<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
BIOMET, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
BIOMET, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(LOGO)
To the Shareholders of Biomet, Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders
of Biomet, Inc. to be held on Friday, September 16, 1994, at 1:30 p.m., local
time, at the Century Center, 120 South St. Joseph Street, South Bend, Indiana.
At the meeting, shareholders will vote on the election of four persons
to the Board of Directors and the ratification of the selection of Coopers &
Lybrand as certified public accountants for the coming year. Details can be
found in the accompanying Notice and Proxy Statement.
We hope you are planning to attend the Annual Meeting personally, and
we look forward to meeting with you. Please check the appropriate "attendance"
box on your proxy card. However, because the vote of each shareholder is of
utmost importance, we kindly request that you complete, date and sign your
proxy card and return it to us promptly in the enclosed envelope whether or not
you currently plan to attend the Annual Meeting. You may revoke your proxy at
any time before it is voted by giving written notice to the Secretary of the
Company or by filing a properly executed proxy bearing a later date.
On behalf of the Board of Directors and management of Biomet, Inc., I
would like to extend our appreciation for your continued support and
confidence.
Sincerely yours,
BIOMET, INC.
/s/ Dane A. Miller, Ph.D.
-------------------------
Dane A. Miller, Ph.D.
President and Chief
Executive Officer
<PAGE> 3
(LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 16, 1994
TO THE SHAREHOLDERS OF BIOMET, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Biomet, Inc. (the "Company") will be held on Friday, September 16, 1994, at
1:30 p.m., local time, at the Century Center, 120 South St. Joseph Street,
South Bend, Indiana, for the following purposes:
(1) To elect four directors to serve for terms of three years each.
(2) To ratify the selection by the Board of Directors of Coopers & Lybrand
as certified public accountants for the Company for the fiscal year
ending May 31, 1995.
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Shareholders of record as of the close of business on July 19, 1994
are entitled to receive notice of and to vote at the Annual Meeting.
We urge you to date, sign and mail the enclosed proxy in the envelope
provided, even if you hold only a few shares and whether or not you expect to
be present in person. You may revoke your proxy at any time prior to its
exercise by filing with the Secretary of the Company a properly executed
instrument revoking such proxy or by filing a properly executed proxy bearing a
later date.
By Order of the Board of Directors,
/s/ Daniel P. Hann
-------------------------
Daniel P. Hann, Secretary
July 29, 1994
Warsaw, Indiana
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
<PAGE> 4
(LOGO)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 16, 1994
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Biomet, Inc.
(the "Company") in connection with the solicitation by the Board of Directors
of the Company of proxies to be voted at the Annual Meeting of Shareholders to
be held at the Century Center, 120 South St. Joseph Street, South Bend,
Indiana, on Friday, September 16, 1994, at 1:30 p.m., local time, or any
adjournment thereof. This Proxy Statement and the accompanying form of proxy
were first mailed to shareholders on or about July 29, 1994.
Each properly executed proxy returned prior to the meeting will be
voted in accordance with the directions contained therein. Proxies may be
revoked at any time prior to exercise by written notice to the Secretary of the
Company or by filing a properly executed proxy bearing a later date.
Appropriate forms will be available at the Annual Meeting for persons who wish
to vote in person.
As of July 19, 1994, the record date for the Annual Meeting, there
were 114,517,051 Common Shares of the Company issued and outstanding, each of
which is entitled to one vote on each matter to come before the meeting.
Shareholders do not have cumulative voting rights.
All expenses in connection with the solicitation of proxies will be
paid by the Company. The Company will also provide to all brokers, dealers,
banks and voting trustees, and their nominees, copies of this Proxy Statement,
the accompanying form of proxy and the Annual Report for mailing to beneficial
owners and, upon request therefor, will reimburse such record holders for their
reasonable expenses in connection therewith. The Company expects to solicit
proxies primarily by mail, but directors, officers and employees of the Company
may also solicit in person or by telephone.
Shareholder proposals to be considered for presentation at the 1995
Annual Meeting of Shareholders must be submitted in writing and received by the
Company's Secretary by March 31, 1995. The mailing address of the principal
executive offices of the Company is Airport Industrial Park, P.O. Box 587,
Warsaw, Indiana 46581-0587.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain data with respect to those
persons known by the Company to be the beneficial owners of more than 5% of the
outstanding Common Shares of the Company as of July 19, 1994. Except as
otherwise indicated in the notes to the table, each person has sole voting and
investment power with respect to the shares indicated.
<PAGE> 5
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
---------------- ----------------------- --------
<S> <C> <C>
State Farm Mutual Automobile 8,277,000 7.2%
Insurance Company and
related entities
One State Farm Plaza
Bloomington, Illinois 61710
</TABLE>
According to information contained in a Schedule 13G filing with the
Securities and Exchange Commission made by State Farm Mutual Automobile
Insurance Company ("State Farm") dated January 28, 1994, State Farm has sole
voting and dispositive power with respect to these shares, all of which were
acquired for investment in the ordinary course of its business and not for the
purpose of influencing control of the Company.
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth beneficial ownership of Common Shares
of the Company as of July 19, 1994 by each director of the Company, each
executive officer of the Company named in the Summary Compensation Table
herein, and by all directors and executive officers of the Company as a group.
Unless otherwise stated, the beneficial owners exercise sole voting and/or
investment power over their shares.
<TABLE>
<CAPTION>
NAME OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES BENEFICIALLY OWNED OF CLASS
- - ---------------- ------------------------- --------
<S> <C> <C>
Garry L. England 161,535 (1) 0.1%
Jerry L. Ferguson 1,862,360 (2) 1.6
Daniel P. Hann 50,160 (3) *
M. Ray Harroff 323,497 (4) 0.3
Thomas F. Kearns, Jr. 7,000 (5) *
Dane A. Miller, Ph.D. 5,292,894 (6) 4.6
Jerry L. Miller 2,286,534 (7) 2.0
Kenneth V . Miller 131,139 (8) 0.1
Charles E. Niemier 460,699 (9) 0.4
Niles L. Noblitt 3,173,349 (10) 2.8
James M. Norris 51,218 (11) *
Joel P. Pratt 101,806 (12) 0.1
Marilyn Tucker Quayle 5,000 (13) *
L. Gene Tanner 75,000 (14) 0.1
All Directors and Executive Officers as
a Group (18 persons, including the foregoing) 14,204,212 (15) 12.4
</TABLE>
- - -------------------
* Represents less than 1% of the Company's outstanding common stock.
(1) Includes 27,036 shares held jointly with his wife, as to which Mr.
England has shared voting and investment power; 8,333 shares held for
Mr. England's account in the Company's Employee Stock Bonus
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<PAGE> 6
Plan , as to which Mr. England has voting power but no investment
power; 12,295 shares held in Mr. England's account in the Company's
Profit Sharing Plan and Trust qualified under Section 401(k) of the
Internal Revenue Code (the "Profit Sharing Plan"), as to which Mr.
England has no voting or investment power; and 42,925 shares subject
to options exercisable within 60 days.
(2) Includes 1,277,756 shares held jointly with his wife, as to which
Mr. Ferguson has shared voting and investment power; 210,836
shares owned of record by his wife and 17,280 shares held in an
individual retirement account ("IRA") for her benefit, as to which
Mr. Ferguson has no voting or investment power and disclaims
beneficial ownership; 48,760 shares owned of record by his son, as to
which Mr. Ferguson has no voting or investment power and disclaims
beneficial ownership; and 5,000 shares subject to options exercisable
within 60 days.
(3) Includes 13,650 shares held jointly with his wife, as to which Mr.
Hann has shared voting and investment power; 2,784 shares held
for Mr. Hann's account in the Company's Employee Stock Bonus Plan, as
to which Mr. Hann holds voting power but no investment power;
3,101 shares held in Mr. Hann's account in the Company's Profit
Sharing Plan, as to which Mr. Hann has no voting or investment power;
and 30,625 shares subject to options exercisable within 60 days.
(4) Includes 174,152 shares owned of record by his wife, as to which Mr.
Harroff has no voting or investment power and disclaims
beneficial ownership; and 5,000 shares subject to options exercisable
within 60 days.
(5) Includes 5,000 shares subject to options exercisable by Mr. Kearns
within 60 days.
(6) Includes 5,205,162 shares held jointly with his wife, as to which Dr.
Miller has shared voting and investment power; 19,988 shares held in
an IRA for the benefit of his wife, as to which Dr. Miller has no
voting or investment power and disclaims beneficial ownership; 12,244
shares held for Dr. Miller's account in the Company's Employee Stock
Bonus Plan, as to which Dr. Miller holds voting power but no
investment power; and 8,094 shares held in Dr. Miller's account in the
Company's Profit Sharing Plan, as to which he has no voting or
investment power.
(7) Includes 144,000 shares held in trust for the benefit of Mr. Miller's
minor children as to which he has shared voting and investment power
and as to which Mr. Miller disclaims beneficial ownership; and 5,000
shares subject to options exercisable within 60 days.
(8) Includes 5,000 shares subject to options exercisable by Mr. Miller
within 60 days.
(9) Includes 130,548 shares owned of record by his wife and 13,588 shares
held in an IRA for her benefit, as to which Mr. Niemier has no voting
or investment power and disclaims beneficial ownership; 31,592 shares
held in an IRA for Mr. Niemier's benefit as to which he has
investment power but no voting power; 10,324 shares held for Mr.
Niemier's account in the Company's Employee Stock Bonus Plan, as to
which Mr. Niemier holds voting power but no investment power;
7,734 shares held in Mr. Niemier's account in the Company's Profit
Sharing Plan, as to which he has no voting or investment power;
126,040 shares held in trust for the benefit of Mr. Niemier's minor
children, as to which he has no voting or investment power and
disclaims beneficial ownership; and 10,325 shares subject to options
exercisable within 60 days.
(10) Includes 1,553,144 shares owned of record by his wife and 14,400
shares held in an IRA for her benefit, as to which Mr. Noblitt
has no voting or investment power and disclaims beneficial
ownership; 16,512
3
<PAGE> 7
shares owned of record by his children, as to which Mr. Noblitt has no
voting or investment power and disclaims beneficial ownership; 21,600
shares held jointly with his wife, as to which he has shared voting
and investment power; 12,767 shares held for Mr. Noblitt's account
in the Company's Employee Stock Bonus Plan, as to which Mr. Noblitt
holds voting power but no investment power; and 14,361 shares held in
Mr. Noblitt's account in the Company's Profit Sharing Plan, as to
which he has no voting or investment power.
(11) Includes 12,919 shares held jointly with his wife, as to which Mr.
Norris has shared voting and investment power; 8,071 shares held
for Mr. Norris' account in the Company's Employee Stock Bonus Plan, as
to which Mr. Norris holds voting power but no investment power; and
7,635 shares held in Mr. Norris' account in the Company's Profit
Sharing Plan, as to which he has no voting or investment power.
(12) Includes 15,767 shares owned of record by his wife and 1,872 shares
held in an IRA for her benefit, as to which Mr. Pratt has no voting or
investment power and disclaims beneficial ownership; 5,427 shares held
for Mr. Pratt's account in the Company's Employee Stock Bonus Plan, as
to which Mr. Pratt has voting power but no investment power; 3,793
shares held in Mr. Pratt's account in the Company's Profit Sharing
Plan, as to which he has no voting or investment power; and 18,300
shares subject to options exercisable within 60 days.
(13) Includes 5,000 shares subject to options exercisable by Ms. Quayle
within 60 days.
(14) Includes 5,000 shares subject to options exercisable by Mr. Tanner
within 60 days.
(15) Includes 49,600 shares subject to options exercisable within 60 days
held by 4 executive officers of the Company who are not directors and
are not named in the Summary Compensation Table herein; 11,795 shares
held in the Company's Employee Stock Bonus Plan for the accounts of
these executive officers, as to which they have voting power but no
investment power; and 8,081 shares held in the Company's Profit
Sharing Plan for the accounts of these executive officers, as to which
they have no voting or investment power.
ELECTION OF DIRECTORS (ITEM 1)
The Company's Bylaws divide the Board of Directors into three classes,
with one class to be elected at each annual meeting of shareholders. At the
Annual Meeting, the shareholders will vote to elect four directors in Class II
to serve for a three-year term expiring in 1997, and until their successors are
elected and qualified. Class III Directors and Class I Directors will not be
elected at the Annual Meeting and will continue in office until the annual
meetings of shareholders to be held in 1995 and 1996, respectively. The Board
of Directors has nominated the persons named below for election as Class II
Directors. The name, age, business background, and tenure as a director of the
Company of each nominee and each director continuing in office are set forth
below. Jerry L. Miller and Kenneth V. Miller are brothers; no other family
relationship exists among any of the nominees or continuing directors. Except
as otherwise indicated, the principal occupations of the nominees and
continuing directors have not changed during the last five years. The nominees
for director have consented to serve, if elected, and the Company has no reason
to believe that any of the nominees will be unable to serve. Should any
nominee become unavailable for any reason, proxies will be voted for an
alternate candidate chosen by the Board of Directors, unless the Board of
Directors reduces the number of directors. To be elected a director, a nominee
must receive the affirmative vote of a plurality of votes of the Common Shares
present or
4
<PAGE> 8
represented at the meeting and entitled to vote in the election of directors.
Withheld votes and broker non-votes (which are treated as "withheld" votes) are
not counted as votes in favor of any nominee. Unless authority to vote for a
nominee is withheld, the accompanying proxy will be voted FOR the nominees
named.
DIRECTORS STANDING FOR ELECTION
NAME, AGE AND BUSINESS EXPERIENCE
CLASS II: FOR A THREE-YEAR TERM EXPIRING AT THE 1997 ANNUAL MEETING OF
SHAREHOLDERS
DANE A. MILLER, PH.D., age 48 . . . . . . . . . . . . . . . Director since 1977
Member: Compensation, Executive and Stock Option Committees. Dr.
Miller is the President and Chief Executive Officer of the Company and is one
of its four founders. Dr. Miller is a director of 1st Source Corporation (bank
holding company) and a trustee of General Motors Institute, and serves on the
Engineering Advisory Committee of the University of Cincinnati.
JERRY L. FERGUSON, age 53 . . . . . . . . . . . . . . . . . Director since 1978
Member: Executive and Nominating Committees. Mr. Ferguson, one of the
four founders of the Company, is the former owner of Classic Car Centre, Inc.
(automobile dealership) and since December 1993 has served as Special Projects
Advisor to the Company.
THOMAS F. KEARNS, JR., age 57 . . . . . . . . . . . . . . . Director since 1983
Mr. Kearns is a retired partner of Bear, Stearns & Co., Inc. (investment
banking firm). Mr. Kearns is a trustee of the University of North Carolina.
DANIEL P. HANN, age 39 . . . . . . . . . . . . . . . . . . Director since 1989
Mr. Hann is the Vice President, General Counsel and Secretary of the
Company. Mr. Hann is a director or trustee of several civic and charitable
organizations, including The Indiana Nature Conservancy.
DIRECTORS CONTINUING IN OFFICE
NAME, AGE AND BUSINESS EXPERIENCE
CLASS III: TERM EXPIRES AT THE 1995 ANNUAL MEETING OF SHAREHOLDERS
M. RAY HARROFF, age 54 . . . . . . . . . . . . . . . . . . Director since 1978
Mr. Harroff, one of the four founders of the Company, is President of
Stonehenge Golf Club, Inc. (golf country club) and Stonehenge Links Village
Development (real estate development).
JERRY L. MILLER, age 48 . . . . . . . . . . . . . . . . . . Director since 1979
Member: Audit, Compensation, Executive, Nominating and Stock Option
Committees. Mr. Miller has been a principal in Havirco, Inc. (private
investment management) since January 1989. Mr. Miller is a director of
Hansvedt Industries, Inc. (machine tool manufacturer) and Old Kent Bank
Southwest, Kalamazoo, Michigan.
CHARLES E. NIEMIER, age 38 . . . . . . . . . . . . . . . . Director since 1987
Mr. Niemier has served as Senior Vice President - International
Operations of the Company since November 1991. He previously served as Senior
Vice President - Warsaw Operations from May 1990 to November 1991 and as Vice
President - Finance from May 1984 to November 1991. Mr. Niemier is a director
of Raffensperger, Hughes & Co., Incorporated (investment banking firm) and
Acordia School Benefits, Inc. (third party insurance
5
<PAGE> 9
administrator). He is also a director or trustee of several educational, civic
and charitable organizations, including Valparaiso University.
JAMES M. NORRIS, age 55 . . . . . . . . . . . . . . . . . . Director since 1987
Mr. Norris served as Corporate Vice President of the Company and
President of EBI from January 1990 until his retirement in April 1993. Prior
thereto, Mr. Norris served as Vice President - Sales and Marketing of the
Company.
CLASS I: TERM EXPIRES AT THE 1996 ANNUAL MEETING OF SHAREHOLDERS
NILES L. NOBLITT, age 43 . . . . . . . . . . . . . . . . . Director since 1978
Member: Audit, Executive and Stock Option Committees. Mr. Noblitt is
the Chairman of the Board of the Company and is one of its four founders. From
July 1988 to January 1990, Mr. Noblitt served as President of the Company's
subsidiary, Electro-Biology, Inc. ("EBI"). Mr. Noblitt is a trustee of Rose
Hulman Institute of Technology.
KENNETH V. MILLER, age 46 . . . . . . . . . . . . . . . . . Director since 1979
Member: Audit, Compensation, Executive, Nominating and Stock Option
Committees. Mr. Miller has been a principal in Havirco, Inc. (private
investment management) since January 1989. Mr. Miller is a director of
Hansvedt Industries, Inc. (machine tool manufacturer).
L. GENE TANNER, age 61 . . . . . . . . . . . . . . . . . . Director since 1985
Mr. Tanner has been Chairman of the Board of Raffensperger, Hughes &
Co., Incorporated (investment banking firm) since January 1990, where he
previously served as President. Mr. Tanner is a director of Circle Ventures,
Inc. (venture capital fund).
MARILYN TUCKER QUAYLE, age 45 . . . . . . . . . . . . . . . Director since 1993
Ms. Quayle is an attorney currently engaged in private practice as a
partner for the Indianapolis, Indiana law firm of Krieg, Devault, Alexander and
Capehart. She is also Vice President and Treasurer of BTC, Inc. (public
speaking company). Previously Ms. Quayle was Chairman of the International
Disaster Advisory Committee, Agency for International Development.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Executive Committee
comprised of Dane A. Miller, Niles L. Noblitt, Jerry L. Ferguson, Kenneth V.
Miller and Jerry L. Miller. The Board of Directors also has a Nominating
Committee comprised of Jerry L. Ferguson, Jerry L. Miller and Kenneth V.
Miller; an Audit Committee compromised of Jerry L. Miller, Kenneth V. Miller,
and Niles L. Noblitt; and a Compensation Committee and Stock Option Committee
comprised of Dane A. Miller, Jerry L. Miller and Kenneth V. Miller.
The Executive Committee has full authority from the Board of Directors
to conduct the business of the Company within the limits prescribed by Indiana
law. The function of the Audit Committee is to monitor the internal controls
and financial reporting of the Company and its subsidiaries; to review these
matters with the President and Chief Executive Officer and the Company's
independent accountants; to review the scope and parameters of the independent
accountants' audit of the Company's consolidated financial statements; to
establish policies and make recommendations to the Board of Directors with
respect to approval of transactions
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<PAGE> 10
between the Company and its directors, officers and employees; and to make
recommendations to the Board of Directors concerning the annual appointment of
the Company's independent accountants. The Compensation Committee is
responsible for administering the compensation programs for the executive
officers and employees of the Company.
The Stock Option Committee administers the stock option plans of the
Company. Presently, no member of the Stock Option Committee participates in
any of these plans with the exception that the two non-employee director
members, Jerry L. Miller and Kenneth V. Miller, receive an option to purchase
5,000 Common Shares of the Company every three years during their service as a
non-employee director of the Company pursuant to the terms of the Biomet, Inc.
1992 Employee and Non-Employee Director Stock Option Plan.
The Nominating Committee is responsible for, among other things,
receiving and reviewing recommendations for nominations to the Board of
Directors, establishing eligibility criteria and procedures for identifying
potential nominees to the Board of Directors, and recommending individuals as
nominees for election to the Board of Directors. The Nominating Committee will
consider for nomination as directors, persons recommended by shareholders
provided that such recommendations are in writing and delivered to the
Secretary, Biomet, Inc., Airport Industrial Park, P.O. Box 587, Warsaw, Indiana
46581-0587, and delivered to or mailed and received at such address not less
than sixty days nor more than ninety days prior to the Annual Meeting of
Shareholders typically held on the third Friday in September. In the event
that less than seventy days' notice or prior public disclosure of the date of
the Annual Meeting is given or made to shareholders, any notice of nomination
by a shareholder must be received not later than the close of business on the
tenth day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made.
The Board of Directors, the Executive Committee, the Compensation
Committee, the Stock Option Committee, the Nominating Committee and the Audit
Committee of the Company met four times, four times, two times, two times, one
time and one time, respectively, during the past fiscal year. No director
attended fewer than 75% of the aggregate of the meetings of the Board of
Directors and of any committee of the Board of Directors of which he or she was
a member.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an employee receives an annual
fee of $4,000, plus $600 and reimbursement for travel expenses for each meeting
of the Board of Directors attended in person and a fee of $300 for attending a
meeting by telephone. Directors who are employees of the Company receive a fee
of $600 for each board meeting attended in person and a fee of $300 for
attending a meeting by telephone. Each member of the Executive Committee of
the Board of Directors who is not an employee of the Company receives an
additional annual fee of $4,000, plus $600 and reimbursement for travel
expenses for each committee meeting attended in person and a fee of $300 for
attending a committee meeting by telephone. No fees are paid for attending
meetings of the Audit, Compensation, Nominating or Stock Option Committees.
Each director who is not an employee of the Company is automatically
granted an option to purchase 5,000 Common Shares of the Company every three
years during his or her service on the Board of Directors pursuant to the terms
of the Biomet, Inc. 1992 Employee and Non-Employee Director Stock Option Plan
(the "Plan"). The Plan provides that the purchase price of option shares may
not be less than the fair market value per Common Share on the date of grant
and the term of the option may not exceed ten years from the date of grant.
Under
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<PAGE> 11
the terms of the Plan, neither the Board of Directors nor the Compensation
Committee has the authority to alter or modify the number of option shares
granted or interval of grants to the non-employee directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1994, the Compensation Committee was comprised of
Dane A. Miller, Kenneth V. Miller and Jerry L. Miller. Dane A. Miller serves
as the Company's President and Chief Executive Officer.
EXECUTIVE COMPENSATION
GENERAL
The following Summary Compensation Table sets forth certain
information with respect to the compensation of the Company's President and
Chief Executive Officer and the five other most highly compensated executive
officers for the past three fiscal years ending May 31 who served in such
capacities as of May 31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS ALL OTHER
FISCAL YEAR ---------------------- ----------------- COMPENSATION(1)
NAME AND PRINCIPAL POSITION ENDED MAY 31 SALARY ($) BONUS ($) STOCK OPTIONS (#) ($)
- - --------------------------- ------------ ---------- --------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Dane A. Miller, Ph.D. 1994 154,665 91,600 - 14,095
President and 1993 148,642 84,700 - 13,895
Chief Executive Officer 1992 131,669 141,500 - 13,104
Niles L. Noblitt 1994 154,665 91,600 - 14,095
Chairman of the Board 1993 144,529 84,700 - 13,895
1992 124,615 141,500 - 13,104
Charles E. Niemier 1994 155,530 95,400 25,000 14,095
Senior Vice President - 1993 148,456 70,700 - 13,895
International Operations 1992 139,402 117,900 - 13,104
Garry L. England 1994 141,545 95,400 25,000 11,695
Senior Vice President - 1993 135,165 63,500 - 11,495
Warsaw Operations 1992 126,760 106,100 - 10,904
Daniel P. Hann 1994 141,545 95,400 25,000 14,095
Vice President, General 1993 135,165 63,500 10,000 13,895
Counsel and Secretary 1992 132,087 106,100 - 13,104
Joel P. Pratt 1994 141,545 95,400 50,000 11,695
Vice President and General 1993 135,165 63,500 10,000 11,495
Manager of Biomet Medical Products 1992 126,760 106,100 - 10,904
</TABLE>
(1) Represents the value of Company contribution to the Employee Stock Bonus
Plan and the Profit Sharing Plan. Also includes director fees paid to Dr.
Miller, Mr. Noblitt, Mr. Niemier and Mr. Hann.
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<PAGE> 12
STOCK OPTIONS
The following table sets forth stock options granted in fiscal year
1994 to each of the Company's executive officers named in the Summary
Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
PERCENT OF TOTAL AT ASSUMED ANNUAL RATES OF STOCK PRICE
OPTIONS OPTIONS GRANTED EXERCISE APPRECIATION FOR OPTION TERM
GRANTED TO EMPLOYEES IN PRICE EXPIRATION ---------------------------------
NAME (#) FISCAL YEAR 1994 ($/SH) DATE 5% ($) 10% ($)
- - ------------------ ------- ---------------- -------- ------------- ------- -------
<S> <C> <C> <C> <C> <C>
Charles E. Niemier 25,000 1.7 9.75 July 20, 2003 153,600 387,600
Garry L. England 25,000 1.7 9.75 July 20, 2003 153,600 387,600
Daniel P. Hann 25,000 1.7 9.75 July 20, 2003 153,600 387,600
Joel P. Pratt 25,000 1.7 9.75 July 20, 2003 153,600 387,600
Joel P. Pratt 25,000 1.7 10.50 June 3, 2003 165,400 417,400
</TABLE>
The following table sets forth the number of shares acquired on exercise of
stock options and the aggregate gain realized on exercise in fiscal year 1994
by the Company's executive officers named in the Summary Compensation Table.
Mr. England and Mr. Pratt were the only executive officers identified in the
Summary Compensation Table who exercised stock options in fiscal year 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
SHARES AT MAY 31, 1994 (#) OPTIONS AT MAY 31, 1994 ($)
ACQUIRED VALUE REALIZED ------------------------------- ---------------------------------
NAME ON EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------- --------------- -------------- ----------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Garry L. England 13,200 121,200 39,800 34,600 176,400 45,600
Joel P. Pratt 11,400 58,525 11,250 99,550 46,900 191,400
</TABLE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
POLICIES AND OBJECTIVES
The Compensation Committee and the Stock Option Committee of the Board
of Directors are comprised of the same persons. These committees (collectively
referred to herein as the "Committee") are responsible for administering the
compensation and benefit programs for the Company's employees, including the
executive officers. The Committee annually reviews and evaluates cash
compensation and stock option grant recommendations made by the President and
Chief Executive Officer for the executive officers (other than for himself)
along with the rationale for such recommendations. The Committee examines
these recommendations in relation to the Company's overall objectives and makes
compensation recommendations to the Board of Directors for final approval. The
Committee also sends to the Board of Directors for approval its recommendations
on compensation for the President and Chief Executive Officer, who does not
participate in the Committee's decisions as to his compensation package.
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<PAGE> 13
The Company's current executive compensation policies and practices
reflect the compensation philosophies of the Company's four founders - Dane A.
Miller, Niles L. Noblitt, Jerry L. Ferguson and M. Ray Harroff. The Company is
committed to maximizing shareholder value through performance and the Committee
believes that superior performance by the Company's executive and management
team is an essential element to reaching that goal. The program is designed to
help achieve this objective by (1) attracting, retaining and rewarding highly
qualified and productive persons, (2) relating compensation to both Company and
individual performance, (3) establishing compensation levels that are
internally equitable and externally competitive, and (4) encouraging an
ownership interest and instilling a sense of pride in the Company which are
consistent with the interests of the Company's shareholders.
The Committee firmly believes that all employees (which the Company
refers to as Team Members rather than "employees") play a critical role in the
Company's success and, therefore, all employees participate in the Company's
cash and equity compensation plans. The Committee continues to believe in one
of the founding philosophies of the Company that equity compensation in the
form of stock options is an excellent incentive for all employees, including
executive officers, and serves to align the interests of employees, management
and shareholders.
Based on these objectives, the compensation package of the executive
officers consists of four primary elements: (1) base salary, (2) incentive
bonuses, (3) stock options, and (4) participation in employee benefit plans.
BASE SALARY. A base salary is set for each executive officer at the
beginning of each calendar year by the Board of Directors after receiving a
recommendation from the Committee. The Committee recommends to the Board of
Directors what it believes to be an appropriate base salary for each executive
officer based on the Company's performance, the executive officer's
performance, the Company's future objectives and challenges, and the current
competitive environment. Base salaries are intended to be relatively moderate,
but competitive. During fiscal year 1994, the base salary of the executive
officers as a group increased approximately 5%.
INCENTIVE BONUSES. The Company's policy is to base a significant
portion of each executive officer's annual compensation on the financial
performance of the Company. Approximately one-half of each executive officer's
potential annual cash compensation is based upon the incentive bonus which is
accrued and paid at the conclusion of each fiscal year. The bonus is
determined on the basis of a formula which compares actual performance against
targets which are established by the Committee and approved by the Board of
Directors at the beginning of each fiscal year of the Company. The bonus
targets are equally weighted between revenues growth and earnings growth of the
Company during the fiscal year. The target bonus for each officer is
determined by the Committee based upon the goals, objectives, responsibilities
and length of service of each officer.
STOCK OPTIONS. Stock options have always been a key element in the
Company's long-term compensation program. The primary purpose of stock options
is to provide executive officers and other employees with a personal and
financial interest in the success of the Company through stock ownership,
thereby aligning the interests of such persons with those of the Company's
shareholders. This broad-based program is a vital element of the Company's
goal to empower and motivate outstanding long-term contributions by employees
within all levels of the Company. The Committee believes that stock options
help create an entrepreneurial environment within the Company and instill the
spirit of a small company. Additionally, the committee believes stock
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<PAGE> 14
options provide broad incentives for the day-to-day achievements of all
employees in order to sustain and enhance the Company's long-term performance.
The Committee believes that the value of such stock options will
reflect the financial performance of the Company over the long term. Because
the Company's stock option program provides for a one-year waiting period
before options may be exercised and an exercise price at fair market value as
of the date of grant, executive officers and other employees benefit from stock
options only when the Company's stock price increases over time. Individual
executive officer stock option awards are based on level of responsibility,
individual contribution, length of service, and total number of Common Shares
owned in relation to other executive officers in the Company. Currently, there
are more than 675 employees below the executive officer level who have been
awarded one or more stock options under this program and more than 85% of the
option shares have been granted to employees other than executive officers.
BENEFIT PLANS. The executive officers also participate in the
Company's Profit Sharing Plan and Trust qualified under Section 401(k) of the
Internal Revenue Code (the "Profit Sharing Plan") and the Employee Stock Bonus
Plan qualified under Section 401(a) of the Internal Revenue Code (the "ESBP").
All executive officers and employees having at least 90 days of service and who
are at least 18 years of age are eligible to participate in both plans. With
respect to the Profit Sharing Plan, each year the Company, in its sole
discretion, may match 50% of employee contributions up to a maximum amount
equal to 5% of the employee's compensation, either in cash or in Common Shares
of the Company, and contribute such amounts to the Profit Sharing Plan. All
contributions to the Profit Sharing Plan are allocated to accounts maintained
on behalf of each participating employee and, to the extent vested, are
distributed to the employee upon retirement, death, disability or termination
of service. Historically, the Company has made its contribution in the form of
Common Shares of the Company. With respect to the ESBP, the Board of Directors
may make contributions to the plan in the form of Common Shares or cash in such
amounts, if any, as it may determine in its sole discretion, and participating
employees may make voluntary contributions to the ESBP in amounts up to 10% of
their annual compensation. The funds accumulated under this plan are invested
by the trustee primarily in Common Shares of the Company. Distributions are
made to employees at retirement, death, disability or termination of service,
in Common Shares or, at the employee's option, in cash. Because a significant
portion of the assets of both of these plans is invested in the Company's
stock, both plans further serve to align the interests of employees, management
and shareholders.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
The compensation for the Company's President and Chief Executive
Officer, Dane A. Miller, is established by the Committee, without participation
by Dr. Miller, and approved by the Board of Directors. Over the years, Dr.
Miller has received modest increases in his cash compensation, notwithstanding
the strong financial results of the Company. These modest increases reflect
his cost-conscious management style and belief that the financial success of
management should be closely aligned with shareholder interests through
appreciation in the Company's stock. It is important to note that Dr. Miller
has never received a stock option and he does not participate in the Company's
stock option program. Notwithstanding an increase in the Company's sales and
earnings in excess of 11% for fiscal year 1994, the total compensation paid to
Dr. Miller increased less than 6%.
Under the leadership and vision of Dr. Miller and Niles L. Noblitt,
Chairman of the Board, the Company and its shareholders continue to enjoy
outstanding performance and success. The Committee and entire Board of
Directors are proud that Dr. Miller and the other executive officers have been
nationally recognized on several
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<PAGE> 15
occasions as providing one of the best returns to shareholders relative to
executive compensation.
The Committee believes that the executive compensation programs and
practices described above are conservative and fair to the Company's
shareholders. The Committee further believes that these programs and practices
serve the best interests of the Company and its shareholders.
Respectfully submitted,
Kenneth V. Miller, Chairman
Dane A. Miller, Ph.D.
Jerry L. Miller
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Shares with the cumulative total return of the Standard &
Poor's 500 Composite Stock Index (the "S&P 500 Index") and the Standard &
Poor's Medical Products and Supplies Industry Group Index (the "S&P Medical
Index") for the five fiscal years ending May 31, 1994. The comparison assumes
$100 invested on May 31, 1989, in the Company's Common Shares and in each of
the indices.
1989 1990 1991 1992 1993 1994
Year Ended May 31
Biomet, Inc 100.00 122.12 244.23 298.97 176.86 164.22
S & P 500 Index 100.00 116.61 130.36 143.21 159.84 166.64
S & P Medical Index 100.00 116.05 169.41 190.00 154.14 145.17
CERTAIN TRANSACTIONS
L. Gene Tanner, a member of the Board of Directors of the Company, is an
executive officer and director of the investment banking firm of Raffensperger,
Hughes & Co., Incorporated, which provided services to the Company during the
past fiscal year and is expected to do so in the future.
Dane A. Miller, President and Chief Executive Officer and a member of the
Board of Directors of the Company, is a majority shareholder in a corporation
which provides the use of an aircraft to the Company on an as-needed basis.
The Company pays a monthly minimum fee of $14,250 to that corporation for the
use of
13
<PAGE> 17
the aircraft, and also pays an hourly fee of $650 for the first 30 hours of use
per month and $888 per hour thereafter. The Company made payments to that
corporation of approximately $483,100 during the last fiscal year. The Board
of Directors believes the rental rate and other terms of this arrangement to be
no less favorable to the Company than would have been available in the absence
of the relationship described.
Jerry L. Ferguson, a member of the Board of Directors and one of the
founders of the Company, has served as Special Projects Advisor to the Company
since December 1993. Mr. Ferguson served as Executive Vice President of Sales
and Marketing of the Company from 1977 to 1984 and the Board is utilizing his
experience and talents to assist in the development of the sales and marketing
efforts of Walter Lorenz Surgical, Inc., a wholly-owned subsidiary of the
Company. Additionally, Mr. Ferguson assists the Company in evaluating various
acquisition opportunities. Mr. Ferguson serves as an independent contractor
and reports to the Board of Directors. He is paid an annual fee of $100,000
for his services.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Common Shares and other equity securities of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms filed by them.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with on a timely basis during the fiscal year ended May 31, 1994.
RATIFICATION OF SELECTION OF CERTIFIED PUBLIC ACCOUNTANTS (ITEM 2)
Subject to ratification by the shareholders, the Board of Directors has
selected Coopers & Lybrand as independent accountants for the Company for the
fiscal year ending May 31, 1995. The Company has been advised by such firm
that neither it nor any of its associates has any direct or material indirect
financial interest in the Company.
Representatives of Coopers & Lybrand are expected to be present at the
Annual Meeting and to be available to respond to appropriate questions
concerning the audit for the fiscal year ended May 31, 1994.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company has no knowledge of any matters to be presented for consideration at
the Annual Meeting other than those referred to above. If (a) any matters not
within the knowledge of the Board of Directors as of the date of this Proxy
Statement should properly come before the meeting; (b) a person not named
herein is nominated at the meeting for election as a director because a nominee
named herein is unable to serve or for good cause will not serve; (c) any
proposals properly omitted from this Proxy Statement and the form of proxy
should come before the meeting; or (d) any matters
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<PAGE> 18
should arise incident to the conduct of the meeting, then the proxies will be
voted in accordance with the recommendations of the Board of Directors of the
Company.
By Order of the Board of Directors,
/s/ Daniel P. Hann
-------------------------
Daniel P. Hann, Secretary
July 29, 1994
15
