. Naemura |
|
11/28/2022 |
|
|
172,413 |
|
|
|
15.49 |
|
|
|
900,000 |
|
Steven J. Quinlan |
|
10/6/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Amy M. Rocklin |
|
10/6/2022 |
|
|
120,537 |
|
|
|
13.28 |
|
|
|
540,000 |
|
35
The following table sets forth additional information regarding the restricted stock units (“RSUs”) granted to the NEOs in the year ended May 31, 2023, that are, in combination with the stock option awards, disclosed in the Summary Compensation Table.
Name |
|
Grant Date (1) |
|
Number of |
|
|
Grant-date Fair Value of RSU Awards (2) |
|
||
John E. Adent |
|
10/6/2022 |
|
|
90,361 |
|
|
$ |
1,200,000 |
|
Douglas E. Jones |
|
10/6/2022 |
|
|
37,133 |
|
|
|
493,126 |
|
Jason W. Lilly, Ph.D. |
|
10/6/2022 |
|
|
14,157 |
|
|
|
188,004 |
|
David H. Naemura |
|
11/28/2022 |
|
|
38,735 |
|
|
|
600,000 |
|
Steven J. Quinlan |
|
10/6/2022 |
|
|
— |
|
|
|
— |
|
Amy M. Rocklin |
|
10/6/2022 |
|
|
27,108 |
|
|
|
360,000 |
|
36
Outstanding Equity Awards at May 31, 2023
The following table sets forth information regarding unexercised options that were held by the NEOs at May 31, 2023.
Name |
|
Grant Date (1) |
|
Number of Securities Underlying Unexercised Options Exercisable |
|
|
Number of Securities Underlying Unexercised Options Unexercisable (1) |
|
|
Option Exercise Price |
|
|
Option Expiration Date |
|||
John E. Adent |
|
11/1/2018 |
|
|
72,000 |
|
|
|
36,000 |
|
|
|
31.35 |
|
|
12/1/2023 |
President & Chief Executive Officer |
|
10/11/2019 |
|
|
72,000 |
|
|
|
72,000 |
|
|
|
31.95 |
|
|
11/11/2024 |
|
|
10/6/2020 |
|
|
61,502 |
|
|
|
92,252 |
|
|
|
34.15 |
|
|
11/6/2025 |
|
|
10/12/2021 |
|
|
30,070 |
|
|
|
120,282 |
|
|
|
40.85 |
|
|
11/12/2026 |
|
|
4/25/2022 |
|
|
17,178 |
|
|
|
68,712 |
|
|
|
28.40 |
|
|
5/25/2027 |
|
|
10/6/2022 |
|
|
— |
|
|
|
625,001 |
|
|
|
13.28 |
|
|
10/6/2029 |
|
|
|
|
|
252,750 |
|
|
|
1,014,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Douglas E. Jones |
|
10/6/2020 |
|
|
7,908 |
|
|
|
11,860 |
|
|
|
34.15 |
|
|
11/6/2025 |
Chief Operating Officer |
|
10/12/2021 |
|
|
4,943 |
|
|
|
19,774 |
|
|
|
40.85 |
|
|
11/12/2026 |
|
|
4/25/2022 |
|
|
4,417 |
|
|
|
17,669 |
|
|
|
28.40 |
|
|
5/25/2027 |
|
|
10/6/2022 |
|
|
— |
|
|
|
165,105 |
|
|
|
13.28 |
|
|
10/6/2029 |
|
|
|
|
|
17,268 |
|
|
|
214,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Jason W. Lilly, Ph.D. |
|
11/1/2018 |
|
|
23,364 |
|
|
|
12,000 |
|
|
|
31.35 |
|
|
12/1/2023 |
Vice President, Americas |
|
10/11/2019 |
|
|
26,400 |
|
|
|
26,400 |
|
|
|
31.95 |
|
|
11/11/2024 |
& Australia/New Zealand |
|
10/6/2020 |
|
|
10,982 |
|
|
|
16,474 |
|
|
|
34.15 |
|
|
11/6/2025 |
|
|
10/12/2021 |
|
|
4,840 |
|
|
|
19,362 |
|
|
|
40.85 |
|
|
11/12/2026 |
|
|
4/25/2022 |
|
|
3,681 |
|
|
|
14,724 |
|
|
|
28.40 |
|
|
5/25/2027 |
|
|
10/6/2022 |
|
|
— |
|
|
|
41,965 |
|
|
|
13.28 |
|
|
10/6/2029 |
|
|
|
|
|
69,267 |
|
|
|
130,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
David H. Naemura |
|
11/28/2022 |
|
|
— |
|
|
|
172,413 |
|
|
15.49 |
|
|
11/28/2029 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Steven J. Quinlan |
|
11/01/2018 |
|
|
57,600 |
|
|
|
14,400 |
|
|
|
31.35 |
|
|
12/1/2023 |
Vice President, Finance |
|
10/11/2019 |
|
|
48,000 |
|
|
|
32,000 |
|
|
|
31.95 |
|
|
11/11/2024 |
|
|
10/6/2020 |
|
|
15,814 |
|
|
|
23,722 |
|
|
|
34.15 |
|
|
11/6/2025 |
|
|
10/12/2021 |
|
|
6,982 |
|
|
|
27,930 |
|
|
|
40.85 |
|
|
11/12/2026 |
|
|
4/25/2022 |
|
|
5,889 |
|
|
|
23,559 |
|
|
|
28.40 |
|
|
5/25/2027 |
|
|
|
|
|
134,285 |
|
|
|
121,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amy M. Rocklin |
|
10/12/2021 |
|
|
1,853 |
|
|
|
7,416 |
|
|
|
40.85 |
|
|
11/12/2026 |
Chief Legal & Compliance Officer |
|
4/25/2022 |
|
|
2,944 |
|
|
|
11,780 |
|
|
|
28.40 |
|
|
5/25/2027 |
|
|
10/6/2022 |
|
|
— |
|
|
|
120,537 |
|
|
|
13.28 |
|
|
10/6/2029 |
|
|
|
|
|
4,797 |
|
|
|
139,733 |
|
|
|
|
|
|
|
37
The following table sets forth information regarding outstanding RSU awards held by the NEOs at May 31, 2023.
Name |
|
Grant Date (1) |
|
Number of Shares of Stock that have not Vested |
|
|
Market Value of Shares of Stock that have not Vested (2) |
|
||
John E. Adent |
|
10/6/2020 |
|
|
8,448 |
|
|
$ |
147,756 |
|
President & Chief Executive Officer |
|
10/12/2021 |
|
|
12,254 |
|
|
|
214,322 |
|
|
|
4/25/2022 |
|
|
8,451 |
|
|
|
147,808 |
|
|
|
10/6/2022 |
|
|
90,361 |
|
|
|
1,580,414 |
|
|
|
|
|
|
|
|
|
2,090,300 |
|
|
|
|
|
|
|
|
|
|
|
||
Douglas E. Jones |
|
10/6/2020 |
|
|
1,686 |
|
|
|
29,488 |
|
Chief Operating Officer |
|
10/12/2021 |
|
|
3,134 |
|
|
|
54,814 |
|
|
|
4/25/2022 |
|
|
3,380 |
|
|
|
59,116 |
|
|
|
10/6/2022 |
|
|
37,133 |
|
|
|
649,456 |
|
|
|
|
|
|
|
|
|
792,874 |
|
|
|
|
|
|
|
|
|
|
|
||
Jason W. Lilly, Ph.D. |
|
10/6/2020 |
|
|
3,522 |
|
|
|
61,600 |
|
Vice President, Americas |
|
10/12/2021 |
|
|
4,603 |
|
|
|
80,506 |
|
& Australia/New Zealand |
|
4/25/2022 |
|
|
4,226 |
|
|
|
73,913 |
|
|
|
10/6/2022 |
|
|
14,157 |
|
|
|
247,606 |
|
|
|
|
|
|
|
|
|
463,625 |
|
|
|
|
|
|
|
|
|
|
|
||
David H. Naemura |
|
11/28/2022 |
|
|
38,735 |
|
|
|
677,475 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Steven J. Quinlan |
|
10/6/2020 |
|
|
3,378 |
|
|
|
59,081 |
|
Vice President, Finance |
|
10/12/2021 |
|
|
4,426 |
|
|
|
77,411 |
|
|
|
4/25/2022 |
|
|
4,508 |
|
|
|
78,845 |
|
|
|
|
|
|
|
|
|
215,337 |
|
|
|
|
|
|
|
|
|
|
|
||
Amy M. Rocklin |
|
10/12/2021 |
|
|
1,176 |
|
|
|
20,568 |
|
Chief Legal & Compliance Officer |
|
4/25/2022 |
|
|
2,254 |
|
|
|
39,422 |
|
|
|
10/6/2022 |
|
|
27,108 |
|
|
|
474,119 |
|
|
|
|
|
|
|
|
|
534,110 |
|
|
38
Option Exercises and Stock Vested in 2023 Fiscal Year
This table sets forth information with respect to restricted stock units vested of the NEOs that vested during fiscal 2023. No options were exercised during fiscal year 2023.
Name |
|
Number of Shares Vested |
|
|
Value Realized on Vesting(1) |
|
||
John E. Adent |
|
|
7,991 |
|
|
$ |
110,247 |
|
Douglas E. Jones |
|
|
2,190 |
|
|
|
31,212 |
|
Jason W. Lilly, Ph.D. |
|
|
3,380 |
|
|
|
47,362 |
|
David H. Naemura |
|
|
— |
|
|
|
— |
|
Steven J. Quinlan |
|
|
3,358 |
|
|
|
47,363 |
|
Amy M. Rocklin |
|
|
856 |
|
|
|
13,033 |
|
Pension Benefits
The Company sponsors no defined benefit plans, therefore, none of the NEOs participates in a defined benefit plan sponsored by the Company.
Potential Payments upon Termination or Change-in-Control
The Company does not provide employment, severance or change-in-control agreements. The Company maintains a discretionary severance practice for all eligible employees, which could potentially include the NEOs. The discretionary practice provides for payments as determined by the Company as circumstances warrant.
39
PAY VERSUS PERFORMANCE
The following tables provide additional compensation information regarding our NEO's, prepared in accordance with the SEC's pay versus performance disclosure regulations for fiscal years 2023, 2022 and 2021.
Pay Versus Performance (PVP) Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 Investment Based On: |
|
|
|
|
|
|
|
|||||||||||
Year |
|
Summary Compensation Table (SCT) Total for PEO |
|
|
Compensation Actually Paid (CAP) to PEO(1) |
|
|
Average SCT Total for Non-PEO NEOs(2) |
|
|
Average CAP to Non-PEO NEOs(3) |
|
|
Neogen TSR |
|
|
S&P MidCap 400 Health Care Index TSR |
|
|
Net Income (in millions) |
|
|
Adjusted EBITDA (Company Selected Measure) (in millions) |
|
||||||||
2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CEO SCT Total to CAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year |
|
SCT Total |
|
|
Reported Value of Equity Awards |
|
|
Equity Award Adjustments(a) |
|
|
Compensation Actually Paid |
|
||||
2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CEO Equity Component of CAP
Year |
|
Awards Granted During Current Fiscal Year and Unvested at End of Year |
|
|
Awards Granted in Prior Fiscal Year(s) and Unvested at End of Year |
|
|
Awards Granted in Prior Fiscal Year(s) and Vested During Current Fiscal Year |
|
|
Equity Adjustment Included in CAP |
|
||||
2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
2022 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(2) Reflects the average amount reported in the “Total” column of the Summary Compensation Table for our other NEOs as a group (excluding Mr. Adent) for each corresponding year. The names of each of the other NEOs (excluding Mr. Adent) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Mr. Jones, Dr. Lilly, Mr. Naemura, Mr. Quinlan and Dr. Rocklin; and (ii) for 2022 and 2021, Mr. Quinlan, Mr. Jones, Dr. Lilly and Mr. Hagedorn.
(3) Amounts reported reflect CAP for the other NEOs as a group (excluding Mr. Adent), as computed in accordance with Item 402(v) of Regulation S-K, for each corresponding year, which amounts do not reflect an average of the actual amount of compensation earned by or paid to the other NEOs as a group (excluding Mr. Adent) during the applicable year. The adjustments below were made for each year to determine the CAP for such year in accordance with the requirements of Item 402(v) of Regulation S-K.
40
Average Other NEOs SCT Total to CAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year |
|
SCT Total |
|
|
Reported Value of Equity Awards |
|
|
Equity Award Adjustments(a) |
|
|
Compensation Actually Paid |
|
||||
2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
for our CEO, as computed in accordance with Item 402(v). The valuation assumptions used to calculate
equity award fair values did not materially differ from those disclosed at the time of grant.
Average Other NEOs Equity Component of CAP
Year |
|
Awards Granted During Current Fiscal Year and Unvested at End of Year |
|
|
Awards Granted in Prior Fiscal Year(s) and Unvested at End of Year |
|
|
Awards Granted in Prior Fiscal Year(s) and Vested During Current Fiscal Year |
|
|
Equity Adjustment Included in CAP |
|
||||
2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
2022 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
List of Most Important Measures
The four items listed below represent the most important metrics used to determine CAP for 2023 as further described in our Compensation Discussion & Analysis (CD&A) within the sections titled “Discretionary Annual Bonus” and “Long-Term Incentive Compensation:”
Performance Measure |
|
|
|
|
|
|
|
|
|
|
|
|
|
41
Description of the CAP and Performance Relationship
1. Total Shareholder Return (TSR): Neogen versus S&P 400 Health Care
The graph below assumes an initial investment of $100 on May 31, 2020, in Neogen common stock and the S&P MidCap 400 Health Care Index, and assumes dividends, if any, were reinvested. As shown in the graph, Neogen’s TSR was in line with the S&P MidCap 400 Health Care Index in 2021 and lower in 2022 and 2023. The companies included in the S&P MidCap 400 Health Care Index are not the same as those used in our compensation benchmarking.
2. Compensation Actually Paid (CAP) versus Neogen TSR
The graph below compares Neogen’s Total Shareholder Return (TSR) to the CEO’s and Other NEOs’ Compensation Actually Paid (CAP) for the three fiscal years beginning with 2021. As shown in the graph, the CAP to the CEO and Other NEOs declined with the Company’s TSR in 2022 before increasing in 2023, primarily reflecting the completion of the merger with the former 3M Food Safety Division and the resulting increase in size and complexity of the Company.
42
3. CAP versus Net Income
The graph below compares Neogen’s net income to the CEO’s and Other NEOs’ Compensation Actually Paid (CAP) for the three fiscal years beginning with 2021. Net income declined in 2022 and 2023, primarily as a result of transaction costs, the amortization of acquired intangibles and interest expense incurred on debt related to the merger with the former 3M Food Safety Division, while CAP to the CEO and Other NEOs has varied by year. Neogen does not use net income as a metric in the determination of executive compensation.
43
4. CAP versus Adjusted EBITDA (Company Selected Measure)
The graph below compares Neogen’s Adjusted EBITDA to the CEO’s and Other NEOs’ Compensation Actually Paid (CAP) for the three fiscal years beginning with 2021. Management defines Adjusted EBITDA as EBITDA, adjusted for share-based compensation, certain transaction fees and expenses and other non-recurring charges. Adjusted EBITDA increased each year, most notably in 2023 due to the merger with the former 3M Food Safety Division, while CAP to the CEO and Other NEOs has varied by year. While the Company uses other financial and non-financial performance measures in its compensation programs, Neogen has determined that Adjusted EBITDA is the most important performance measure used to link CAP to the CEO and Other NEOs in 2023 to the performance of the Company.
CEO PAY RATIO
In accordance with the requirements of Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the ratio of our median employee’s annual total compensation to the annual total compensation of our CEO. Mr. Adent has been the CEO of the Company since 2017, and served as CEO on May 31, 2023, the determination date of the median employee compensation.
The annual compensation used for this analysis included each element of compensation listed in the Summary Compensation Table in this Proxy. We annualized the total compensation for any employee on the payroll at May 31, 2023, who was not employed for all of fiscal 2023. We then ranked all of our employees (except for Mr. Adent) in terms of total compensation from highest to lowest, and identified the employee that ranked as the median. Following this methodology, the components of our pay ratio disclosure for fiscal 2023 were reasonably estimated as follows:
• The median of the total annual compensation for all of our employees, excluding Mr. Adent, was $45,291;
• Mr. Adent’s total compensation was $5,325,174;
• The ratio of Mr. Adent’s compensation to the compensation of the median employee was 118:1.
The Pay Ratio disclosure presented above is a reasonable estimate. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, the Pay Ratio Disclosure may not be comparable to the ratio reported by other companies.
44
COMPENSATION OF DIRECTORS
This table sets forth information regarding compensation paid during fiscal 2023 to Directors who were not employees.
Name |
|
Fees Earned |
|
|
Equity-Based Awards (1) |
|
|
Total |
|
|||
William T. Boehm, Ph.D. |
|
$ |
70,000 |
|
|
$ |
165,000 |
|
|
$ |
235,000 |
|
James C. Borel |
|
|
97,500 |
|
|
|
165,000 |
|
|
|
262,500 |
|
Jeffrey D. Capello |
|
|
36,250 |
|
|
|
165,000 |
|
|
|
201,250 |
|
Ronald D. Green, Ph.D. |
|
|
66,250 |
|
|
|
165,000 |
|
|
|
231,250 |
|
Aashima Gupta |
|
|
35,000 |
|
|
|
165,000 |
|
|
|
200,000 |
|
Raphael A. Rodriguez |
|
|
60,000 |
|
|
|
165,000 |
|
|
|
225,000 |
|
James P. Tobin |
|
|
67,500 |
|
|
|
165,000 |
|
|
|
232,500 |
|
Darci L. Vetter |
|
|
66,250 |
|
|
|
165,000 |
|
|
|
231,250 |
|
Catherine E. Woteki, Ph.D. |
|
|
60,000 |
|
|
|
165,000 |
|
|
|
225,000 |
|
The following table sets forth the fiscal 2023 compensation cost recognized for fiscal 2023 equity-based awards to directors and compensation cost recognized for equity-based awards granted in prior years.
Option and RSU Awards
Name |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Total |
|
|||||
William T. Boehm, Ph.D. |
|
$ |
32,987 |
|
|
$ |
19,651 |
|
|
$ |
20,796 |
|
|
$ |
5,616 |
|
|
$ |
79,050 |
|
James C. Borel |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
5,616 |
|
|
|
79,050 |
|
Jeffrey D. Capello |
|
|
32,987 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32,987 |
|
Ronald D. Green, Ph.D. |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
5,616 |
|
|
|
79,050 |
|
Aashima Gupta |
|
|
32,987 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32,987 |
|
Raphael A. Rodriguez |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
— |
|
|
|
73,434 |
|
James P. Tobin |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
5,616 |
|
|
|
79,050 |
|
Darci L. Vetter |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
5,616 |
|
|
|
79,050 |
|
Catherine E. Woteki, Ph.D. |
|
|
32,987 |
|
|
|
19,651 |
|
|
|
20,796 |
|
|
|
— |
|
|
|
73,434 |
|
The grant-date fair value of the stock option and RSU awards granted in fiscal 2023, the compensation cost recognized for fiscal 2023 grants, and outstanding equity awards at May 31, 2023, were:
|
|
Grant Date Fair Value based on Codification |
|
|
Compensation Cost Recognized |
|
|
Outstanding at May 31, 2023 |
|
|||||||
Name |
|
Topic 718 for 2023 Grants |
|
|
for 2023 Grants |
|
|
RSU Awards |
|
|
Option Awards |
|
||||
William T. Boehm, Ph.D. |
|
$ |
165,000 |
|
|
$ |
32,987 |
|
|
|
6,968 |
|
|
|
66,667 |
|
James C. Borel |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
58,501 |
|
Jeffrey D. Capello |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,212 |
|
|
|
18,416 |
|
Ronald D. Green, Ph.D. |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
62,947 |
|
Aashima Gupta |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,212 |
|
|
|
18,416 |
|
Raphael A. Rodriguez |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
25,167 |
|
James P. Tobin |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
58,501 |
|
Darci L. Vetter |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
50,501 |
|
Catherine E. Woteki, Ph.D. |
|
|
165,000 |
|
|
|
32,987 |
|
|
|
6,968 |
|
|
|
25,167 |
|
45
Due to the completion of the 3M Food Safety transaction, Board compensation was adjusted to reflect the increased size and complexity of the business. Directors receive an annual retainer of $55,000 (paid quarterly), with the Chair of the Board paid an additional $55,000. Members of the Governance, Compensation and Innovation, Science and Technology committees are paid $7,500 annually, while members of the Audit Committee receive $10,000 annually. The Chair of the Governance, Compensation and Innovation, Science and Technology committees are paid an additional $7,500 annually, while the Chair of the Audit Committee is paid an additional $10,000 annually. Board members receive an additional $165,000 in equity-based compensation, split equally between non-qualified options to purchase Company stock, with three-year vesting and seven-year lives, and restricted stock units, with three-year vesting. These awards are granted on the date of election to, or commencement of annual service on, the Board.
AUDIT COMMITTEE REPORT
The undersigned constitute the Audit Committee of the Board of the Company. The Audit Committee serves in an oversight capacity and is not intended to be part of the Company’s operational or managerial decision-making process. Management is responsible for the preparation, integrity and fair presentation of information in the consolidated financial statements, the financial reporting process and internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for performing independent audits of the consolidated financial statements and an audit of management’s assessment of internal control over financial reporting. The Audit Committee monitors and oversees these processes. The Audit Committee also approves the selection and appointment of the Company’s independent registered public accounting firm and recommends the ratification of such selection and appointment to the shareholders.
In this context, the Audit Committee met and held discussions with management and BDO, the Company’s independent registered public accounting firm, throughout the year and regularly reported the results of its activities to the Board. Specifically, the following were completed:
Based on the above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s fiscal year 2023 Annual Report on Form 10-K for filing with the SEC and the Company’s 2023 Annual Report to shareholders.
Submitted by:
William T. Boehm, Ph.D. (Chair)
James C. Borel
Jeffrey D. Capello
James P. Tobin
Members of the Audit Committee
46
ADDITIONAL INFORMATION
Shareholder Proposals for the 2024 Annual Meeting
Shareholder proposals intended to be presented at the 2024 Annual Meeting of shareholders and that a shareholder would like to have included in the Proxy Statement and form of proxy relating to that meeting must be received by the Company at its principal executive offices at 620 Lesher Place, Lansing, Michigan 48912 for consideration no later than May 18, 2024 to be considered for inclusion in the proxy statement and form of proxy related to that meeting. Such proposals of shareholders should be made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934.
Under the Company’s Bylaws, proposals of shareholders intended to be submitted to a formal vote (other than proposals to be included in our proxy statement) at the 2024 Annual Meeting may be made only by a shareholder of record who has given notice of the proposal to the Secretary of the Company at our principal executive offices no earlier than 90 days and no later than 60 days prior to the anniversary of the preceding year’s annual meeting; provided, however that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date or if the Company has not previously held an annual meeting, notice by the shareholder to be timely must be given no earlier than 90 days prior to such annual meeting and no later than 60 days prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. The notice must contain certain information as specified in our Bylaws. In addition, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19(b) of the Exchange Act, to the extent applicable. Assuming that our 2024 Annual Meeting is not advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the 2023 Annual Meeting, we must receive notice of an intention to introduce a nomination or other item of business at the 2024 Annual Meeting after July 27, 2024, and no later than August 26, 2024.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires directors, executive officers and beneficial owners of more than 10% of the Company’s common stock, among others, to file reports with respect to changes in their ownership of common stock. During fiscal 2023, based solely on review of the insiders' forms filed with the SEC during the fiscal year and written representations made by the directors and executive officers, none of the directors, executive officers and 10% shareholders of the Company failed to comply with the requirements of Section 16(a), except for the exceptions listed. There was a late Form 4 filed on behalf of Douglas Jones and James Borel. Both were to report the purchase of common stock.
Other Actions
At this time, no other matter other than those referred to above is known to be brought before the Annual Meeting. If any additional matter(s) should properly come before the Annual Meeting, it is the intention of the persons named in the enclosed proxy to vote said proxy in accordance with their judgment on such matter(s).
Notice of Internet Availability of Proxy Materials
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on October 25, 2023. See http://www.neogen.com/en/investor-information for a copy of the 2023 proxy statement and Annual Report.
47
Householding of Annual Meeting Materials
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” Proxy Statements and Annual Reports. This means that only one copy of this Proxy Statement may have been sent to multiple shareholders in your household. If you would prefer to receive separate copies of a Proxy Statement or the Annual Report on Form 10-K for the fiscal year ended May 31, 2023, to Shareholders for fiscal 2023 either now or in the future, please contact your bank, broker or other nominee.
Expenses of Solicitation
The cost of solicitation of proxies for the Annual Meeting is being paid by the Company. In addition to solicitation by mail, proxies may be solicited by officers, directors and regular employees of the Company personally, by telephone or other means of communication. The Company will, upon request, reimburse brokers and other nominees for their reasonable expenses in forwarding the proxy material to the beneficial owners of the stock held in street name by such persons.
By Order of the Board,
Amy M. Rocklin
Corporate Secretary
September 18, 2023
48
Appendix A
NEOGEN CORPORATION
Neogen Corporation 2023 Omnibus Incentive Plan
(Effective , 2023)
49
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Stock or other Voting Securities outstanding, increases (x) the proportionate number of shares of Stock beneficially owned by any person to 40 percent or more of the shares of Stock then outstanding or (y) the proportionate voting power represented by the Voting Securities beneficially owned by any person to 40 percent or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any person referred to in clause (x) or (y) of this sentence shall thereafter become the beneficial owner of any additional shares of Stock or other Voting Securities (other than pursuant to a share split, share dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 40 percent or more of the combined voting power of all then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of the foregoing clause (i).
Notwithstanding anything else to the contrary contained in this Section 2(g) to the extent “Change in Control” is a payment trigger, and not merely a vesting trigger, for any 409A Award, a “Change in Control” shall not be deemed to have occurred unless such “Change in Control” is also a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, as described in Treas. Reg. Section 1.409A-3(i)(5).
50
A Participant shall not be deemed to be Disabled as a result of any condition that:
The Disability of a Participant and the date on which a Participant ceases to be employed by reason of Disability shall be determined by the Company, in accordance with uniform principles consistently applied, on the basis of such evidence as the Committee and the Company deem necessary and desirable, and its good faith determination shall be conclusive for all purposes of the Plan. The Committee or the Company shall have the right to require a Participant to submit to an examination by physicians and to submit to such reexaminations as the Committee or the Company shall require in order to make a determination concerning the Participant’s physical or mental condition; provided, however, that a Participant may not be required to undergo a medical examination more often than once each 180 days. If any Participant engages in any occupation or employment (except for rehabilitation as determined by the Committee) for remuneration or profit, which activity would be inconsistent with the finding of Disability, or if the Committee, on the recommendation of the Company, determines on the basis of a medical examination that a Participant no longer has a Disability, or if a Participant refuses to submit to any medical examination properly requested by the Committee or the Company, then in any such event, the Participant shall be deemed to have recovered from such Disability. Notwithstanding the foregoing, in the event a Participant is employed under a written employment agreement with the Company or one of its Affiliates which agreement includes a definition of “disability,” “disability” shall have the meaning set forth in such agreement; provided, however, to the extent such agreement is silent on any of the determination provisions set forth in this paragraph, such provisions shall apply.
The Committee in its discretion may revise this definition of “Disability” for any grant, except to the extent that the Disability is a payment event under a 409A Award, in which event the definition of “Disability” in Treas. Reg. Section 1.409A.-3(i)(4) shall apply and cannot be changed after the 409A Award is granted.
51
52
3. Administration
53
Notwithstanding the foregoing, neither the Committee nor the Board shall effect at any time directly or indirectly the repricing of any outstanding Options or SARs, including without limitation a repricing by (i) the cancellation of any outstanding Options or SARs under the Plan and the grant in substitution therefor of new Options, SARs or any other awards under the Plan covering the same or different amount of Shares, or (ii) the cancellation of any outstanding Options or SARs with respect to which the Option Price or SAR Exercise Price is above Fair Market Value in exchange for a cash payment. Further, subject to Section 12 hereof, all Awards shall have a minimum vesting period of one year from the Grant Date; provided that, all awards to up to 5% in the aggregate of the total Shares authorized to be issued under the Plan may have a vesting period of less than one year.
Any dividends and/or dividend equivalents credited in connection with an award that is not yet vested shall be subject to the same restrictions and risk of forfeiture as the underlying portion of the award to which such dividends and/or dividend equivalents relate and shall not be paid until that underlying portion of the award vests.
Unless otherwise specified in an Award Agreement, the Company retains the right to cause a forfeiture of any Award, or the gain realized by a Participant in connection therewith, on account of actions taken by the Participant in violation or breach of or in conflict with any employment agreement, non-competition agreement, any agreement prohibiting solicitation of employees or customers of the
54
Company or its Affiliates, any confidentiality obligation with respect to the Company or its Affiliates, or any other policy of or agreement with the Company or its Affiliates, or as otherwise permitted by applicable laws and regulations, including but not limited to, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules and regulations promulgated under each respective act.
c. All such actions and determinations shall be made in accordance with the Company’s governing documents and applicable law. Subject to the governing documents of the Company and applicable law, the Committee may delegate all or any portion of its authority under the Plan to a subcommittee of members of the Board and/or officers of the Company for the purposes of determining or administering Awards granted to persons who are not then subject to the reporting requirements of Section 16 of the Exchange Act. The Committee’s prior exercise of discretionary authority shall not obligate it to exercise its authority in a similar fashion thereafter.
4. Stock Available.
55
5. Award Eligibility and Limitations.
a. General Rule. Awards under the Plan may be granted to any Eligible Person, provided that only Employees shall be eligible to receive Incentive Stock Options. Awards may be granted to Eligible Persons whether or not they hold or have held Awards previously granted under the Plan or otherwise granted or assumed by the Company. In selecting Eligible Persons for Awards, the Committee may take into consideration any factors it may deem relevant, including its views of the Eligible Person’s present and potential contributions to the success of the Company and its Affiliates.
b. Limitations. During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, the number of Shares that may be granted in the form of any type of Award under this Plan in a single fiscal year to a Participant may not exceed 1,000,000 Shares, subject to adjustment as provided in Section 13, and excluding any Substitute Awards or other Awards described in Section 4(b)(iv) above. For avoidance of doubt, the maximum limit described in the immediately preceding sentence shall separately apply to Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, and Other Stock and Stock Unit Awards under Section 10 below. Further, notwithstanding anything in the Plan to the contrary, the aggregate Fair Market Value on the Grant Date (computed as of such Grant Date in accordance with applicable financial accounting rules) of all Awards granted to any non-employee director of the Company during any single fiscal year shall not exceed $500,000; provided, however, that such limit shall not apply to any election of a non-employee Director to receive an Award in lieu of all or a portion of any annual committee cash retainers or other similar cash-based payments. Shares issuable under the Plan will be Shares of authorized but unissued or reacquired Shares, including Shares repurchased by the Company on the open market or otherwise.
6. Stock Options.
56
57
7. Stock Appreciation Rights.
58
Notwithstanding any other provision of the Plan to the contrary, a Tandem SAR shall expire no later than the expiration of the Related Option and shall be exercisable only when the Related Option is eligible to be exercised. In addition, if the Related Option is an ISO, a Tandem SAR shall be exercised for no more than 100% of the difference between the Fair Market Value of Shares subject to the Related Option at the time the Tandem SAR is exercised and the Option Price of the Related Option.
Payment to the Participant shall be made in Shares, valued at the Fair Market Value of the date of exercise, in cash, or a combination thereof, as the Committee may provide in the Award Agreement. To the extent required to satisfy the conditions of Rule 16b-3(e), or as otherwise provided in the Award Agreement, the Committee shall have the sole discretion to consent to or disapprove the election of any Participant to receive cash in full or partial settlement of an SAR. In cases where an election of settlement in cash must be consented to by the Committee, the Committee may consent to, or disapprove, such election at any time after such election, or within such period for taking action as is specified in the election, and failure to give consent shall be disapproval. Consent may be given in whole or as to a portion of the SAR surrendered by the Participant. If the election to receive cash is disapproved in whole or in part, the SAR shall be deemed to have been exercised for Shares, or, if so specified in the notice of exercise and election, not to have been exercised to the extent the election to receive cash is disapproved.
59
8. Restricted Stock and Restricted Stock Units.
“The sale or other transfer of the shares of Stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Neogen Corporation 2023 Omnibus Incentive Plan, effective October 25, 2023, and in any related Restricted Stock Agreement. A copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary of Neogen Corporation.”
60
9. Performance Awards.
61
10. Other Stock and Stock Unit Awards.
62
11. Effect of Termination of Employment or Service on Awards; Forfeiture.
12. Change in Control.
Except as otherwise provided in an Award Agreement or a separate plan document or agreement between the Company and a Participant, in the event of a Change in Control or immediately prior to a Change in Control of the Company, and except with respect to any Award assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board, the Committee, in its sole discretion, or as otherwise set forth in an Award Agreement, may take such actions as it deems appropriate to provide for the acceleration of the exercisability and vesting in connection with such Change in Control of any or all outstanding Awards upon such conditions and to such extent as the Committee shall determine. To the extent that this provision causes ISOs to exceed the dollar limitation set forth in Section 422(d)of the Code, the excess Options shall be deemed to be Non-Qualified Stock Options. With respect to Awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control, if within one year after the effective date of a Change in Control, a Participant’s employment or service is terminated without Cause or by the Participant with good reason, then any time-based vesting restrictions on outstanding Awards shall lapse and there shall be a payout to the Participant within 30 days after the termination date. To the extent that this provision causes ISOs to exceed the dollar limitation set forth in Section 422(d) of the Code, the excess Options shall be deemed to be Non-Qualified Stock Options. No action shall be taken under this Section 12 which shall cause an Award to fail to be exempt from or comply with Section 409A of the Code or the treasury regulations thereunder.
13. Adjustment for Changes in Stock Subject to Plan and Other Events.
In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering, or any other change in the corporate structure or Shares of the Company, the Committee shall make such adjustments, if any, as it deems appropriate in the number and kind of Shares subject to the Plan, in the number and kind of Shares covered by outstanding Awards, in the Option price per Share of outstanding Options or the SAR Exercise Price of outstanding SARs, and in the maximum number of Shares that may be issued to any Participant pursuant to Awards made under the Plan. If the adjustment would produce fractional Shares with respect to any then outstanding Awards, the Committee may adjust appropriately the number of Shares covered by the outstanding Awards so as to eliminate the fractional Shares. Any adjustment made under this Section 13 shall be done in a manner that complies with Section 409A of the Code, and any adjustments made with respect to Incentive Stock Options shall comply with Sections 422 and 424 of the Code.
63
14. Other Terms and Conditions.
The Committee may impose such other terms and conditions, not inconsistent with the terms hereof, on the grant, vesting or exercise of Awards or issuance of Shares in connection therewith, as it deems advisable.
15. Effectiveness of Plan.
This Plan will be effective upon the approval by a majority of the votes cast by the shareholders of the Company at a meeting of shareholders duly called and held for such purpose within twelve months of adoption of this Plan by the Board. Only Options may be granted prior to such shareholder approval, and such Options may not be exercisable prior to such shareholder approval.
16. Amendment, Modification, and Termination of Plan.
17. Withholding.
To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, it shall be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of all such taxes required to be withheld. Unless the Committee otherwise agrees in an Award Agreement or otherwise, a portion of any grant or award shall, at the time that the same becomes taxable to the Participant, be relinquished to the Company to satisfy the Participant’s federal tax withholding requirement. The Fair Market Value of any Shares (determined at the date of withholding) withheld or tendered to satisfy any such tax withholding obligations may not exceed the amount determined using the applicable maximum statutory tax withholding rates. For the avoidance of doubt, the Participants shall have no legal right to own or receive any Shares withheld from delivery for such purpose, and otherwise shall have no rights in respect of such Shares whether as a shareholder or otherwise. The Company shall have the power and the right to deduct or withhold from any other payments due to a Participant, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment under or as a result of this Plan.
18. Successors.
All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the relevant business and/or assets of the Company.
64
19. Section 409A of the Code.
Subject to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A of the Code or other applicable guidance, the term “Short-Term Deferral Period” means the period ending on the later of (i) the date that is 2 1/2 months from the end of the Company’s fiscal year in which the applicable portion of the Award is no longer subject to a “substantial risk of forfeiture”, or (ii) the date that is 2 1/2 months from the end of the Participant’s taxable year in which the applicable portion of the Award is no longer subject to a substantial risk of forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning set forth in any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A of the Code or other applicable guidance.
65
20. Dividends and Dividend Equivalents.
Dividends or dividend equivalents can be paid with respect to any Award, except SAR or Options; provided, however, that (i) no dividends or dividend equivalents may be paid with respect to such shares before the date such shares have vested, (ii) any dividend or dividend equivalents that are credited with respect to such shares will be subject to all of the terms and conditions applicable to such shares under the applicable Award Agreement, and (iii) any dividends or dividend equivalents that are credited with respect to such shares will be forfeited to the Company on the date, if any, such share are forfeited to or repurchased by the Company due to failure to meet any vesting conditions under the applicable Award Agreement.
21. General.
66
67
68
* * *
As adopted and approved by the Board on July 19, 2023, subject to approval by the shareholders of the Company.
69
NEOGEN® CORPORATION NEOGEN CORPORATION ATTN: AMY M. ROCKLIN 620 LESHER PLACE LANSING, MI 48912 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on October 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on October 22, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/NEOG2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on October 24, 2023 for shares held directly and by 11:59 p.m. Eastern Time on October 22, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V22472-P97240 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NEOGEN CORPORATION The Board of Directors recommends you vote FOR the listed nominees: 1. Election of Directors Nominees: 01) Aashima Gupta 02) Raphael A. Rodriguez 03) Catherine E. Woteki, Ph.D. For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the following proposals 2, 4 and 5 and 1 Year on proposal 3: 2. To Approve, by Non-Binding Vote, the Compensation of Executives. 3. Advisory vote on the frequency of holding future advisory votes to approve our named executive officers' compensation. 4. To Approve the Establishment of the Neogen Corporation 2023 Omnibus Incentive Plan. 5. Ratification of Appointment of BDO USA P.A. as the Company’s Independent Registered Public Accounting Firm. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For Against Abstain 1 Year 2 Years 3 Years Abstain For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. V22473-P97240 PROXY NEOGEN CORPORATION ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 25, 2023 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Amy M. Rocklin, with full power to appoint her substitutes, attorney and proxy to represent the shareholder and to vote and act with respect to all shares that the shareholder would be entitled to vote on all matters which come before the Annual Meeting of Shareholders of Neogen Corporation to be held at 10:00 AM, ET on October 25, 2023, virtually at www.virtualshareholdermeeting.com/NEOG2023, referred to above and at any adjournment of that meeting. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATIONS ARE MADE, THE SHARES WILL BE VOTED FOR PROPOSALS 1, 2, 4 AND 5 AND 1 YEAR ON PROPOSAL 3 ON THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS ON ANY MATTER NOT OTHERWISE COVERED HEREBY, INCLUDING SUBSTITUTION OF DIRECTOR NOMINEES, WHICH MAY COME BEFORE THE MEETING. (Continued and to be signed on reverse side)