SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

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☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant toUnder Section240.14a-12

Neogen Corporation

 

 

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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LOGO

August 27, 201931, 2020

To Our Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders of Neogen Corporation on Thursday, October 3, 2019,8, 2020, at 10:00 a.m. Eastern Time. TheDue to the public health impact of the COVID-19 pandemic, the 2020 Annual Meeting of Shareholders will be held ata completely virtual meeting conducted via webcast. You will be able to participate in the University Club of Michigan State University, located at 3435 Forest Road, Lansing, Michigan 48910.meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/NEOG2020.

The Annual Meeting will feature a report on Neogen’s business activities, voting on the election of directors and other important proposals. We also will have product displays and product demonstrations by Company personnel. On the following pages you will find the noticeNotice of the 2020 Annual Meeting of Shareholders and the proxy statement.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 sign, date and return the enclosed proxy cardvote your shares as soon aspossible. using one of the multiple methods listed in the Notice or Proxy Statement. Sending a proxy card will not affect your right to vote in person if you attend the meeting.meeting virtually.

Sincerely,

 

LOGO

John E. Adent

President & Chief Executive Officer

 

Your vote is important. Even if you plan to attend the meeting virtually,

PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARDVOTE YOUR SHARES PROMPTLY.

LOGO

620 Lesher Place

Lansing, MI 48912

NOTICE OF 20192020 ANNUAL MEETING OF SHAREHOLDERS OF NEOGEN CORPORATION

Date:

October 3, 2019

Time:

10:00 a.m., Eastern Time

Place:

The University Club of Michigan State University, 3435 Forest Road, Lansing, Michigan 48910

ItemsYou are cordially invited to attend the Annual Meeting of Business:Shareholders of Neogen Corporation on Thursday, October 8, 2020, at 10:00 a.m. Eastern Time. Due to the public health impact of the COVID-19 pandemic, the 2020 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/NEOG2020.

 

1.

When:

Thursday October 8, 2020 at 10:00 Eastern Time

Where:

Webcast at www.virtualshareholdermeeting.com/NEOG2020

Items of Business:

1.  The election of three Class IIIII directors, each to serve for a three yearthree-year term or until his or her successor has been duly elected and qualified;

  

2.

To approve, bynon-binding vote, the compensation of the Company’sour named executive officers;

  

3.

To ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2020;2021; and

  

4.

To act upon such other business as may properly come before the meeting or any adjournment or postponement thereof.

Who can vote:

Holders of Neogen common shares at the close of business on the record date of August 11, 2020 are entitled to notice of, and to vote at, the meeting.

How to Vote:

Your vote is important! Please vote your shares in one of the following ways:

1.  Via the internet, by visiting www.proxyvote.com.

2.  By telephone, by calling the number on your proxy card, voting instruction form or notice.

3.  By mail, by marking, signing, dating and mailing your proxy card. No postage is required if mailed in the United States.

4.  By voting electronically during the virtual Annual Meeting at www.virtualshareholdermeeting.com/NEOG2020.

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.

Attending the Meeting:

Shareholders holding shares at the close of business on the record date may attend the virtual 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/NEOG2020. To participate in the meeting, you must have the sixteen digit control number that is shown on your proxy card. You will not be able to attend the Annual Meeting in person.

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice.

All shareholders are cordially invited to attend During the meeting. At thevirtual meeting, youwe will hearpresent a report on the Company’s business and have a chanceprovide you an opportunity to virtually meet the directors and executive officers. A copy of the 2019our 2020 Annual Report is enclosed.

Only shareholders of record at the close of business on August 6, 2019 are entitledWe appreciate your continued confidence in Neogen, and look forward to notice of, and to vote at, the meeting.

Your vote is important. Please vote your shares promptly, even if you plan to attend the Annual Meeting. Complete, sign, date and return your proxy card to vote your shares.Any shareholder attending theparticipation in our virtual Annual Meeting may vote in person even if he or she previously returned a proxy..

 

LOGO

Steven J. Quinlan

Secretary

August 27, 201931, 2020

TABLE OF CONTENTS

 

   Page 

General Information

   1 

Proposal 1—Election of Directors

   4 

Proposal 2—To approve, bynon-binding vote, the compensation of executives

   8 

Proposal 3—Ratification of the appointment of the Company’s independent registered public accounting firm

   9 

Security Ownership of Certain Beneficial Owners, Directors and Management

   10 

Information about the Board and Corporate Governance Matters

   1112 

Compensation Discussion and Analysis

   1415 

Compensation Committee Report

   2021 

Executive Compensation

   2122 

CEO Pay Ratio

   2425 

Compensation of Directors

   2526 

Audit Committee Report

   2728 

Additional Information

   28 

Neogen Corporation

620 Lesher Place

Lansing, MI 48912

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

October 3, 20198, 2020

GENERAL INFORMATION

TheseWe are providing this notice and proxy materials are providedstatement 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”) of proxies to be usedfor use at the Annual Meeting of Shareholders (the “Annual Meeting”) of Neogen Corporation (the “Company”) to be held on Thursday, October 3, 20198, 2020 at 10:00 a.m., Eastern Time, at the University Club of Michigan State University, located at 3435 Forest Road, Lansing, Michigan 48910, and at any adjournment of the meeting. The Annual Meeting will be held virtually and can be accessed online at www.virtualshareholdermeeting.com/NEOG2020.

Due to the COVID-19 pandemic, for the safety of all our shareholders, employees and community, our 2020 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 arewere first being sentfurnished to shareholders on or about August 30, 2019.31, 2020.

There are three proposals scheduled to be voted on at the Annual Meeting:

 

Proposal to elect three Class IIIII directors to the Board, each to serve for a three yearthree-year term or until his or her successor has been duly elected and qualified;

 

Proposal to approve, bynon-binding vote, the compensation of the Company’sour named executive officers; and

 

Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2020.2021.

Revocation of Proxies

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 the Companyour Secretary, by delivering to theour Secretary a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person.virtually.

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, which are set forth with the discussion of each matter later in this Proxy Statement. 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.

In summary, the Board recommends that you vote:

 

FOR the election of the nominees for directors to the Board;

 

FOR the proposal to approve, bynon-binding vote, the compensation of the Company’sour named executive officers; and

 

FOR ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2020.2021.

All shareholders at the close of business on August 6, 2019,11, 2020, the record date for the meeting, are entitled to vote at the meeting. On August 6, 201911, 2020 there were 52,378,78353,031,168 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 at that time.

If you are a shareholder of record, you may vote by mail by completing, dating and signing your proxy card and mailing itshares in one of the following ways:

1.

Via the internet, by visiting www.proxyvote.com.

2.

By telephone, by calling the number on your proxy card, voting instruction form, or notice.

3.

By mail, by marking, signing, dating and mailing your proxy card. No postage is required if mailed in the United States.

4.

By voting electronically during the Virtual Annual Meeting at www.virtualshareholdermeeting.com/NEOG2020.

To participate in the envelope provided. You should signAnnual Meeting, you will need to provide the 16-digit control number included on your name exactly as it appears on the proxy card. If you do wish to participate in the Annual Meeting, please log on to www.virtualshareholdermeeting.com/NEOG2020 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/NEOG2020 until the 2021 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.

We are signingcommitted to ensuring that our shareholders have substantially the same opportunities to participate in a representative capacity (for example,the virtual Annual Meeting as officer of a corporation, guardian, executor, trustee or custodian) you should indicate your name and title or capacity. You may also vote via the internet or telephone. Your proxy card will contain instructions for voting utilizing either of these methods.

You may also vote in personthey would at an in-person meeting. Each year at the Annual Meeting, orwe hold a question-and-answer session following the formal business portion of the meeting, during which shareholders may be represented by another personsubmit questions to us. We anticipate having such a question-and-answer session at the 2020 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 after designating that person by executing a proper proxy.

If your shares are heldand our prepared statements, in a stock brokerage account or by a bank or other holderadvance of record, you are considered the beneficial owner of shares held in “street name.” As the beneficial owner, you will receive instructions from the street name holder that you must followquestion-and-answer session, in order to have your shares voted.ensure that there is adequate time to address questions in an orderly manner.

If your shares are held in street name and you wishIn order to vote in personsubmit 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. Once you have logged into the webcast at www.virtualshareholdermeeting.com/NEOG2020, 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 you must obtain a proxy issued in your name fromduring the street name holder.check-in or meeting time, please call the technical support line number that will be posted on the virtual Annual Meeting login page.

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.

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.

A brokernon-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 New York Stock Exchange (the “NYSE”) rules and regulations, brokers have the discretion to vote on routine matters, such as the ratification of the appointment of the Company’s independent auditors. TheWe believe the other proposals may not be considered routine matters under applicable NYSE rules.

It is important that you instruct your broker how to vote shares held by you in street name using the votevoting 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 informationinstructions provided to you by your broker.

A majority of the outstanding shares entitled to vote, present in personattendance virtually or by proxy, shall constitute a quorum at the Annual meeting.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, brokernon-votes and other shares not voted will be counted as not cast.

The proposals to approve the compensation of the Company’sour named executive officers and to ratify the appointment of BDO USA, LLP as the independent registered public accounting firm for the 20202021 fiscal year will be approved if a majority of the votesvote cast at the meeting are voted in favor of such proposal. Abstentions, brokernon-votes and other shares not voted will be counted as not cast.

As to the election of directors to the Board, the three Class IIIII nominees who receive the greatest number of votes will be elected to a three yearthree-year term. In accordance with the Company’s 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”) shall 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”) shall 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 tore-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 Exchange Commission (the “SEC”) or NasdaqNASDAQ Global Select Market (“Nasdaq”NASDAQ”), and the Company’s 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.

PROPOSALS FOR SHAREHOLDER ACTION

PROPOSAL 1—ELECTION OF DIRECTORS

The Company’s Bylaws provide that the Company shall have at least five and no more than nine directors, with the exact number to be determined by the Board. The Board is currently comprised of eight directors, and the size of the Board will increase to nine directors.following the Annual Meeting. 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.

Unless otherwise instructed, proxy holders will vote the proxies received by them for the election of the nominees named below. TwoJames L. Herbert, who has been a director of the Company since 1982, has announced that he will not stand for re-election to the Board. Of the three nominees for director, areG. Bruce Papesh is currently directorsa director of the Company. Jack Parnell, a director since 1993, has elected to not stand for reelection at the expiration of his term this year. John Adent, the Company’s PresidentRalph A. Rodriguez and Chief Executive Officer, hasCatherine E. Woteki, Ph.D. have each been nominated as a director.by the Governance Committee for Board positions for the first time; their biographies, along with those of the current directors, follow. 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 majority vote of a majority of the directors then in office for the full term of the class in which the vacancy occurs.

 

Nominees

  Expiration of
Proposed Term		 

Class III:

G. Bruce Papesh

2023

Ralph A. Rodriguez

2023

Catherine E. Woteki, Ph.D.

2023

Directors continuing in office

Expiration of
Term

Class I:

James C. Borel

2021

Ronald D. Green, Ph.D.

2021

Darci L. Vetter

2021

Class II:

  

John E. Adent

   2022 

William T. Boehm, Ph.D.

   2022 

James P. Tobin

   2022 

Directors continuing in office

Expiration of
Term

Class III:

James L. Herbert

2020

G. Bruce Papesh

2020

Thomas H. Reed

2020

Class I:

James C. Borel

2021

Ronald D. Green, Ph.D.

2021

Darci L. Vetter

2021

 

Name of Director

  Age   

Position

  Director
Since		   Age   

Position

  Director
Since		 

James L Herbert

   79   Chairman of the Board   1982 

John E. Adent

   51   President, CEO and nominee for election as Director   n/a    52   Chief Executive Officer & Director   2019 

William T. Boehm, Ph.D. (3*)

   72   Director   2011    73   Director   2011 

James C. Borel (2) (3)

   63   Director   2016 

James C. Borel (2*) (3) (4)

   64   Chairman of the Board   2016 

Ronald D. Green, Ph.D. (1*) (4)

   58   Director   2014    59   Director   2014 

G. Bruce Papesh (4*)

   72   Director   1993    73   Director   1993 

Jack C. Parnell (1) (2*) (4) (5)

   84   Director   1993 

Thomas H. Reed (2) (3)

   74   Director   1995 

James P. Tobin (1) (4)

   63   Director   2016 

Ralph A. Rodriguez

   52   Nominee   —   

James P. Tobin (1) (3) (4)

   64   Director   2016 

Darci L. Vetter (1) (4)

   45   Director   2017    46   Director   2017 

Catherine E. Woteki, Ph.D.

   72   Nominee   —   

 

(1)

Member, Compensation Committee

(2)

Member, Stock Option Committee

(3)

Member, Audit Committee

(4)

Member, Governance Committee

(5)

Lead Independent Director

* - Denotes Chairperson of Committee

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 current members of the Board.Board who will remain in office.

Nominees for the Board of Directors:

G. Bruce Papesh was first elected to the Board in October 1993 and was the Company’s Secretary from October 1994 to October 1999. From 1987 to 2020, Mr. Papesh served as President of Dart, Papesh & Company, Inc., which until 2019 was a SIPC and FINRA member and an investment consulting and financial services firm. Mr. Papesh also served until October 1, 2001 on the board of directors of Immucor, Inc., an immunodiagnostics company that manufactures and markets products for the human clinical blood bank industry. Mr. Papesh has experience in the investment securities industry and in financial analysis which contributes greatly to the Board.

Ralph A. Rodriguez is an executive-in-residence at Summit Partners, a global private equity firm based in Boston, Massachusetts. Mr. Rodriguez works with Summit’s technology team to identify new investment opportunities within growth-stage technology companies. Prior to joining Summit in October 2019, he was a research scientist at Facebook from March 2018 to September 2019, where he led Applied Identity and Intelligence. From 2015-2018, he was the co-founder and CTO of Confirm.io, an ID authentication company, which Facebook acquired in March 2018. Prior to Confirm.io, Mr. Rodriguez founded: Blue Hill Research, a global IT market research firm; cybersecurity companies Delfigo Security and Invenio; and NTA, a patent, copyright and trademark licensing and research firm. He also served as a public company CTO/CIO at Brooks Automation, C-bridge Internet Solutions and Excelon Corporation. As the longest-serving ASP Fellow at the Massachusetts Institute of Technology, he pioneered research on artificial intelligence, cloud, mobile, neural science and security technologies at the MIT Media Lab and Harvard-MIT Health Sciences and Technology departments. He currently serves on the Boards of Corvium and Strategic Cyber Ventures. Previously, he served as a director at the Academy of Applied Science, Veramark Technologies and the Technology Expense Management Industry Association. Mr. Rodriguez is a U.S. Army intelligence veteran of the Persian Gulf War in 1990, a life member of the Veterans of Foreign Wars, as well as a holder of 20 U.S. patents and international patent applications. His extensive technological knowledge and experience will bring significant value to the Board.

Dr. Catherine E. Woteki, Ph.D. holds positions as Professor of Food Science and Human Nutrition at Iowa State University since July 2017 and Visiting Distinguished Institute Professor in the Biocomplexity Institute of the University of Virginia since April 2019. 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 the 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 will bring experience in regulatory science and science policy to the Board.

The Board of Directors recommends a vote “FOR” the above nominees.

Other current members of the Board who will remain in office:

John E. Adentjoined the Company as Chief Executive Officer on July 17, 2017, and was also named President on September 22, 2017. Prior to joining the Company, Mr. Adent served as the Chief Executive Officer of Animal Health International, Inc., formerly known as Lextron, Inc., from 2004 to 2015, also serving as its President and CEO during that time. Animal Health International was sold to Patterson Companies, Inc. in 2015, and Mr. Adent served as the Chief Executive Officer of the $3.3 billion Animal Health Division of Patterson Animal Health from that period until his resignation on July 1, 2017. Mr. Adent began his career with management responsibilities for Ralston Purina Company, developing animal feed manufacturing and sales

operations in China and the Philippines. When Ralston Purina spun off that business to Agribrands, he continued his management role in the European division in Spain and Hungary, serving as managing director of the Hungarian operations. Mr. Adent left Ralston Purina in 2004. Mr. Adent’s industryHis leadership, strategic thinking, and significant management experience in world markets provide value and leadership skills make him well qualifiedinsight to serve on the Board.

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 President Carter.Presidents Carter and Reagan. Dr. Boehm joined The Kroger Co. in 1981 as Director of Economic Research and held positions of increasing responsibility with that company until his retirement in 2008. During the 1990’s, he held senior executive positions in both Procurement and Logistics and was made Senior Vice President and a Corporate Officer. In 2004, Dr. Boehm was promoted to President of the Kroger Manufacturing Division.Division where he had responsibility for 35 food manufacturing plants and approximately 6,000 associates. He served on the board of Greatwide Logistics a logistics services company, from 2009-20152009 to 2015 and currently serves on the boards of FLM/FLM Harvest, a food industry strategic planning, issues management and advertising firm, working exclusively with farm and food clients, and GLK Foods, a producer, processor and marketer of specialty food products including sauerkraut. 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 spent more than 31 years with Monsanto, beginning his career there in 1983 and holding leadership roles across the company, including positions in sales management, marketing, new product development, seed integration and industry affairs. His last leadership role, prior to retirement in 2014, was Vice President, Industry Affairs. Mr. Tobin has worked to advance agriculture through leadership roles in key organizations, including serving as Chairman of the American Seed Trade Association from 2005 to 2006. He has also supported youth in agriculture, focusing on leadership development through his work with the Missouri and National4-H Foundations. Mr. Tobin is a Governor for the Iowa State University Foundation, a past board member of the U.S. Grain Council, a past board member and chairman of the FarmHouse Fraternity Foundation and a member of the Farm Foundation Roundtable. He currently serves as a managing director of The Yield Lab II, a St. Louis based fund investing in agricultural startups. His knowledge of the agricultural industry and his business acumen bring significant value to the Board.

The Board of Directors recommends a vote “FOR” the above nominees.

Other current members of the Board:

James C. (Jim) Borel retired in 2016 from DuPont, where he was Executive Vice President since 2009 and a member of DuPont’sthe 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 has over 40 years of experience in the agriculture and food industries, with extensive international experience including three assignments abroad and responsibilities extending beyond the U.S. for over 25 years. Mr. Borel is a member of the board of directors of Farmers Edge, Aerofarms, Inc., JUST, Inc. and the Renewable Energy Group. He is also ona member of the board of advisors for Sajjan India, Ltd. and the boards of trustees offor the University of Delaware the Farm

Foundation,and the Alpha Gamma Rho Educational Foundation and the National4-H Council.Foundation. Mr. Borel is a National Association of Corporate Directors GovernanceBoard Leadership 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.

Dr. Ronald D. Green, Ph.D. was appointed Chancellor of the University of Nebraska-Lincoln in April 2016. 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 University, 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.

James L. HerbertP. Tobin is Chairman ofspent more than 31 years with Monsanto, beginning his career in 1983 and holding leadership roles across the Board of the Company,company, including positions in sales management, marketing, new product development, seed integration and Director of Strategic Growth. He had been the Chief Executive Officer and Chairman of the Board since 2006; he resigned as Chief Executive Officer on July 17, 2017, when John Adentindustry affairs. His last leadership role, prior to retirement in 2014, was named to that role. Prior to 2006, he had been President, Chief Executive Officer, and a director of the Company since he founded it in June 1982. Prior to joining the Company, he held the position of Corporate Vice President, of DeKalb Ag Research, a major agricultural genetics and energy company. HeIndustry Affairs. Mr. Tobin has management experienceworked to advance agriculture through leadership roles in animal biologics, specialized chemical research, medical instruments, aquaculture, animal nutrition, and poultry and livestock breeding and production, all of which contribute to the significant value that Mr. Herbert brings to the Board.

G. Bruce Papesh was elected to the Board in October 1993 and was the Company’s Secretary from October 1994 to October 1999. Since 1987, Mr. Papesh has served as President of Dart, Papesh & Company, Inc., member of SIPC and FINRA, an investment consulting and financial services firm. Mr. Papesh also served until October 1, 2001 on the board of directors of Immucor, Inc., an immunodiagnostics company that manufactures and markets products for the human clinical blood bank industry. Mr. Papesh has experience in the investment securities industry and in financial analysis which contributes greatly to the Board.

Jack C. Parnell was elected to the Board in October 1993 and was elected Chairman of the Board in October 2001. In 2006, Mr. Parnell resignedkey organizations, including serving as Chairman of the Board, but remained a director. Since 1991, heAmerican Seed Trade Association from 2005 to 2006. He has held the position of Governmental Relations Advisoralso supported youth in agriculture, focusing on leadership development through his work with the law firm of Kahn, SoaresMissouri and Conway in Sacramento, California. In 1989,National 4-H Foundations. Mr. Parnell was appointed by President George H. W. Bush to serve as Deputy SecretaryTobin is a Governor for the Iowa State University Foundation, a past board member of the U.S. Department of Agriculture. From 1983 to 1989, he served in three different senior governmental positions for the state of California, including SecretaryGrain Council, a past board member and chairman of the California Department of Food FarmHouse Fraternity Foundation

and Agriculture from 1987 to 1989. Mr. Parnell’s service in senior governmental positions in the state of California and U.S. Department of Agriculture allows him to uniquely advise the Board and management on matters of government relations and regulation. It is because of this experience as well as his general business knowledge that he is most valuable as a member of the Board. Mr. Parnell has advised the Company that he is not standing for reelection to the Board upon expirationFarm Foundation Roundtable. He currently serves as a managing director of his term this October.

Thomas H. Reed was elected to the BoardThe Yield Lab II, a St Louis based fund investing in October 1995 and served as the Company’s Secretary from October 1999 to October 2007. From 2009 to 2010 he was a consultant to the President of JBS Packerland North America. From 2003 to 2009, Mr. Reed was Senior Vice President of JBS Packerland, a beef processing company and its successor companies, Smithfield Foods, Beef Division, and JBS Packerland North America. Prior to assuming that position, he served as Vice President of Michigan Livestock Exchange Marketing, a

division of Southern States Cooperative, Inc. and prior to that as President and Chief Executive Officeragricultural startups. His knowledge of the Michigan Livestock Exchange. Mr. Reed is a former member of the board of directors of the National Livestock Producers Associationagricultural industry and is a former chairman of the Michigan State University Board of Trustees. Mr. Reed’s experience in animal processing and general agriculture provide insight andhis business acumen bring significant value to the Board.

Darci L. Vetter is General Manager and Vice Chair for Food, Agriculture and Trade at Edelman, a global communications firm. She previously served as an international trade consultant and Diplomat in Residence at the University of Nebraska-Lincoln. 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. Ms. Vetter received a B.A. from Drake University and an M.P.A. and Certificate in Science, Technology, and Environmental Policy from the Woodrow Wilson School of Public and International Affairs at Princeton University. Her experience in international trade and agriculture brings significant value to the Board.

PROPOSAL 2: TO APPROVE, BYNON-BINDING VOTE, THE COMPENSATION OF EXECUTIVES

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 express their approval of the compensation of Company executives, as disclosed in this Proxy Statement.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 ana non-binding 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 the “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 anon-binding advisory vote on the frequency of thesay-on-pay proposal held at the Company’sour 2017 Annual Meeting, of Shareholders, shareholders voted in favor of holdingsay-on-pay votes annually. In light of this result and other factors considered by the Board, the Board determined that the Company would hold advisorysay-on-pay votes on an annual basis until the next required advisory vote on such frequency, to be held no later than 2023.

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:

 

 • 

Independent Compensation Committee. Eight Six of our nineeight current directors are deemed independent pursuant to applicable NasdaqNASDAQ standards. Three of these independent directors serve on the Compensation Committee. Meetings of the Compensation Committee include executive sessions in which management is not present.

 • 

Performance-Based Incentives. Total compensation for executives is structured so that a significant portion of the total earning potential is derived from performance-based incentives.

 • 

Stock Options. A majority percentage of executives’ total compensation is paid in the form of stock options that vest over a five-year period. These stock awards help align the executives’ interests with longer term shareholder returns and also serve to help retain the services of executives.

 • 

No Severance Payments. If employment is terminated without cause, executives are not contractually entitled to “golden parachute” or other executive severance payments upon termination.

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 RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in the Company’s Proxy Statement for its 20192020 Annual Meeting of Shareholders.”

Vote Required

The proposal to approve the compensation of the Company’s named executive officers requires the affirmative vote of a majority of the votes cast on the proposal.

PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Company’s Audit Committee (“Audit Committee”) has appointed BDO USA, LLP (“BDO”) to serve as the Company’s independent registered public accounting firm for the Company for the fiscal year ending May 31, 2020.2021. 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 2020.2021. 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 2021 fiscal year 2020.year. Even if the appointment is ratified, the Audit Committee may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its shareholders.

Relationship with BDO

BDO has acted as the Company’s independent registered public accounting firm for sixseven 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 be present atavailable during the Annual Meeting, with the opportunity to make a statement, if they desire to do so and are expected towill also be available to respond to appropriate questions.

The fees billed by BDO with respect to the fiscal years ended May 31, 20192020 and 20182019 are as follows:

 

  2019   2018   2020   2019 

Audit Fees

  $423,762   $374,046    484,140    480,537 

Audit-Related Fees

   —      —      —      —   

Tax Fees (1)

   127,690    107,628    152,475    127,690 

All Other Fees

   —      —      —      —   
  

 

   

 

   

 

   

 

 
   551,452    481,674    636,615    608,227 

 

(1)

Includes tax compliance work and miscellaneous consulting.

Audit Fees include amounts billed for the annual audit of the Company’s fiscal year Consolidated Financial Statements, the audit of internal controlscontrol over financial reporting, the review of the Consolidated Financial Statements included in the Forms10-Q, a foreign statutory audit, and consultations concerning accounting matters associated with the annual audit. Audit-Related Fees include amounts billed for general accounting consultations and services that are reasonably related to the annual audit. In connection with its review and evaluation ofnon-audit services, the Audit Committee is required to and does consider and conclude that the provision ofnon-audit services is compatible with maintaining the independence of BDO.

Under its charter, the Audit Committee mustpre-approve all audit andnon-audit services to be performed by BDO. In the event management wishes to engage BDO to performnon-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 recurringnon-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 Chairman 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.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT

Principal Shareholders

The following table sets forth certain information, as of August 6, 2019,11, 2020, with respect to beneficial ownership of 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 6, 2019,11, 2020, there were 52,378,78353,031,168 shares of the company’s stock outstanding.

 

Name and Address of Beneficial Owner

  Number of Shares
Beneficially Owned		   Percent of
Class (%)		   Number of Shares
Beneficially Owned		   Percent of
Class (%)		 

Black Rock Institutional Trust Company, N.A.

   7,005,333    13.4% 

400 Howard Street

    

San Francisco, CA 94105

    

Black Rock, Inc. (1)

   7,930,105    14.87% 

55 East 52nd Street

    

New York, NY 10055

    

Brown Capital Management, LLC(2)

   6,346,133    12.1%    6,748,791    12.65% 

1201 North Calvert Street

        

Baltimore, MD 21202

        

The Vanguard Group, Inc.(3)

   5,251,147    10.0%    5,535,524    10.38% 

100 Vanguard Boulevard

        

Malvern, PA 19355

        

Wasatch Advisors, Inc. (4)

   2,773,807    5.20% 

505 Wakara Way

    

Salt Lake City, UT 84108

    

1)

Based on Schedule 13G/A filed with the SEC on February 4, 2020. This report includes holdings of various subsidiaries of the holding company, and includes ownership of more than 5% of our common stock by Black Rock Fund Advisors and iShares Core S&P Small-Cap ETF. Black Rock, Inc. has sole power to vote 7,828,347 shares and sole power to dispose of 7,930,105 shares.

2)

Based on Schedule 13G/A filed with the SEC on February 14, 2020. This report includes 6,748,791 shares beneficially owned by Brown Capital Management, LLC (“Brown Capital”) and 3,547,514 shares beneficially owned by The Brown Capital Management Small Company Fund (the “Fund”), a registered investment company, which is managed by Brown Capital. Brown Capital has sole power to vote 4,210,185 shares and sole power to dispose of 6,748,791 shares, and the Fund has sole power to vote and dispose of 3,547,514 shares.

3)

Based on Schedule 13G/A filed with the SEC on February 12, 2020. This report includes holdings of various subsidiaries of the holding company. The Vanguard Group, Inc. has sole power to vote 108,762 shares, shared power to vote 7,922 shares, sole power to dispose of 5,426,056 shares and shared power to dispose of 109,468 shares.

4)

Based on Schedule 13G/A filed with the SEC on February 10, 2020. Wasatch Advisors, Inc. has sole power to vote and dispose of 2,773,807 shares.

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 6, 201911, 2020 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. Unless otherwise indicated and subject to applicable community property laws, each owner has sole voting and investment powers with respect to the securities listed below.

 

Name

  Number of
Shares
Owned (1)		 Right to
Acquire (2)		   Total   Percentage of
Outstanding
Shares		   Number of
Shares
Owned (1)		 Right to
Acquire (2)		   Total   Percentage of
Outstanding
Shares		 

John E. Adent

   12,813   —      12,813    *    16,070(3)  38,000    54,070    * 

William T. Boehm, Ph.D.

   10,479  24,335    34,814    *    10,479  25,000    35,479    * 

James C. Borel

   2,000  8,113    10,113    *    2,000  13,667    15,667    * 

Ronald D. Green, Ph.D.

   1,681  11,225    12,906    *    1,680  15,890    17,570    * 

James L. Herbert

   509,272(3)  70,667    579,939    1.1%    41,951  50,666    92,617    * 

G. Bruce Papesh

   32,261  36,335    68,596    *    32,261  41,000    73,261    * 

Jack C. Parnell

   5,000  3,668    8,668    * 

Thomas H. Reed

   8,010  6,335    14,345    * 

Ralph A. Rodriguez

   —     —      —      * 

James P. Tobin

   4,766  8,113    12,879    *    5,500  13,667    19,167    * 

Darci A. Vetter

   —    5,446    5,446    *    —    9,667    9,667    * 

Catherine E. Woteki, Ph.D.

   —     —      —      * 

Steven J. Quinlan

   13,470(4)  27,703    41,173    *    13,470(4)  42,667    56,137    * 

Terri A. Morrical

   37,575(5)  47,335    84,910    *    37,575(5)  38,334    75,909    * 

Jason W. Lilly, Ph.D.

   9,544  12,000    21,544    *    10,409  14,667    25,076    * 

Executive officers and directors as a group (13 persons)

   646,871  261,275    908,146    1.7% 

Jerome L. Hagedorn

   —    3,000    3,000    * 

Executive officers and directors as a group (14 persons)

   171,395  303,225    474,620    0.9% 

 

 *

Less than 1%

(1)

Excludes shares that may be acquired through stock option exercises.

(2)

Includes shares that may be acquired within 60 days of August 6, 201911, 2020 upon exercise of options pursuant to Rule13d-3 of the Securities Exchange Act of 1934.

(3)

Includes 22,4341,517 shares held by Mr. Herbert’s spouse, 39,568 held jointly by Mr. Herbert and his spouse, 220,200 shares held by limited liability companies, in which Mr. Herbert and his spouse have minority financial positions and 100 shares in a charitable remainder trust in which Mr. Herbert and his spouse are beneficiaries and trustees.the Neogen Corporation 401(k) Retirement Savings Plan.

(4)

Includes 11,889 shares held in the Neogen Corporation 401(k) Retirement Savings Plan.

(5)

Includes 37,575 shares held in the Neogen Corporation 401(k) Retirement Savings Plan.

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 fiveseven meetings, and there were a total of 1316 committee meetings during fiscal 2019.2020. Each director attended more than 75% of the total meetings of the Board and the committees on which he or she served in fiscal 2019.2020. Directors of the Board are expected to attend the Annual Meeting of shareholdersShareholders unless they have a schedule conflict or other valid reason. All of the current Board members attended the 20182019 Annual Meeting.

Independent Directors

A director is not considered independent unless the Board determines that he or she meets the NasdaqNASDAQ 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 areis independent as defined in the NasdaqNASDAQ independence rules: Dr. Boehm, Mr. Borel, Dr. Green, Mr. Papesh, Mr. Parnell, Mr. Reed, Mr. Rodriguez, Mr. Tobin, Ms. Vetter and Ms. Vetter.Dr. Woteki.

Board Committees

The Board has four committees. The current membership, number of meetings held during fiscal 20192020 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 NasdaqNASDAQ and SEC regulations.

Compensation Committee—Dr. Green (Chair), Mr. Parnell, Mr. Tobin and Ms. Vetter are currently members of the Compensation Committee, which met one time during fiscal 2019.2020. The purpose of the Compensation Committee is to assist the Board in discharging its overall responsibilities relating to executive compensation. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Executive Chairman, Chief Executive Officer and other executive officers prior toat 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. Company management provides recommendations to the Compensation Committee concerning compensation of officers. The Compensation Committee has a charter, which is available in the “Investor Relations” section ofon the Company’s website atwww.neogen.com.

Stock Option Committee—Mr. Parnell (Chair), Mr. Borel and Mr. ReedTobin are currently members of the Stock Option Committee, which met once during fiscal 2019.2020. Mr. Reed was a member of the Stock Option Committee and participated in the meeting, which was held in October 2019, before his resignation from the Board in February 2020. The purpose of the Stock Option Committee is to assist the Board in discharging its overall responsibilities relating to the Company’s stock option plans, including the Neogen Corporation 2007 Stock Option Plan (the “2007 Plan”), which was amended in 2011, the 2015 Omnibus Incentive Plan (the “2015 Plan”), and the 2018 Omnibus Incentive Plan approved by shareholders in 2018. In connection with the approval of the 2018 Plan, the(the ”2018 Plan”). The Stock Option Committee evaluates option grants and any other equity awards under that plan;the terms of the 2018 Plan; no further awards can be made from either the 2007 Plan or the 2015 Plan. The Stock Option Committee determines the amount of grants, if any, to be made to the Chief Executive Officer. Management provides recommendations to the Stock Option Committee concerning stock optionoptions or any other equity awards for other officers and employees. Theemployees, subject to the approval of the Stock Option Committee has a charter, which is available in the “Investor Relations” section of the Company’s website atwww.neogen.com.Committee.

Governance Committee—Mr. Papesh (Chair), Mr. Borel, Dr. Green, Mr. Parnell, Mr. Tobin and Ms. Vetter serve on the Governance Committee, which met five times during fiscal 2019.2020. The Governance Committee provides a

leadership role in shaping the governance of the Company, and providesproviding oversight and direction with respect to the function and operation of the Board. The Governance Committee also provides oversight on management succession, human resources practices, risk management, and environmental, health and safety issues.

The Governance Committee recommends to the Board criteria for selecting new directors; the enumeration of skills that would be advantageous to add to the Board; the appropriate mix of inside and outside directors; ethnicity and gender of directors; and size of the Board. The Board considers factors such as whether or not a potential candidate: (1) possesses relevant expertise; (2) brings skills and experience complementary to those of the other members of the Board; (3) has sufficient time to devote to the affairs of the Company; (4) has demonstrated excellence in his or her field; (5) has the ability to exercise sound business judgment; (6) has the commitment to rigorously represent the long-term interests of the Company’s shareholders; (7) possesses a diverse background and experience, including with respect to race, age and gender; (8) possesses high ethical standards and integrity; and (9) such other factors as the Governance Committee may consider from time to time.

The Governance Committee identifies persons qualified to become directors and, as appropriate, recommends candidates to the Board for its approval. Board composition is reviewed periodically to ensure that the Board reflects the knowledge, experience and skills required for the Board to fulfill its duties. The Governance Committee’s charter requires that the Governance Committee take diversity (including specifically both ethnicity and gender) of directors into account in performing its functions. It identifies persons qualified to become directors and, as appropriate, recommends candidates to the Board for its approval. In assembling a pool of potential candidates from which to make recommendations to the Board, the Committee endeavors to include women and minority candidates. As required by Nasdaq,NASDAQ, the SEC or such other applicable regulatory requirements, a majority of the Board is comprised of independent directors. At the direction of the Board of Directors, the Governance Committee manages the CEO selection process, and ultimately recommends one or more candidates for consideration by the Board. For further information, see the charter of the Governance Committee which is available in the “Investor Relations” section of the Company’s website atwww.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.by-laws. The Committee will evaluate nominees recommended by shareholders against the same criteria.

In searching for candidates to fill Board vacancies, the Governance Committee is committed to identifying the most capable candidates who have experience in the areas of expertise needed at that time and meet the criteria for nomination. The Governance Committee has in the past entertained and encouraged the candidacy of qualified women and minorities and will continue to do so.

Audit Committee—Dr. Boehm (Chair), Mr. Borel and Mr. ReedTobin are currently members of the Audit Committee, which oversees the Company’s financial reporting process on behalf of the Board. Mr. Reed was a member of the Audit Committee until his resignation from the Board in February 2020. 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 of Directors. The Audit Committee met sixnine times during fiscal 2019.2020. 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 atwww.neogen.comwww.neogen.com; and 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.

Lead Director/Chairman/Executive Sessions ofNon-Management Directors

Mr. Parnell has been designatedBorel, as Chairman of the Lead Independent Director, with responsibility for coordinatingBoard, coordinates the activities of the other independent directors. Mr. Parnelldirectors; in that role, he chairs all executive sessions of the Board.

Mr. Adent does not attend the executive sessions except upon request. At least one executive session of the Board is held annually.

Management’s Role in Determining Executive Compensation

The Compensation Committee makes all final decisions regarding officer compensation. Management’s involvement in determining executive compensation is limited to the Chief Executive Officer making recommendations on compensation for members of the 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 of any other company that has an executive officer serving as a member of the Company’s Board. None of the Company’s executive officers serves as a member of the Board of any other company that has an executive officer serving as a member of the Compensation Committee.

Board Role in Risk Management

The Board of Directors 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.

Board Leadership

James L.Mr. Herbert isserved as the Chairman of the Company’s Board and John E. Adent serves asuntil he resigned the Company’s President and Chief Executive Officer.chairmanship following the April 2020 Board meeting; at that time, Mr. Parnell hasBorel was appointed Chairman of the Board. Prior to his assuming the chairmanship, Mr. Borel had been designated the Lead Independent Director, with responsibility for coordinating the activities of the independent directors and chairing all executive sessions of the Board.Board; as Chairman, he continues to chair all executive sessions. Mr. Adent serves as the Company’s President and Chief Executive Officer. The Board has concluded that this leadership structure is appropriate for the Company at this time.

Contacting the Board

Shareholders and other interested persons may 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: Board Secretary. All such communications will be received directly by the Secretary of the Board and will not be screened or reviewed by any other Company employee.

Code of Conduct and Ethics

The Company has adopted a Code of Conduct applicable to all Company employees, officers and directors, including specifically the Chairman, Chief Executive Officer, Chief Financial Officer and Corporate Controller, in the performance of their duties and responsibilities. The Code of Conduct is posted on the Company’s website at www.neogen.comin the “Investor Relations” section of the Company’s website atwww.neogen.comand will be mailed or emailed to any shareholder upon request to the Secretary at 620 Lesher Place, Lansing, Michigan 48912.

Certain Relationships and Related Party Transactions

The Board, acting as a committee of the whole, approves or ratifies transactions involving 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 Board of any such transaction that is proposed to be entered into or continued and seeks Board approval. In the event any such transaction is proposed for which a decision is required prior to the next regularly scheduled meeting of the Board, it may be presented to the Audit Committee Chair for approval, in which event the decision will be reported to the full Board at its next meeting. Melissa Herbert, the daughter of former Chairman of the Board and current director James Herbert, iswas employed by the Company as Vice President, Support Services until May 31, 2020, and earned total compensation of $232,066$220,555 in fiscal 2019.2020.

COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers

Named executive officers (“NEOs”) for SEC reporting purposes are:

 

Name

  

Title

John E. Adent (1)

  President & Chief Executive Officer

James L. Herbert (1)

Chairman of the Board and Director of Strategic Growth

Steven J. Quinlan

  Vice President, Chief Financial Officer and Secretary

Terri A. Morrical

  Vice President, Animal Safety Operations

Jason W. Lilly, Ph.D.

  Vice President, International Business

(1)

Jerome L. Hagedorn.

Mr. Adent joined the Company as Chief Executive Officer on July 17, 2017, and Mr. Herbert was named Executive Chairman on that date. Mr. Adent was named

Vice President, on September 17, 2017. In January 2019, Mr. Herbert becamenon-Executive Chairman and was appointed Director of Strategic Growth.

Food Safety Operations

Brief biographies of the NEOs, with the exception of Mr. Adent, andfollow. Mr. Herbert, follow. Biographies for Mr. Adent and Mr. Herbert areAdent’s biography is included in “Proposal 1— Election1-Election of Directors.”Directors”.

Steven J. Quinlan, age 56,57, joined the Company in January 2011 as Vice President and Chief Financial Officer. He was named Secretary in October 2011. He is responsible for all internal and external financial reporting for the Company, and also manages the accounting, human resources, information technology, corporate communications, and investor relations functions. Mr. Quinlan came to the Company 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 PWC) from 1985-1989.

Terri A. Morrical, age 54,55, joined the Company in September 1992 as part of the Company’s acquisition of WTT, Incorporated. She has directed most aspects of the Company’s animal safety operations since she joined the Company and currently serves as Vice President in charge of all the Company’s animal safety operations excluding genomics. From 1986 to 1991, Ms. Morrical was Controller for Freeze Point Cold Storage Systems and concurrently served in the same capacity for Powercore, Inc. In 1990, she joined WTT, Incorporated as Vice President and Chief Financial Officer and then became President, the position she held at the time the Company acquired the business.

Dr. Jason W. Lilly, age 45,46, 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. HeIn January 2019, Dr. Lilly was named Vice President, International Business, in January 2019, responsible for all internationalNeogen’s operations withoutside of the exception of Neogen Europe.U.S. and Canada. Prior to joining Neogen, he served in various technical sales and marketing roles at Invitrogen Corporation.

Jerome L. Hagedorn, age 54, joined Neogen in April 2018 as Vice President, Food Safety Operations. In the role, Mr. Hagedorn is responsible for the manufacturing, supply chain, shipping and warehousing, facilities, production engineering and quality systems for Neogen’s Food Safety operations. Prior to joining Neogen, Mr. Hagedorn spent eight years as Vice President of Operations at Siemens Healthcare Diagnostics. At Siemens, he was responsible for multiple plant operations, including diagnostic instrument manufacturing and new product introduction. Prior to joining Siemens, Mr. Hagedorn held a variety of senior level positions over a 20 year career, including Director of Manufacturing at Bayer Healthcare in Indiana, Director of Lean Manufacturing at Invensys in Ohio, and Manager of Automated Manufacturing at Siemens Electronic Components in Mexico.

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.

The primary objectives of the compensation programs covering NEOs are to:

 

Attract, retain and motivate highly talented executives who will drive the success of the business;

 

Align incentives with the achievement of measurable corporate, business unit and individual performance objectives based on financial andnon-financial measures, as appropriate;

 

Provide overall compensation that is considered equitable to the employee and the Company; and

 

Ensure reasonable, affordable and appropriate compensation program costs.

Compensation Elements

The primary compensation elements provided to NEOs are:

 

Base salary;

 

Discretionary annual cash bonus; and

 

Equity-based long-term incentive compensation delivered in the form of stock option grants.

Other compensation elements include health and welfare benefits plans, under whichwith the NEOs receivereceiving similar benefits to those provided to all other eligible U.S.-based employees, such as medical, insurance, 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.

Consideration of Last Year’sSay-on-Pay Vote

At the 2018 annual meeting2019 Annual Meeting of shareholders, shareholders were provided with an opportunity to cast an advisory vote on the compensation of the Company’s executive officers. Thesay-on-pay vote yielded approximately 99%98% approval of those votes cast. Notwithstanding this favorable vote, the Company continueswe continue to seek input from our shareholders to understand their views with respect to itsour approach to executive compensation, and in particular in connection with the Compensation Committee’s efforts to tie compensation to performance.

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 2019fiscal 2020 is shown in the “Salary” column of the Summary Compensation Table. Base salary rates and changes from 20182019 to 2019,2020, if applicable, are shown in the following table.

 

Name

  2019
Salary
Rate		   2018
Salary
Rate		   Percent
Increase		   2020
Salary
Rate		   2019
Salary
Rate		   Percent
Change		 

John E. Adent

  $450,000   $450,000    0.0%   $450,000   $450,000    0.0% 

James L. Herbert (1)

   125,000    350,000    n/a 

Steven J. Quinlan

   237,000    237,000    0.0%    247,000    237,000    4.2% 

Terri A. Morrical

   196,000    196,000    0.0% 

Terri A. Morrical (1)

   142,800    196,000    (27.1)% 

Jason W. Lilly, Ph.D.

   195,500    180,000    8.6%    203,775    195,000    4.5% 

Jerome L. Hagedorn.

   260,000    250,000    4.0% 

 

(1)

Mr. Herbert’s operating roleMs. Morrical’s compensation was adjusted to $204,000 on June 1, 2019, an increase of 4.1%. She began a reduced work schedule on December 1, 2019 at the Company was reduced in January 2019 as part of an agreed upon executive leadership transition plan; at that time, hisher request, for personal reasons, and her base salary was adjusted to $125,000.$142,800, effective on that date.

Discretionary Annual Cash Bonus

Bonuses paid in fiscal 20202021 related to fiscal 20192020 performance are as follows:

 

Name

  Target
Value		   Actual
Payments		   Percentage
of Target		   Target
Value		   Actual
Payments		   Percentage
of Target		 

John E. Adent

  $450,000   $157,500    35.0%   $450,000   $315,000    70.0% 

James L. Herbert

   50,000    33,050    66.1% 

Steven J. Quinlan

   75,000    45,000    60.0%    75,000    40,000    53.3% 

Terri A. Morrical

   85,000    34,000    40.0%    85,000    42,000    49.4% 

Jason W. Lilly, Ph.D.

   65,000    58,500    90.0%    68,000    42,000    61.8% 

Jerome L. Hagedorn.

   75,000    50,000    66.7% 

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 communicated.approved. Bonus payments are determined by the Compensation Committee based on achievementthe Company’s performance, achievements of the officers’ objectives and the Committee’s perception of the efforts expended during the fiscal year. The Compensation Committee took into account the recommendations of Mr. Adent with respect to bonuses for Mr. Herbert, Mr. Quinlan, Ms. Morrical, Dr. Lilly and Dr. Lilly.Mr. Hagedorn. Target and actual bonuses are based on individual objectives and the Company’s performance, against operating budgets established at the beginning of the fiscal year, within the discretion of the Compensation Committee. The Compensation Committee’s appraisal of the Company’s overall performance was influenced, in part, by the following:

 

Revenues increased 4.1% in fiscal 20191.0% to $414.2 million,$418.2 million; this amount was significantly short of budget;

 

Gross margins were 46.3%46.9%, an improvement compared to 46.8%margins of 46.3% in fiscal 2018;2019;

 

Operating income was $67.5 million, a slight decrease compared to $68.1 million a decline of 3.0% compared to 2018;in 2019;

 

Net income was $60.2$59.5 million, a 4.8% decrease of 1.2% compared to fiscal 2018;2019;

 

The Company generated $63.8$85.9 million cash from operations in fiscal 2019,2020, compared to $69.1$63.8 million in fiscal 2018;2019; and

Stockholders’ equity increased to $637.9 million May 31, 2019, compared to $560.2$725.2 million at May 31, 2018.2020, compared to $637.9 million at May 31, 2019.

TheBased upon the above listed fiscal 2019 resultsfactors, some of which were below internal targets and were measured against goals contained in Mr. Adent’s previously established annual objectives.objectives, the Compensation Committee determined that the Company’s fiscal 2020 performance had fallen below its targets. In arriving at Mr. Adent’s fiscal 2019annual bonus, the Committee also took into further consideration that hethe year was particularly challenging, that Mr. Adent had provided strong, effective and proactive leadership during the year, and that he and Mr. Herbert had continuedparticularly as it related to effectively work togetherthe Company’s response to ensure a smooth transitionthe COVID-19 pandemic in executive leadership, a process which concluded inthe second half of the fiscal 2019,year, and thus awarded Mr. Adent 35%70% of his targeted bonus opportunity.

Mr. Herbert’s bonus opportunity was based primarily on the performance metrics of the Company’s European operations, which report in through him, the Company’s success in completing acquisitions, and the executive leadership transition. He was awarded 66% of his bonus opportunity.

Mr. Quinlan’s bonus opportunity was tied to the achievement of revenue, operating and net income targets for the overall Company and other internal objectives, such as reductions in employee turnover rates, and improvements in inventory turns, forand the Company. Basedsuccessful implementation of a number of initiatives supported by the information technology group, the most significant being the redesign of the Company’s e-commerce platform. The Company did not achieve a number of its targets, such as revenue, net income and inventory turns; however, the first phase of the e-commerce implementation was successful, launching substantially on the Company performancetime and his level of achievement against his individual targets, heon budget, and Mr. Quinlan was awarded 60%53.3% of his targeted bonus.

The bonus opportunity for Ms. Morrical was primarily based on the achievement of revenue, operating income and other metrics for the Animal Safety business units for which she had reporting responsibility, and, to a lesser extent, achievement of revenue and earnings metrics for the overall Company. Her Animal Safety operations did not meet their revenue targets for the year; based on her levelhowever, she undertook a number of achievement against her targets,cost control and cost reduction actions, which mitigated the impact of the revenue shortfall. Profit as a percentage of revenues improved for the groups she was responsible for in fiscal 2020; she was awarded 40%49.4% of her bonus opportunity. At the beginning of the fiscal year, Dr. Lilly, had bonus opportunities relating primarily to the identification and successful execution of acquisitions, related toin his role as Vice President, Corporate Development. During the year, he was appointed Vice President, International Business, and was given targets onhad bonus opportunities tied to budgeted revenues, operating income and other metrics, such as the successful integration of acquisitions, each related to the Company’s international operations. Based on his performance relative to those targets, he was awarded 90%61.8% of his bonus opportunity.

Substantially Mr. Hagedorn, as Vice President of Food Safety Operations, is responsible for production of all managers’food safety diagnostic and culture media products in the U.S. His bonus arrangements, including thoseopportunity is tied to achievement of eachbudgeted labor and overhead expenses, on time order fulfillment, quality metrics, reduction of production scrap, and achievement of revenue and earnings targets for the overall Company. During the initial stages of the NEOs, include a provisionCOVID-19 pandemic, he took on an additional leadership role as part of an internal team set up to ensure that the bonuses otherwise payable may be decreased by the Compensation Committee, in their discretion, in the event that specific Company earnings per share targets are not met. Actual Company earnings were $1.15 per shareall employees remained safe while continuing to manufacture quality products. This was considered as he was awarded 66.7% of his bonus opportunity in fiscal 2019, a decrease of 5% compared to the $1.21 earned in fiscal 2018, and significantly below the earnings target set by the Company at the beginning of the fiscal year. The Committee did not reduce potential bonus amounts below the targeted bonus level for each of the NEOs in the 2019 fiscal year. However, actual bonuses earned by managers had already been reduced due to shortfalls in performance against the objectives which had been set at the beginning of the year.2020.

Long-Term Incentive Compensation

The objectives of the long-term incentive portion of the compensation package are to:

 

Align the personal and financial interests of management and other employees with shareholder interests;

 

Balance short-term decision-making with a focus on improving shareholder value over the long term;long-term;

 

Provide a means to attract, reward and retain a skilled management team; and

 

Provide the opportunity to build a furtherincrease ownership position in the Company’s stock.Company.

The primary long-term incentive mechanism at the Company has been and continues to be, stock option awards, the ultimate value of which is dependent on increases in the Company’s stock price. Stock options 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 continues to believe that stock options are an appropriate means to accomplish long-term incentive objectives.

The stock option program is designed to deliver competitive long-term awards while incurring reasonable levels of expense and shareholder dilution relative to other long-term incentive programs. It is the Company’s view that stock options represent an appropriate use of corporate resources and are an effective method for the Company to achieve its long-term compensation element objectives.

The Company maintains three equity-based long-term incentive plans that have been previously approved by shareholders—the Neogen Corporation 2007 Stock Option Plan (the “2007 Plan”), which was amended in

2011, the 2015 Omnibus Incentive Plan (the “2015 Plan”), approved by shareholders in 2015, and the 2018 Omnibus Incentive Plan (the “2018 Plan”). Fiscal 20192020 option grants were made under the 2018 Plan and future awards of equity or equity rights will also be granted under the 2018 Plan; no further awards can be made under the 2007 Plan or the 2015 Plan.

In general, stock options granted by the Company to employees are incentive options with five year lives that vest 20% per year beginning with the year following the year of grant. Certain incentive options are converted tonon-qualified options when IRS limitations for incentive options are exceeded. The non-qualifiednonqualified options retain the same vesting and life provisions as incentive options. Non-qualifiedDirectors are granted nonqualified stock options, with five year terms (ten year terms for grants prior to January 1, 2017) and vesting 33% per year for each of the three years following the year of grant, are granted to Directors.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. The Company’s practice has been to make an annual award to the majority of recipients as well as rareoccasional hire-on awards to select new hires.

Annual stock option grants are made at the discretion of the Stock Option Committee, with the exception ofnon-employee director awards which are granted automatically under the termsannually on election or continuation of the Stock Option Plan.an existing term. Management makes recommendations to the Stock Option Committee as to the stock option award levels and terms. The determination with respect to the number of options to be granted to any particular participant is ultimately subjective in nature. While no specific performance measures are applied, factors considered in determining the number of options to be awarded 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, and overall Company expense and shareholder dilution from awards. Management provides the Stock Option Committee information on grants made in the past three years and the accumulated value of all stock option awards outstanding to each NEO.

The table below shows the amounts of the fiscal 20192020 stock option grants to each of the NEOs.

 

Name

  Number of
Options
Granted		   Compensation
Cost
Recognized
for 2019
Grants (2) (3)		   Number of
Options
Granted		   Compensation
Cost
Recognized
for 2020
Grants (1) (2)		 

John E. Adent

   90,000   $1,336,958    90,000   $1,399,917 

James L. Herbert (1)

   —      —   

Steven J. Quinlan

   36,000    534,783    40,000    622,185 

Terri A. Morrical

   33,000    480,178    33,000    513,303 

Jason W. Lilly, Ph.D.

   30,000    445,653    33,000    513,303 

Jerome L. Hagedorn.

   15,000    233,319 

 

(1)

Mr. Herbert was not granted options in fiscal 2019, in accordance with an agreed upon executive leadership transition plan with the Company.

(2)

Represents the aggregate grant date fair value of each stock option granted in fiscal 2019,2020, calculated in accordance with the provisions of the Compensation—Stock Compensation Topic of the FASB Codification. This amount will be recognized over the vesting period of the grants.

(3)(2)

The stock option Codification Topic 718 values throughout this Proxy Statement have been calculated using the Black-Scholes option pricing model using the assumptions in the table below.

 

Black-Scholes Model Assumptions (1)

  2019  2018  2017  2016  2015 

Risk-free interest rate

   2.60%   1.60%   1.20%   1.20%   1.20% 

Expected dividend yield

   0%   0%   0%   0%   0% 

Expected stock price volatility

   27.0%   27.7%   35.2%   33.3%   36.2% 

Expected option life

   3.5 years   4 years   4 years   4 years   4 years 

Black-Scholes Model Assumptions (1)

  2020  2019  2018  2017  2016 

Risk-free interest rate

   1.90%   2.60%   1.60%   1.20%   1.20% 

Expected dividend yield

   0%   0%   0%   0%   0% 

Expected stock price volatility

   29.4%   27.0%   27.7%   35.2%   33.3% 

Expected option life

   3.5 years   3.5 years   4 years   4 years   4 years 

 

(1)

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected stock price volatility is based on historical volatility of the Company’s stock. The expected option life, representing the period of time that options are expected to be outstanding, is based on historical option exercise and employee termination data.

Other Employee Benefits

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 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) planPlan and the value of Company-paidCompany 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 throughafter-tax payroll deductions under the Employee Stock Purchase Plan (“ESPP”) as a way to facilitate employees becoming shareholders of the Company. The ESPP purchases stockbi-annually for participants through a third-partythird party plan administrator. Mr. Adent, Mr. Herbert and Mr. Quinlan are notEach of the NEOs is currently eligible to purchase shares through the plan.

Executive andNon-Employee Director Stock Ownership Policy

The Company has a stock ownership policy in place for all corporate officers, including the NEOs, and Directors. This reflects the Company’s convictionbelief that all senior executives and Directors should have meaningful actual share ownership positions in the Company in order to reinforce the alignment of management and shareholder interests. The ownership policy was adopted by the Board in July 2007. 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

  

Expected Time Period to Comply

Non-Employee Directors

  2 times annual cash fees paid  5 years

Chairman, Chief Executive Officer

  2 times annual salary, including bonus  3 years

Corporate Officers

  2 times annual salary, including bonus  5 years

Stock owned includes shares owned outright, including 401(k) Plan shares, but does not include unexercised stock options. As of May 31, 2019, the Chairman, the Chief Executive Officer and2020, all corporate officers,

including the NEOs, were at or above the applicable stock ownership requirement or within the expected time period to comply, and allcomply. All non-employee directors were at or above the applicable stock ownership requirement, or within the expected time period to comply.

Chief Executive Officer Compensation

John Adent has been the Chief Executive Officer of the Company since July 2017, and2017; he was also named President in September 2017. His base salary in fiscal 20192020 was $450,000, and his target bonus opportunity was $450,000, based on the achievement of certain revenue and earnings targets and the attainment of other strategic and operational goals. In addition to base salary and bonus opportunity, Mr. Adent was awarded 90,000 stock options in fiscal 2019,2020, at an exercise price of $62.70,$63.90, the closing price of the Company stock on November 1, 2018, the date of the award. As the COVID-19 pandemic spread across the world during the second half of the Company’s fiscal year, and with much uncertainty regarding the condition of the Company’s markets and customers, in the fourth quarter of fiscal 2020 Mr. Adent proposed to the Board that his salary, and that of the senior management team, be reduced through the end of the 2020 fiscal year. He proposed that his salary be reduced to $1 annually during that period and recommended that salaries of his senior management team be reduced by 50%. The Board accepted Mr. Adent’s proposal; therefore, from April 13 to May 31, 2020, his compensation was reduced by $60,577, and for the full fiscal year 2020, he was paid $389,423. In determining the amount of Mr. Adent’s fiscal 2019annual bonus, the Committee took into consideration the Company’s 4%1% revenue increase over fiscal 20182019 and net income which was 5%2% less than fiscal 2018,2019, which were each significantly less than targeted amounts for the year, and the Board’s assessment of the level of attainment of his otherremaining fiscal 20192020 strategic goals. The Committee acknowledged that fiscal 2020 was a particularly challenging year due to the COVID-19 pandemic. The Committee also determined that Mr. Adent had provided strong, effective and proactive leadership during the year, and that he and Mr. Herbert had continued to effectively work together to ensure a smooth transition in executive leadership, a process which concluded in fiscal 2019,particular during the COVID-19 outbreak, and thus awarded Mr. Adent 35%70% of his targeted bonus opportunity.

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:

Ronald D. Green, Ph.D. (Chairman)

Jack C. Parnell

James P. Tobin

Darci L. Vetter

Members of the Compensation Committee

EXECUTIVE COMPENSATION

The table sets forth information regarding all elements of the compensation paid to the Company’s NEOsnamed executive officers (principal executive officer, principal financial officer and three other most highly compensated executive officers) (the “NEOs”) for fiscal years 2020, 2019 2018 and 2017.2018.

Summary Compensation Table

 

Name and Principal Position

 Year  Salary  Bonus  Options
Awards (1)		  All Other
Compensation (2)		  Total 

John E. Adent (3)

  2019  $450,000  $157,500  $1,336,958  $18,356  $1,962,814 

President & Chief Executive

Officer

  2018   393,750   180,000   1,250,239   33,004   1,856,993 
  2017   —     —     —     —     —   

James L. Herbert (4)

  2019   256,571   33,050   —     16,629   306,250 

Chairman of the Board,

Director of Strategic Growth

  2018   391,667   180,000   1,472,902   18,723   2,063,292 
  2017   450,000   190,000   1,498,523   16,318   2,154,841 

Steven J. Quinlan

  2019   237,000   45,000   534,783   11,597   828,380 

Vice President & Chief

Financial Officer

  2018   237,000   58,000   687,352   10,691   993,043 
  2017   230,000   53,000   552,087   9,521   844,608 

Terri A. Morrical

  2019   196,000   34,000   480,178   6,258   716,436 

Vice President,

Animal Safety

  2018   196,000   72,000   589,189   9,115   866,304 
  2017   190,000   65,000   473,218   8,050   736,268 

Jason W. Lilly, Ph.D.

  2019   195,500   58,500   445,653   8,631   708,284 

Vice President,

International Business

  2018   180,000   55,000   588,900   9,768   833,668 
  2017   177,000   50,000   473,100   9,137   709,237 

Name and Principal Position

 Year  Salary  Bonus  Options
Awards (1)		  All Other
Compensation (2)		  Total 

John E. Adent (3)(6)

  2020  $389,423  $315,000  $1,399,917  $19,108  $2,123,448 

Chief Executive Officer &

President

  2019   450,000   157,500   1,336,958   18,356   1,962,814 
  2018   393,750   180,000   1,250,239   33,004   1,856,993 

Steven J. Quinlan (6)

  2020   231,325   40,000   622,185   9,328   902,838 

Vice President & Chief

Financial Officer

  2019   237,000   45,000   534,783   11,597   828,380 
  2018   237,000   58,000   687,352   10,691   993,043 

Terri A. Morrical (4)(6)

  2020   164,338   42,000   513,303   7,278   726,919 

Vice President,

Animal Safety

  2019   196,000   34,000   480,178   6,258   716,436 
  2018   196,000   72,000   589,189   9,115   866,304 

Jason W. Lilly Ph.D. (6)

  2020   190,843   42,000   513,303   7,923   754,069 

Vice President,

International Business

  2019   195,500   58,500   445,653   8,631   708,284 
  2018   180,000   55,000   588,900   9,768   833,668 

Jerome L. Hagedorn (5)(6)

  2020   243,500   50,000   233,319   11,925   538,744 

Vice President,

Food Safety Operations

  2019   250,000   50,000   74,275   769   375,044 
  2018   35,418   —     —     —     35,418 

 

(1)

Calculations use grant-date fair value based on Codification Topic 718 for stock option grants for the 2018, 2019 2018 and 20172020 fiscal years. For purpose of this disclosure, the calculations do not attribute the compensation cost to the requisite vesting period. For information on valuation assumptions, see “Compensation Discussion and Analysis—Compensation Elements—Long-term Incentive Compensation.”

(2)

Includes 401(k) Plan matching contributions and value of group term life insurance. A total of $32,313 is included in All Other Compensation for relocation expenses for Mr. Adent in fiscal 2018.

(3)

Mr. Adent was hired as Chief Executive Officer on July 17, 2017 at an annual salary of $450,000. He added the title of President in September 2017.

(4)

Ms. Morrical requested a reduction in her schedule for personal reasons in fiscal 2020; her hours were reduced on December 1, 2019 and her salary was reduced at that time to $142,800.

(5)

Mr. Herbert isHagedorn was hired on April 13, 2018 as Vice President, Food Safety Operations at an annual salary of $250,000.

(6)

In reaction to the former Chief Executive OfficerCOVID-19 pandemic, each of the Company. His operating role and responsibilitiesabove NEOs, along with other members of senior management, voluntarily reduced his or her base salary for the period April 13 to May 31, 2020. Mr. Adent reduced his salary to $1 annually during that time period, while the other NEOs salaries were reduced in January 2019,by 50%. The impact of the salary reduction was as part of an agreed upon executive leadership transition plan.follows for each NEO: Mr. Adent, $60,577; Mr. Quinlan, $15,675: Ms. Morrical, $9,062; Dr. Lilly, $12,932; and Mr. Hagedorn, $16,500.

The following table sets forth the fiscal 20192020 compensation cost recognized for fiscal 20192020 awards or the portion of awards vested in fiscal 20192020 from prior grants as shown in the “Option Awards” column:

Option Awards

 

Name

  2019
Awards		   2018
Awards		   2017
Awards		   2016
Awards		   2015
Awards		   Total 

John E. Adent

  $132,521   $244,026   $—     $—     $—     $376,547 

James L. Herbert

   —      282,771    302,853    152,781    72,517    810,922 

Steven J. Quinlan

   53,008    131,960    111,578    45,026    13,742    355,314 

Terri A. Morrical

   48,591    113,110    95,638    46,638    21,757    325,734 

Jason W. Lilly, Ph.D.

   44,174    113,110    40,202    11,450    1,379    210,315 

Name

  2020
Awards		   2019
Awards		   2018
Awards		   2017
Awards		   2016
Awards		   Total 

John E. Adent

  $153,687   $250,574   $255,168   $—     $—     $659,429 

Steven J. Quinlan

   68,305    100,230    138,905    114,553    24,114    446,107 

Terri A. Morrical

   56,352    91,877    119,064    98,188    24,977    390,458 

Jason W. Lilly, Ph.D.

   56,352    83,525    119,064    98,188    21,530    378,659 

Jerome L. Hagedorn

   25,620    13,920    16,383    —      —      55,923 

The following table indicates the “mix” of total direct compensation for the NEOs in fiscal 20192020 based on salary, total bonus payment and the Codification Topic 718 compensation expense of fiscal 20192020 option awards:

 

Name

  Salary   Annual
Bonus		   Stock Option
Grant-Date Value
Black-Scholes (1)		   Salary (1)   Annual
Bonus		   Grant-Date Value
Black-Scholes (2)		 

John E. Adent

  $450,000   $157,500   $1,336,958   $450,000   $315,000   $1,399,917 

James L. Herbert

   125,000    33,050    —   

Steven J. Quinlan

   237,000    45,000    534,783    247,000    40,000    622,185 

Terri A. Morrical

   196,000    34,000    480,178    142,800    42,000    513,303 

Jason W. Lilly, Ph.D.

   195,500    58,500    445,653    203,775    42,000    513,303 

Jerome L. Hagedorn.

   260,000    50,000    233,319 

 

(1)

Salary amount utilized is base salary before the voluntary salary reduction for each NEO from April 13 to May 31, 2020.

(2)

Calculations use grant-date fair value based on Codification Topic 718 for fiscal 20192020 stock option grants. For purposes of this table, the calculations do not attribute the compensation cost to the requisite vesting period.

Grants of Plan-Based Awards in the 20192020 Fiscal Year

The following table sets forth additional information regarding the range of option awards granted to the NEOs in the year ended May 31, 20192020 that are disclosed in the Summary Compensation Table.

 

Name

  Grant
Date (1)		   Number of
Securities
Underlying
Options		   Exercise
Price of
Option
Awards (2)		   Closing
Market
Price on
Date of
Grant		   Grant-date
Fair Value
of Option
Awards (3)		   Grant
Date (1)		   Number of
Securities
Underlying
Options		   Exercise of
Base Price of
Options
Awards (2)		   Closing
Market
Price on
Date of
Grant		   Grant-date
Fair Value
of Options
Awards (3)		 

John E. Adent

   11/1/2018    90,000   $62.70   $62.70   $1,336,958    10/11/2019   $90,000   $63.90   $63.90   $1,399,917 

James L. Herbert (4)

   —      —      —      —      —   

Steven J. Quinlan

   11/1/2018    36,000    62.70    62.70    534,783    10/11/2019    40,000    63.90    63.90    622,185 

Terri A. Morrical

   11/1/2018    33,000    62.70    62.70    480,178    10/11/2019    33,000    63.90    63.90    513,303 

Jason W. Lilly, Ph.D.

   11/1/2018    30,000    62.70    62.70    445,653    10/11/2019    33,000    63.90    63.90    513,303 

Jerome L. Hagedorn.

   10/11/2019    15,000    63.90    63.90    233,319 

 

(1)

Represents the date the grants were made.

(2)

In accordance with the terms of the 2018 Plan, these options were granted at 100% of the closing market price on the day of the grant. Options have a five-year term and generally become exercisable as to 20% of the shares on each of the five anniversary dates of the grant.

(3)

Represents grant-date value based on Codification Topic 718 for the option grants. For information on valuation assumptions, see “Compensation Discussion and Analysis—Compensation Elements—Long-term, Incentive Compensation.”

(4)

Mr. Herbert was not granted options in fiscal 2019, as his responsibilities changed in accordance with an agreed upon executive leadership transition plan.

Outstanding Equity Awards at May 31, 20192020

This table sets forth information regarding unexercised options that were held by the NEOs at May 31, 2019.2020.

 

  Grant
Date		   Option Awards 

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		   Number of
Securities
Underlying
Unexercised
Options
Exercisable (1)		   Number of
Securities
Underlying
Unexercised
Options
Unexercisable (1)		   Option
Exercise
Price		   Option
Expiration
Date		 

John E. Adent

   7/17/2017    20,001    80,000   $51.29    8/17/2022    7/17/2017    —      59,999   $51.29    8/17/2022 

President & Chief Executive Officer

   11/1/2018    —      90,000    62.70    12/1/2023    11/1/2018    18,000    72,000    62.70    12/1/2023 
    

 

   

 

     
     20,001    170,000     

James L. Herbert

   10/1/2014    —      25,333    29.71    10/31/2019 

Chairman of the Board & Director of

Strategic Growth

   10/8/2015    —      50,666    35.34    11/8/2020 
 9/29/2016    —      75,999    40.46    10/29/2021 
 10/27/2017    20,000    80,001    60.43    11/27/2022 

President & Chief Executive Officer

  10/11/2019    —      90,000    63.90    11/11/2024 
    

 

   

 

         

 

   

 

     
     20,000    231,999          18,000    221,999     

Steven J. Quinlan

   10/1/2014    —      4,801    29.71    10/31/2019    10/8/2015    —      7,466    35.34    11/8/2020 

Vice President & Chief Financial

Officer

   10/8/2015    566    14,931    35.34    11/8/2020    9/29/2016    —      18,665    40.46    10/29/2021 
 9/29/2016    18,668    27,999    40.46    10/29/2021   10/27/2017    18,668    27,999    60.43    11/27/2022 
 10/27/2017    9,334    37,333    60.43    11/27/2022   11/1/2018    7,200    28,800    62.70    12/1/2023 
 11/1/2018    —      36,000    62.70    12/1/2023   10/11/2019    —      40,000    63.90    11/11/2024 
    

 

   

 

         

 

   

 

     
     28,568    121,064          25,868    122,930     

Terri A. Morrical

   10/1/2014    —      7,601    29.71    10/31/2019    10/8/2015    —      7,733    35.34    11/8/2020 

Vice President,

Animal Safety

   10/8/2015    7,734    15,466    35.34    11/8/2020    9/29/2016    —      16,000    40.46    10/29/2021 
 9/29/2016    16,000    24,000    40.46    10/29/2021   10/27/2017    16,000    24,001    60.43    11/27/2022 
 10/27/2017    8,000    32,001    60.43    11/27/2022   11/1/2018    6,600    26,400    62.70    12/1/2023 
 11/1/2018    —      33,000    62.70    12/1/2023   10/11/2019    —      33,000    63.90    11/11/2024 
    

 

   

 

         

 

   

 

     
     31,734    112,068          22,600    107,134     

Jason W. Lilly, Ph.D.

   10/1/2014    —      4,000    29.71    10/31/2019 

Jason W. Lilly Ph. D.

   10/8/2015    —      6,666    35.34    11/8/2020 

Vice President,

International Business

   10/8/2015    —      13,331    35.34    11/8/2020    9/29/2016    —      16,000    40.46    10/29/2021 
 9/29/2016    —      24,000    40.46    10/29/2021   10/27/2017    —      24,001    60.43    11/27/2022 
 10/27/2017    8,000    32,001    60.43    11/27/2022   11/1/2018    5,681    24,000    62.70    12/1/2023 
 11/1/2018    —      30,000    62.70    12/1/2023   10/11/2019    —      33,000    63.90    11/11/2024 
    

 

   

 

         

 

   

 

     
     8,000    103,332          5,681    103,667     

Jerome L. Hagedorn

   4/10/2018  �� 2,000    3,000    67.76    5/9/2023 

Vice President, Food Safety Operations

   11/1/2018    1,000    4,000    62.70    12/1/2023 
 10/11/2019    —      15,000    63.90    11/11/2024 
    

 

   

 

     
     3,000    22,000     

 

(1)

Vesting schedules for Incentive Stock andNon-Qualified Options are 20% of the shares on each of the first five anniversary dates of the grant.

Option Exercises and Stock Vested in 20192020 Fiscal Year

This table sets forth information with respect to option exercises by the NEOs during fiscal 2019.2020.

 

Name

  Number of
Shares
Acquired on
Exercise		   Value Realized
on Exercise (1)		   Number of
Shares
Acquired on
Exercise		   Value Realized
on Exercise (1)		 

John E. Adent

   —     $—      8,513   $709,431 

James L. Herbert

   99,695    3,467,753 

Steven J. Quinlan

   19,104    729,263    40,834    1,283,865 

Terri A. Morrical

   30,268    1,413,366    47,068    1,507,666 

Jason W. Lilly, Ph.D.

   21,871    609,536 

Jason W. Lilly, Ph. D.

   34,984    776,434 

Jerome L. Hagedorn

   —      —   

 

(1)

Represents the difference between the exercise price and the marketclosing price of the Common Stock at the time of exerciseas reported on NASDAQ on the exercise date.

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 orChange-in-Control

The Company does not provide employment, severance orchange-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. In the event of a change in control of the Company, there are provisions in each of the three equity-based long-term incentive plans to allow for acceleration in the vesting and exercisability of outstanding stock option awards, at the discretion of the Stock Option Committee.

CEO Pay RatioPAY 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 RegulationS-K, the Company iswe are required to disclose the ratio of itsour median employee’s annual total compensation to the annual total compensation of theour CEO. Mr. Adent has been the Chief Executive OfficerCEO of the Company since July 17, 2017, and served as Chief Executive OfficerCEO on May 31, 2019,2020, the determination date of the median employee.employee compensation.

The annual compensation used for this analysis included each element of compensation listed in the Summary Compensation Table in this Proxy. TheWe annualized the total compensation for any employee on the payroll at May 31, 2019,2020 who was not employed for all of fiscal 2019, was annualized. All2020. We then ranked all of theour employees (except for Mr. Adent) were then ranked in terms of total compensation from highest to lowest, and identified the employee that ranked as the median was identified.median. Following this methodology, the components of the Company’sour pay ratio disclosure for fiscal 20192020 were reasonably estimated as follows:

 

The median of the total annual compensation for all of our employees other thanexcluding Mr. Adent was $34,497.$36,414.

 

Mr Adent’s total compensation was $1,962,814.$2,123,448.

 

The ratio of Mr. Adent’s compensation to the compensation of the median employee was 57:58:1.

The CEO 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 CEO Pay Ratio disclosureDisclosure may not be comparable to the ratio reported by other companies.

COMPENSATION OF DIRECTORS

This table sets forth information regarding compensation paid during fiscal 20192020 to directors who were not employees.

 

Name

  Fees Earned
or Paid in
Cash		   Option
Awards		   Total   Fees Earned
or Paid in
Cash (1)		   Option
Awards (2)		   Total 

William T. Boehm, Ph.D.

  $39,500   $48,133   $87,633   $41,500   $46,876   $88,376 

James C. Borel

   40,000    48,133    88,133    44,000    46,876    90,876 

Ronald D. Green, Ph.D.

   40,500    48,133    88,633    41,500    46,876    88,376 

James L. Herbert (3)

   19,000    —      19,000 

G. Bruce Papesh

   39,500    48,133    87,633    40,500    46,876    87,376 

Jack C. Parnell

   41,000    48,133    89,133 

Thomas H. Reed

   41,500    48,133    89,633 

Jack C. Parnell (4)

   19,500    —      19,500 

Thomas H. Reed (5)

   31,500    —      31,500 

James P. Tobin

   40,500    48,133    88,633    41,500    46,876    88,376 

Darci L. Vetter

   37,500    48,133    85,633    41,000    46,876    87,876 

 

(1)

In reaction to the COVID-19 pandemic, the Board voted in April 2020 to forgo their retainer effective April 23 to May 31, 2020. This reduction, which totaled $4,260 per director, will be reflected in their fiscal 2021 compensation, as the 4th quarter retainer had already been paid prior to April 2020.

(2)

Calculations use grant-date fair value based on Codification Topic 718 for the fiscal 20192020 stock option grants. For purpose of this disclosure, the calculations do not attribute the compensation cost to the requisite vesting period. For information on valuation assumptions, see “Compensation Discussion and Analysis—Compensation Elements—Long-term Incentive Compensation.”

(3)

Per an agreed upon transition plan between Mr. Herbert and the Company, Mr. Herbert’s employment ended on October 31, 2019; at that time, his role changed to that of non-employee director. He was awarded no options during fiscal 2020; however, options previously granted to him as an employee continue to vest as he continues to provide service to the Company.

(4)

Mr. Parnell did not stand for re-election to the Board in October 2019; fees earned were for service up to that date.

(5)

Mr. Reed resigned from the Board effective February 6, 2020. Fees earned were for service through that date, and his option award from October 2019 was forfeited, as it had not yet vested.

The following table sets forth the fiscal 20192020 compensation cost recognized for fiscal 20192020 awards to directors and the portion of awards vested in fiscal 20192020 from prior grants as shown in the “Option Awards” column.

Option Awards

 

Name

  2019
Awards		   2018
Awards		   2017
Awards		   Total   2020
Awards		   2019
Awards		   2018
Awards		   Total 

William T. Boehm, Ph.D.

  $9,645   $19,085   $16,521   $45,251   $9,474   $16,003   $19,662   $45,139 

James C. Borel

   9,645    19,085    27,536    56,266    9,474    16,003    19,662    45,139 

Ronald D. Green, Ph.D.

   9,645    19,085    16,521    45,251    9,474    16,003    19,662    45,139 

James L. Herbert (1)

   —      —      —      —   

G. Bruce Papesh

   9,645    19,085    16,521    45,251    9,474    16,003    19,662    45,139 

Jack C. Parnell

   9,645    19,085    16,521    45,251 

Thomas H. Reed

   9,645    19,085    16,521    45,251 

Jack C. Parnell (2)

   —      6,400    7,357    13,757 

Thomas H. Reed (3)

   —      6,400    7,357    13,757 

James P. Tobin

   9,645    19,085    27,536    56,266    9,474    16,003    19,662    45,139 

Darci L. Vetter

   9,645    31,809    —      41,454    9,474    16,003    32,771    58,248 

(1)

Per an agreed upon transition plan between Mr. Herbert and the Company, Mr. Herbert’s employment ended on October 31, 2019; at that time, his role changed to that of non-employee director. He was awarded no

options during fiscal 2020; however, options previously granted to him as an employee continue to vest as he continues to provide service to the Company.
(2)

Mr. Parnell did not stand for re-election to the Board in October 2019; he was not awarded options during fiscal 2020.

(3)

Mr. Reed resigned from the Board effective February 2020. His option award from October 2019 was forfeited, as it had not yet vested.

The grant-date fair value of the stock option awards granted in fiscal 2019,2020, the compensation cost recognized for fiscal 20192020 grants, and outstanding option awards at May 31, 20192020 were:

 

Name

  Grant-Date
Fair Value based
Codification Topic
718 for 2019
Grants		   Compensation
Cost
Recognized
for 2019
Grants		   Option
Awards
Outstanding
at May 31,
2019		 

William T. Boehm, Ph.D.

  $48,133   $9,645    29,000 

James C. Borel

   48,133    9,645    13,667 

Ronald D. Green, Ph.D.

   48,133    9,645    15,890 

G. Bruce Papesh

   48,133    9,645    47,000 

Jack C. Parnell

   48,133    9,645    8,333 

Thomas H. Reed

   48,133    9,645    19,000 

James P. Tobin

   48,133    9,645    13,667 

Darci L. Vetter

   48,133    9,645    9,667 

Name

  Grant Date
Fair Value based
Codification Topic
718 for 2020
Grants		   Compensation
Cost
Recognized
for 2020
Grants		   Option
Awards
Outstanding
at May 31,
2020		 

William T. Boehm, Ph.D.

  $46,876   $9,474    28,000 

James C. Borel

   46,876    9,474    16,667 

Ronald D. Green, Ph.D.

   46,876    9,474    18,890 

James L. Herbert (1).

   —      —      135,999 

G. Bruce Papesh

   46,876    9,474    44,000 

Jack C. Parnell (2)

   —      —      —   

Thomas H. Reed (3)

   —      —      —   

James P. Tobin

   46,876    9,474    16,667 

Darci L. Vetter

   46,876    9,474    12,667 

(1)

Per an agreed upon transition plan between Mr. Herbert and the Company, Mr. Herbert’s employment ended on October 31, 2019; at that time, his role changed to that of non-employee director. He was awarded no options during fiscal 2020; however, options previously granted to him as an employee continue to vest as he continues to provide services to the Company. The amount shown above represents awards outstanding from his service as an employee.

(2)

Mr. Parnell did not stand for re-election to the Board in October 2019. All vested options were exercised within 90 days of October 3, 2019.

(3)

Mr. Reed resigned from the Board on February 6, 2020. All vested options were exercised within 90 days of that date.

Allnon-employee Directors are grantednon-qualified options to purchase 5,000 shares of Common Stock when first elected to the Board and are grantednon-qualified options to purchase 3,000 shares of Common Stock upon subsequent election to, or commencement of annual service on, the Board. For option grants issued prior to 2017, the options expire ten years after the date of grant and vest over three years in equal annual installments commencing with the first anniversary of the date of grant. Effective with the 2017 grants, the options expire five years after the date of the grant and vest equally over three years in equal annual installments.Non-employee Directors receive an annual retainer of $32,000 (paid quarterly). DirectorsEach Director also receivereceives $1,000 for each Board meeting and $500 for each committee meeting attended. All directorsDirectors receive reimbursement for all ordinary travel expenses related to attendance at Board or committee meetings.

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 throughout the year and reported the results of our activities to the Board. Specifically the following were completed:

 

Reviewed and discussed the audited financial statements for the fiscal year ended May 31, 20192020 with the Company’s management;

 

Discussed with BDO the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees;and the Commission; and

 

Received written disclosure regarding independence from BDO as required by applicable requirements of the Public Company Accounting Oversight Board for independent auditor communications with audit committees concerning their independence and discussed with BDO its independence.

Based on the above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s fiscal year 2019 annual report2020 Annual Report on Form10-K and the Company’s annual report2020 Annual Report to shareholders.

Submitted by:

William T. Boehm, Ph.D. (Chairman)

James C. Borel

Thomas H. ReedJames P. Tobin

Members of the Audit Committee

ADDITIONAL INFORMATION

Shareholder Proposals for the 20202021 Annual Meeting

Shareholder proposals intended to be presented at the 2020 annual meeting2021 Annual Meeting of shareholdersShareholders 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 April 30, 2020May 3, 2021 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 Rule14a-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 2020 annual meeting2021 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 the Company’sour Bylaws. Assuming that our 20202021 annual meeting is not advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the 20192020 annual meeting, the Companywe must receive notice of an intention to introduce a nomination or other item of business at the 2020 annual meeting2021 Annual Meeting after July 5, 2020,10, 2021, and no later than August 4, 2020.9, 2021.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires 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 2019,2020, to the Company’s knowledge, 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 following: Mr. Parnell had one and Mr. Herbert had two transactions for whichexceptions listed. Three Form 4s4’s were filed late on their behalf.behalf of three transactions for Mr. Herbert; one Form 4 was filed late on behalf of two transactions for Mr. Reed; one Form 4 was filed late on behalf of one transaction for Dr. Boehm; and one Form 4 was filed late on behalf of one transaction for Mr. Adent.

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 3, 2019.8, 2020. Seehttp://www.neogen.com/en/investor-informationfor a copy of the 2019 proxy statement2020 Proxy Statement and annual report.Annual Report.

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,

 

 

LOGO

Steven J. Quinlan

Secretary

August 27, 201931, 2020

ANNUAL MEETING OF SHAREHOLDERS OF

NEOGEN CORPORATION

October 3, 2019

GO GREEN

e-Consent makes it easy to go paperless. Withe-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.

Please sign, date and mail

your proxy card in the

envelope provided as soon

as possible.

i  Please detach along perforated line and mail in the envelope provided.  i

LOGO

NEOGEN CORPORATION

ATTN: STEVEN J. QUINLAN

620 LESHER PLACE

LANSING, MI 48912

VOTE BY INTERNET

Before The Meeting - Go to www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on October 7, 2020 for shares held directly and by 11:59 p.m. Eastern Time on October 5, 2020 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/NEOG2020

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 any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on October 7, 2020 for shares held directly and by 11:59 p.m. Eastern Time on October 5, 2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.

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.

 

        ⬛  20330300000000000000    3100319                 

THE BOARD OF DIRECTORS RECOMMENDS “FOR” THE LISTED NOMINEES AND PROPOSALS 2 AND 3.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASETO VOTE, MARK YOUR VOTEBLOCKS BELOW IN BLUE OR BLACK INK AS SHOWN HERE   ☒

FOLLOWS:
D22673-P44060        KEEP THIS PORTION FOR YOUR RECORDS 
— — — — — — — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — — — — — — —  — — —   — —  — —
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

DETACH AND RETURN THIS PORTION ONLY 

  NEOGEN CORPORATION

THE BOARD OF DIRECTORS RECOMMENDS “FOR” THELISTED NOMINEES AND PROPOSALS 2 AND 3.

 

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.

     FOR AGAINST
  ABSTAIN

        1.ELECTION OF DIRECTORS

   2. TO APPROVE, BY NON-BINDING ADVISORY VOTE, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. 

☐

 

☐

☐

   ☐

 

 

 

FOR ALL NOMINEES

☐      

  

NOMINEES:

LOGO  John E. Adent

LOGO  William T. Boehm

LOGO  James P. Tobin

   
☐WITHHOLD AUTHORITY
FOR ALL NOMINEES		3.RATIFICATION

1.  ELECTION OF APPOINTMENT OF BDO USA LLP AS THE COMPANY’S INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM.

☐☐☐
☐

FOR ALL EXCEPT

(See instructions below)DIRECTORS

        

SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

NOMINEES:

          

INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here: 🌑

01)   G. Bruce Papesh

      

  

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.02)   Ralph A. Rodriguez

☐        

03)   Catherine E. Woteki, Ph.D.

ForAgainstAbstain

2.  TO APPROVE, BY NON-BINDING ADVISORY VOTE, THE COMPENSATION OF EXECUTIVES.

☐☐☐    

3.  RATIFICATION OF APPOINTMENT OF BDO USA LLP AS THE COMPANY’S INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM.

☐☐☐    

SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

   

Signature of Shareholder

 Date: Signature of ShareholderDate: 

 

     ⬛

 Note:

Please sign exactly as your name or names appearappear(s) on this Proxy. When shares are held jointly, each holder should sign. When signing as executor,executor. administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

⬛

ANNUAL MEETING OF SHAREHOLDERS OF

NEOGEN CORPORATION

October 3, 2019

PROXY VOTING INSTRUCTIONS

 

INTERNET- Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page.

TELEPHONE- Call toll-free1-800-PROXIES (1-800-776-9437) in the United States or1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.

Vote online/phone until 11:59 PM EST the day before the meeting.

MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible.

IN PERSON -You may vote your shares in person by attending the Annual Meeting.

GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.

LOGO

COMPANY NUMBER

ACCOUNT NUMBER

i  Please detach along perforated line and mail in the envelope providedIF you are not voting via telephone or the Internet.  i

⬛  20330300000000000000    3100319       

THE BOARD OF DIRECTORS RECOMMENDS “FOR” THE LISTED NOMINEES AND PROPOSALS 2 AND 3.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE  ☒

 

      FORAGAINSTABSTAIN

1. ELECTION OF DIRECTORS:

2.TO APPROVE, BY NON-BINDING ADVISORY VOTE, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.

☐

☐

☐

☐

FOR ALL NOMINEES

NOMINEES:

¡  John E. Adent

¡  William T. Boehm

¡  James P. Tobin

☐WITHHOLD AUTHORITY
FOR ALL NOMINEES		3.RATIFICATION OF APPOINTMENT OF BDO USA LLP AS THE COMPANY’S INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM.☐☐☐
☐

FOR ALL EXCEPT

(See instructions below)

SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here: 🌑

     

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

          Signature [PLEASE SIGN WITHIN BOX]		 ☐  Date             Signature (Joint Owners) Date          

Signature of Shareholder Date: Signature of Shareholder Date: 

⬛Note:Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.⬛

ANNUAL MEETING OF SHAREHOLDERS OF

NEOGEN CORPORATION

October 8, 2020

GO GREEN

e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy materials, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access.

Please sign, date and mail

your proxy card in the

envelope provided as soon

as possible.

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.

— — — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — — — —— — —

D22674-P44060           

 

 

0⬛

PROXY

NEOGEN CORPORATION

Annual Meeting of ShareholdersANNUAL MEETING OF SHAREHOLDERS - October 3, 2019OCTOBER 8, 2020

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints John E. Adent and Steven J. Quinlan, and each of them, with full power to appoint his substitute,their substitutes, attorneys and proxies 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 meetingAnnual Meeting of shareholdersShareholders of Neogen Corporation 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 VOTEDFORPROPOSALS 1 THROUGH 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 the reverse side)

⬛  1.114475  ⬛