<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to 14a-11(c) or Rule 14a-12
BIOMET INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[BIOMET INC. LOGO]
To the Shareholders of Biomet, Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Biomet, Inc. (the "Company") to be held on Friday, September 19, 1997, 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 L.L.P., as independent 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
Dane A. Miller, Ph.D.
President and Chief
Executive Officer
<PAGE> 3
[BIOMET INC. LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 19, 1997
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 19, 1997, 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 L.L.P., as independent accountants for the Company for the fiscal
year ending May 31, 1998.
(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 11, 1997 are
entitled to receive notice of and to vote at the Annual Meeting.
We urge you to complete, date and sign the enclosed proxy and return it to
us promptly in the envelope provided, even if you hold only a few shares and
regardless of whether or not you expect to be present at the Annual Meeting 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
August 15, 1997
Warsaw, Indiana
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
<PAGE> 4
[BIOMET INC. LOGO]
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 19, 1997
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 19, 1997, 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 August 15, 1997.
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 shareholders who wish to vote in
person.
As of July 11, 1997, the record date for the Annual Meeting, there were
111, 404,239 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 1998 Annual
Meeting of Shareholders must be submitted in writing and received by the
Company's Secretary by April 7, 1998. 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
issued and outstanding Common Shares of the Company as of July 11, 1997.
Except as otherwise indicated in the notes to the table, each shareholder 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>
FMR Corp. 11,650,192(1) 10.5%
82 Devonshire, Street
Boston, Massachusetts 02109-3614
State Farm Mutual Automobile 8,277,000(2) 7.4%
Insurance Company and
related entities
One State Farm Plaza
Bloomington, Illinois 61710
Wellington Management Company 7,434,052(3) 6.7%
75 State Street
Boston, Massachusetts 02109
</TABLE>
1 According to information contained in a Schedule 13G filing with the
Securities and Exchange Commission made by FMR Corp. ("FMR") dated February 14,
1997, FMR has no voting power for 11,337,932 shares. FMR acquired these shares
for investment purposes in the ordinary course of its business.
2 According to information contained in a Schedule 13G filing made by State
Farm Mutual Automobile Insurance Company ("State Farm") dated January 3, 1997,
State Farm acquired these shares for investment purposes in the ordinary course
of its business.
3 Wellington Management Company ("WMC") is an investment adviser
registered with the Securities and Exchange Commission under Section 203 of the
Investment Advisers Act of 1940, as amended. According to information
contained in a Schedule 13G filing dated January 24, 1997, WMC has shared
voting power for 3,881,090 shares, no voting power for 3,552,962 shares and
shared investment power for 7,434,052 shares, all of which were acquired for
investment purposes in the ordinary course of its business.
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth beneficial ownership of Common Shares of
the Company as of July 11, 1997 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 138,474 (1) 0.1%
Jerry L. Ferguson 1,761,817 (2) 1.6%
Daniel P. Hann 81,508 (3) *
C. Scott Harrison, M.D. 504,959 (4) 0.5%
M. Ray Harroff 40,143 (5) *
Thomas F. Kearns, Jr. 5,859 *
Dane A. Miller, Ph.D. 4,730,046 (6) 4.2%
Jerry L. Miller 2,185,700 (7) 2.0%
Kenneth V. Miller 8,900 (8) *
Charles E. Niemier 443,192 (9) 0.4%
Niles L. Noblitt 2,912,354 (10) 2.6%
Marilyn Tucker Quayle 5,000 (11) *
L. Gene Tanner 71,886 *
</TABLE>
_________________
All Directors and Executive Officers as a Group
(16 persons, including the foregoing) 13,043,073 (12) 11.7%
*Represents less than .1% of the Company's issued and outstanding Common Shares.
2
<PAGE> 6
(1) Includes 27,036 shares held jointly with his wife, as to which Mr.
England has shared voting and investment power; 9,351 shares held for Mr.
England's account in the Company's Employee Stock Bonus Plan qualified
under Section 401(a) of the Internal Revenue Code (the "ESBP"), as to
which Mr. England has voting power but no investment power; 13,214 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
"401(k)"), as to which Mr. England has no voting or investment power;
1,800 shares held in an individual retirement account ("IRA") for Mr.
England's benefit as to which he has investment power but no voting power;
1,500 shares owned of record by Mr. England's minor children, as to which
Mr. England has no voting or investment power and disclaims beneficial
ownership; and 22,850 shares subject to options exercisable within 60
days.
(2) Includes 1,275,116 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 IRA for her benefit, as to
which Mr. Ferguson has no voting or investment power and disclaims
beneficial ownership; 857 shares held for Mr. Ferguson's account in the
ESBP, as to which Mr. Ferguson has voting power but no investment power;
and 26,136 held in an IRA for his benefit as to which Mr. Ferguson has
investment power but no voting power.
(3) Includes 200 shares jointly held with his wife, as to which Mr. Hann has
shared voting and investment power; 13,750 shares owned of record by his
wife as to which Mr. Hann has no voting or investment power and disclaims
beneficial ownership; 3,802 shares held for Mr. Hann's account in the
ESBP, as to which Mr. Hann holds voting power but no investment power;
4,846 shares held in Mr. Hann's account in the Company's 401(k), as to
which Mr. Hann has no voting or investment power; and 35,750 shares
subject to options exercisable within 60 days.
(4) Includes 239,824 shares subject to options exercisable by Dr. Harrison
within 60 days.
(5) Includes 5,000 shares subject to options exercisable by Mr. Harroff
within 60 days.
(6) Includes 4,641,414 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; 13,262 shares held
for Dr. Miller's account in the ESBP, as to which Dr. Miller holds voting
power but no investment power; 8,944 shares held in Dr. Miller's account
in the Company's 401(k), as to which he has no voting or investment power;
and 45,988 held in an IRA for the benefit of Dr. Miller, as to which he
has investment power but no voting power.
(7) Includes 110,000 shares held in trust for the benefit of Mr. Miller's
minor children, as to which Mr. Miller has shared voting and investment
power and disclaims beneficial ownership; 2,019,871 shares held in an
Estate Planning trust for the benefit of Mr. Miller, as to which Mr.
Miller has shared voting and investment power; and 5,000 shares subject to
options exercisable by Mr. Miller within 60 days.
(8) Includes 900 shares held in an IRA for Mr. Miller's benefit, as to which
he has investment power but no voting power; and 5,000 shares subject to
options exercisable by Mr. Miller within 60 days.
(9) Includes 114,584 shares owned of record by Mr. Niemier's wife and 13,588
shares held in an IRA for her
3
<PAGE> 7
benefit, as to which Mr. Niemier has no voting or investment power and
disclaims beneficial ownership; 11,342 shares held for Mr. Niemier's
account in the ESBP, as to which Mr. Niemier holds voting power but
no investment power; 15,764 shares held in Mr. Niemier's account in the
Company's 401(k), as to which he has no voting or investment power; 31,592
shares held in an IRA for Mr. Niemier's benefit, as to which he has
investment power but no voting power; 133,488 shares held in trust for
the benefit of Mr. Niemier's children as to which he has no voting or
investment power and disclaims beneficial ownership; and 8,250 shares
subject to options exercisable within 60 days.
(10) Includes 21,600 shares held jointly with his wife, as to which he has
shared voting and investment power; 1,421,694 shares owned of record by
his wife and 14,400 shares held in an IRA for her benefit, as to which
Mr. Noblitt holds no voting or investment power and disclaims beneficial
ownership; 13,785 shares held for Mr. Noblitt's account in the ESBP, as to
which he holds voting power but no investment power; 15,348 shares held in
Mr. Noblitt's account in the Company's 401(k), as to which he has no
voting or investment power; 20,412 shares owned of record by his children,
as to which Mr. Noblitt has no voting or investment power and disclaims
beneficial ownership; and 24,660 shares held in an IRA for the benefit of
Mr. Noblitt as to which he has investment power but no voting power.
(11) Includes 5,000 shares subject to options exercisable by Ms. Quayle within
60 days.
(12) Includes 14,177 shares held in the ESBP for the accounts of three
executive officers of the Company who are not directors and are not named
in the Summary Compensation Table herein, as to which they have voting
power but no investment power; 14,036 shares held in the Company's 401(k)
for the accounts of these executive officers, as to which they have no
voting or investment power; 45,543 shares held by the wives of these
executive officers, as to which they have no voting power or investment
power and disclaim beneficial ownership; 51,332 shares held jointly by
these executive officers and their wives, as to which they have shared
voting and investment power; and 60,874 shares subject to options
exercisable by these executive officers within 60 days.
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 2000, 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 1998 and 1999, 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 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.
4
<PAGE> 8
DIRECTORS STANDING FOR ELECTION
NAME, AGE AND BUSINESS EXPERIENCE
CLASS II: FOR A THREE-YEAR TERM EXPIRING AT THE 2000 ANNUAL MEETING OF
SHAREHOLDERS
DANE A. MILLER, PH.D., age 51.............................. Director since 1977
Member: Executive, Compensation and Stock Option Committees. Dr. Miller is
one of the four founders of the company and is the President and Chief
Executive Officer of the Company. Dr. Miller is a director of 1st Source
Corporation (bank holding company), a trustee of GMI Institute and serves on
the Engineering Advisory Committee of the University of Cincinnati.
JERRY L. FERGUSON, age 56.................................. Director since 1978
Member: Executive and Nominating Committees. Mr. Ferguson is one of the four
founders of the Company and has served as the Company's Senior Vice President
since December 1994. He previously served as Special Projects Advisor to the
Company from December 1993 to December 1994. Prior thereto, Mr. Ferguson was
the owner of Classic Car Centre, Inc. (automobile dealership).
THOMAS F. KEARNS, JR., age 60.............................. Director since 1983
Mr. Kearns is a retired partner of Bear, Stearns & Co., Inc. (investment
banking firm). Mr. Kearns is a director of PharmaKinetics Laboratories, Inc.
(contract research organization), and a trustee of the University of North
Carolina Foundation.
DANIEL P. HANN, age 42.................................... Director since 1989
Mr. Hann is the Vice President, General Counsel and Secretary of the Company.
DIRECTORS CONTINUING IN OFFICE
NAME, AGE AND BUSINESS EXPERIENCE
CLASS III: TERM EXPIRES AT THE 1998 ANNUAL MEETING OF SHAREHOLDERS
M. RAY HARROFF, age 57..................................... Director since 1977
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 51.....................................Director since 1979
Member: Executive, Nominating, Audit, Compensation and Stock Option
Committees. Mr. Miller is a principal in Havirco, Inc. (private investment
management). Mr. Miller is a director and a member of the Compensation
Committee of the board of directors of AvTech Laboratories, Inc.
(pharmaceutical laboratory) and TEAM Industries, Inc. (manufacturer of expanded
polystyrene products).
CHARLES E. NIEMIER, age 41................................. Director since 1987
Mr. Niemier is the Senior Vice President - International Operations of the
Company. Mr. Niemier is a director of Acordia of Northeast Indiana, Inc. (third
party insurance administrator) and is a trustee of Valparaiso University.
5
<PAGE> 9
CLASS I: TERM EXPIRES AT THE 1999 ANNUAL MEETING OF SHAREHOLDERS
C. SCOTT HARRISON, M.D., age 60............................ Director since 1994
Member: Executive Committee. Dr. Harrison served as a consultant to the
Company from January 1995 to December 1996. Prior thereto, Dr. Harrison was
the President, Chief Executive Officer and Chairman of the Board of Kirschner
Medical Corporation.
NILES L. NOBLITT, age 46....................................Director since 1977
Member: Executive, Audit and Stock Option Committees. Mr. Noblitt is one of
the four founders of the Company and is the Chairman of the Board of the
Company. Mr. Noblitt is also a trustee of Rose Hulman Institute of Technology.
KENNETH V. MILLER, age 49.................................. Director since 1979
Member: Executive, Nominating, Audit, Compensation and Stock Option
Committees. Mr. Miller is a principal in Havirco, Inc. (private investment
management). Mr. Miller is a director and a member of the Compensation
Committee of the Board of Directors of AvTech Laboratories, Inc.
(pharmaceutical laboratory) and TEAM Industries, Inc. (manufacturer of expanded
polystyrene products). Mr. Miller is also a director of Keystone Community
Bank.
L. GENE TANNER, age 64..................................... Director since 1985
Mr. Tanner is Vice Chairman of the Board of NatCity Investments, Inc.
(investment banking firm). Mr. Tanner is a director of the Indiana Chamber of
Commerce.
MARILYN TUCKER QUAYLE, age 48.............................. Director since 1993
Ms. Quayle is an attorney 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).
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, C. Scott Harrison,
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 comprised of Jerry L. Miller, Kenneth V.
Miller and Niles L. Noblitt; a Compensation Committee comprised of Dane A.
Miller, Jerry L. Miller and Kenneth V. Miller; and a Stock Option Committee
comprised of Dane A. Miller, Jerry L. Miller, Kenneth V. Miller and Niles L.
Noblitt.
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 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
6
<PAGE> 10
or mailed and received at such address not less than sixty days nor more than
ninety days prior to the Annual Meeting of Shareholders. 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 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
review the scope and parameters of the findings of the Company's internal
auditor; to establish policies and make recommendations to the Board of
Directors with respect to approval of transactions 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, each receives an option to
purchase 5,000 Common Shares of the Company every three years during his
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 Board of Directors, the Executive Committee, the Nominating Committee,
the Audit Committee, the Compensation Committee and the Stock Option Committee
of the Company met 6 times, 7 times, 2 times, 3 times, 2 times and 2 times,
respectively, during the past fiscal year. Thomas F. Kearns, Jr. attended fewer
than 75% of the total number of meetings of the Board of Directors during
fiscal year 1997.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an employee receives an annual fee
of $8,000, plus $650 and reimbursement for travel expenses for each meeting of
the Board of Directors attended in person and a fee of $325 for attending a
meeting by telephone. Directors who are employees of the Company receive a fee
of $650 for each board meeting attended in person and a fee of $325 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 $8,000, plus $650 and reimbursement for travel
expenses for each committee meeting attended in person and a fee of $325 for
attending a committee meeting by telephone. Each member of the Nominating,
Audit and Compensation Committees of the Board of Directors receives $650 for
each committee meeting attended in person and $325 for attending a committee
meeting by telephone, unless such meetings are held in conjunction with a
meeting of the Board of Directors or Executive Committee. No fees are paid for
attending meetings of the Stock Option Committee.
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").
7
<PAGE> 11
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 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 1997, the Compensation Committee was comprised of Dane
A. Miller, Ph.D., Jerry L. Miller and Kenneth V. Miller. Dr. Miller serves as
the Company's President and Chief Executive Officer. His compensation is
established by the Compensation Committee, without his participation, and
approved by the Board of Directors. Except for Dane A. Miller, none of the
other members of the Compensation Committee are now serving or previously have
served as officers of the Company or any subsidiary. None of the Company's
executive officers serve as directors of, or in any compensation-related
capacity for, other companies with which members of the Company's Compensation
Committee are affiliated.
EXECUTIVE COMPENSATION
GENERAL
The following Summary Compensation Table sets forth, for the three years
ending May 31, 1997, certain information with respect to the compensation of
the Company's President and Chief Executive Officer and the four other most
highly compensated executive officers who served in such capacities as of May
31, 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION ALL OTHER
FISCAL YEAR COMPENSATION AWARDS COMPENSATION(1)
NAME AND PRINCIPAL POSITION ENDED MAY 31 SALARY ($) BONUS ($) STOCK OPTIONS (#) ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dane A. Miller, Ph.D. 1997 199,700 126,270 - 12,575
President and 1996 182,000 129,281 - 11,575
Chief Executive Officer 1995 167,707 110,000 - 14,395
Niles L. Noblitt 1997 199,700 126,270 - 13,200
Chairman of the Board 1996 182,000 129,281 - 11,575
1995 167,707 110,000 - 14,395
Jerry L. Ferguson 1997 179,700 130,460 - 7,900
Senior Vice President 1996 163,706 129,408 - 6,900
1995 72,552 86,700 - 53,900(2)
Charles E. Niemier 1997 198,000 109,350 10,000 12,575
Senior Vice President - 1996 180,399 91,099 - 11,575
International Operations 1995 166,199 88,000 - 14,395
Garry L. England 1997 185,400 111,476 10,000 9,475
Senior Vice President - 1996 168,939 115,500 - 9,175
Warsaw Operations 1995 153,045 88,700 - 11,695
</TABLE>
(1) Represents the value of the Company's contribution to the Employee Stock
Bonus Plan and the 401(k). Also includes director fees paid to Dr. Miller,
Mr. Noblitt, Mr. Ferguson and Mr. Niemier.
(2) Represents fees paid to Mr. Ferguson for independent consulting services
provided to the Company in 1995.
8
<PAGE> 12
STOCK OPTIONS
Options were granted in fiscal year 1997 to the following executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES PRESENT OF TOTAL AT ASSUMED ANNUAL
UNDERLYING OPTIONS GRANTED EXERCISE RATES OF STOCK PRICE
OPTIONS GRANTED(1) TO EMPLOYEES IN PRICE EXPIRATION APPRECIATION FOR OPTION TERM
NAME (#) FISCAL YEAR 1997 ($/SH) DATE 5% ($) 10% ($)
- ---- -- ---------------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Garry L. England 2,000 0.2% 13.00 June 10, 1999 4,098 8,606
2,000 0.2% 13.00 June 10, 2000 5,603 12,067
2,000 0.2% 13.00 June 10, 2001 7,183 15,873
2,000 0.2% 13.00 June 10, 2002 8,842 20,061
2,000 0.2% 13.00 June 10, 2003 10,585 24,667
Charles E. Niemier 2,000 0.2% 13.00 June 10, 1999 4,098 8,606
2,000 0.2% 13.00 June 10, 2000 5,603 12,067
2,000 0.2% 13.00 June 10, 2001 7,183 15,873
2,000 0.2% 13.00 June 10, 2002 8,842 20,061
2,000 0.2% 13.00 June 10, 2003 10,585 24,667
</TABLE>
(1) These options are granted under the 1992 Employee and Non-Employee Director
Stock Options Plan. They were granted at fair market value at the time of the
grant, do not become exercisable until one year from the date of grant and
carry with them the right to elect to have shares withheld upon exercise and/or
to deliver previously owned shares to satisfy tax withholding requirements.
The following table sets forth the number of shares acquired on exercise
of stock options and the aggregate gain realized on exercise in fiscal year
1997 by the executive officers of the Company named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE REALIZED(1) AT MAY 31, 1997 (#) OPTIONS AT MAY 31, 1997 ($)2
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Garry L. England 12,725 102,806 20,850 25,625 233,807 196,536
Jerry L. Ferguson 5,000 25,000 0 0 0 0
Charles E. Niemier - - 3,125 25,625 27,931 196,536
</TABLE>
(1) "Value Realized" represents the difference between the base (or exercise)
price of the option shares and the market price of the option shares on the
date the option was exercised. It does not include any taxes which may have
been owed.
(2) The value of these options assumes a market price of $18 11/16, which was
the closing price of the Common Shares reported by the Nasdaq Stock Market on
May 30, 1997.
9
<PAGE> 13
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
POLICIES AND OBJECTIVES
The Compensation Committee and the Stock Option Committee of the Board of
Directors (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.
The Company's current executive compensation policies and practices
reflect the compensation philosophies of the Company's four founders - Dane A.
Miller, Ph.D., 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 1997, the base salary of the executive officers
as a group increased approximately 5%.
10
<PAGE> 14
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. The Committee may exercise some discretion in making bonus
awards.
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 to create an entrepreneurial environment within the Company and instill
the spirit of a small company. Additionally, the Committee believes stock
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 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 market value of the Common Shares 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, more
than 55% of employees below the executive officer level have been awarded one
or more stock options under this program and approximately 95% of the option
shares have been granted to employees other than executive officers.
BENEFIT PLANS. The executive officers also participate in the Company's
401(k) and the ESBP. All executive officers and employees who are at least 18
years of age and have at least 90 days of service are eligible to participate
in both plans. With respect to the 401(k), each year the Company, in its sole
discretion, may match 50% of each employee's contributions, up to a maximum
amount equal to 5% of the employee's compensation, either in cash or in Common
Shares of the Company. All contributions to the 401(k) 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. The Company may make
contributions to the ESBP 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 the ESBP 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 Common Shares,
both plans serve to further align the interests of employees, management and
shareholders.
11
<PAGE> 15
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
The compensation for the Company's President and Chief Executive Officer,
Dane A. Miller, Ph.D., 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 value of the Company's shares. 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 net
income in excess of 8% and 13%, respectively, for fiscal year 1997, the total
compensation paid to Dr. Miller increased less than 5%.
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
Niles L. Noblitt
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 most recent fiscal years ended May 31. The comparison
assumes $100 invested on May 31, 1992, in the Company's Common Shares and in
each of the indices.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG BIOMET, INC., THE S&P 500 INDEX
AND THE S&P HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) INDEX
[GRAPHIC APPEARS HERE]
<TABLE>
<CAPTION>
S&P
Medical
Date Biomet, Inc. S&P 500 Index
---- ------------- ------- -------
<S> <C> <C> <C>
5/92 100 100 100
5/93 59 112 81
5/94 55 116 76
5/95 84 140 112
5/96 79 180 153
5/97 106 232 190
</TABLE>
CERTAIN TRANSACTIONS
Marilyn Tucker Quayle, a member of the Board of Directors of the Company,
is a partner in the law firm of Krieg, DeVault, Alexander and Capehart which
provided services to the Company during the past fiscal year and is expected to
do so in the future. Fees paid to Krieg, DeVault, Alexander and Capehart during
fiscal year 1997 were less than five hundred dollars ($500).
Dane A. Miller, Ph.D., 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
13
<PAGE> 17
on an as-needed basis. The Company pays a flat monthly fee of $20,800 to that
corporation for the use of the aircraft. The Company made payments to that
corporation of approximately $249,600 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
During fiscal year 1996, Dane A. Miller, Ph.D, President and CEO, did not
file on a timely basis under Section 16(a) of the Securities Exchange Act of
1934 one required report relating to one transaction. The transaction involved
a gift of stock held jointly by Dr. Miller and his wife in the amount of 13,000
shares, which represent less than 0.3% of Dr. Miller's aggregate beneficial
holdings of Biomet Common Shares.
Except for the transactions referenced above, 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, 1997.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS (ITEM 2)
Subject to ratification by the shareholders, the Board of Directors has
selected Coopers & Lybrand L.L.P. as independent accountants for the Company
for the fiscal year ending May 31, 1998. 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 L.L.P. 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, 1997.
14
<PAGE> 18
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 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
August 15, 1997
15
<PAGE> 19
PROXY
BIOMET, INC.
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 19, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dane A. Miller and Niles L. Noblitt as
proxies, each with the power to act alone and of substitution, and hereby
authorizes them to represent and to vote, as designated below, all the Common
Shares of the Company which the undersigned is entitled to vote at the Annual
Meeting of Shareholders to be held on Friday, September 19, 1997, or any
adjournment thereof.
1. ELECTION OF DIRECTORS. Nominees:
Dane A. Miller, Ph.D.; Jerry L. Ferguson; Thomas F. Kearns, Jr.;
Daniel P. Hann
[ ] VOTE FOR all nominees listed above except vote withheld from the
following nominees (if any):
-----------------------------------------------------------
[ ] VOTE WITHHELD from all nominees listed above.
2. RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MAY 31,
1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" MATTERS 1 & 2 ABOVE.
PLEASE SIGN ON THE REVERSE SIDE.
<PAGE> 20
Please sign exactly as your name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated ____________________, 1997
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD
PROMPTLY USING THE
ENCLOSED ENVELOPE. Signature ________________________________________
Signature, if held jointly________________________
Please indicate below whether you will or
will not attend the Annual Meeting.
[ ] WILL ATTEND [ ] WILL NOT ATTEND
