<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 Rule 14a-11(c) or Rule 14a-12
BIOMET, INC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
BIOMET, INC
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[BIOMET INC LOGO]
To the Shareholders of Biomet, Inc.:
You are cordially invited to attend our Annual Meeting of Shareholders on
Saturday, September 18, 1999, at 10:00 a.m., local time, at the 2517 Meeting
Facility, 2517 E. Center Street, Warsaw, Indiana.
At the meeting, you will vote on the election of five persons to the Board
of Directors and the ratification of the selection of PricewaterhouseCoopers LLP
as independent accountants for the current year. Details can be found in the
accompanying Notice and Proxy Statement.
We hope you are planning to attend the Annual Meeting and look forward to
seeing as many of you as possible. Please check the appropriate "attendance" box
on your proxy card. The vote of each shareholder is of utmost importance. For
that reason, 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 plan
to attend the Annual Meeting. You may revoke your proxy at any time before it is
voted by providing written notice to the Secretary of Biomet 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,
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 18, 1999
TO THE SHAREHOLDERS OF BIOMET, INC.:
The Annual Meeting of Shareholders of Biomet, Inc. will be held on
Saturday, September 18, 1999, at 10:00 a.m., local time, at the 2517 Meeting
Facility, 2517 E. Center Street, Warsaw, Indiana, for the following purposes:
(1) To elect five directors to serve for terms of three years each.
(2) To ratify the selection by the Board of Directors of PricewaterhouseCoopers
LLP as independent accountants for the fiscal year ending May 31, 2000.
(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 9, 1999 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 Biomet 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 28, 1999
Warsaw, Indiana
YOUR VOTE IS VERY IMPORTANT. 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 18, 1999
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Biomet, Inc. in
connection with the solicitation by the Board of Directors of Biomet of proxies
to be voted at the Annual Meeting of Shareholders to be held at the 2517 Meeting
Facility, 2517 E. Center Street, Warsaw, Indiana, on Saturday, September 18,
1999, at 10:00 a.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 28, 1999. The following is important information in a
question-and-answer format regarding the Annual Meeting and this Proxy
Statement.
WHAT AM I VOTING ON?
You are voting on the following matters:
- The election of five directors (C. Scott Harrison, M.D.; Niles L.
Noblitt; Kenneth V. Miller; L. Gene Tanner; and Marilyn Tucker Quayle)
for three-year terms.
- The ratification of PricewaterhouseCoopers LLP as Biomet's independent
accountants.
WHO IS ENTITLED TO VOTE?
Only those persons who own Biomet Common Shares at the close of business on the
record date, July 9, 1999, are entitled to receive notice of the Annual Meeting,
or any adjournment of the meeting. Each shareholder is entitled to one vote for
each Biomet Common Share owned as of July 9, 1999.
HOW DO I VOTE?
Please complete, sign and return each proxy you receive. If your signed proxy
does not indicate your voting preferences, we will vote FOR the two proposals on
your behalf. You may revoke your proxy at any time prior to the Annual Meeting
by (1) notifying the Secretary of Biomet in writing, or (2) returning a
later-dated proxy.
WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
It means you have shares registered in more than one account. Please complete,
sign and return all proxies to ensure that all of your shares are voted.
WHO CAN ATTEND THE ANNUAL MEETING?
All shareholders as of July 9, 1999, or their duly appointed proxy holders, may
attend the Annual Meeting. Each shareholder may be accompanied by one guest.
However, seating will be limited. Admission to the Annual Meeting will be on a
first-come, first-served basis. Registration will begin at 9:30 a.m.
<PAGE> 5
WHAT TIME IS THE ANNUAL MEETING?
The Annual Meeting will begin at 10:00 a.m., local time. Please note that local
time is Eastern Standard Time, NOT Eastern Daylight Savings Time.
WHAT CONSTITUTES A QUORUM?
A quorum is represented by the holders of a majority of the Common Shares
outstanding on the record date and present, in person or by proxy, at the Annual
Meeting. As of the record date, there were 112,744,907 Common Shares of Biomet
issued and outstanding. Proxies submitted by brokers that do not indicate a vote
for one or more of the proposals are called "broker non-votes." Broker non-votes
and abstentions will be included in the number of shares considered to be
present at the Annual Meeting.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. You may change your vote at any time before the proxy is voted at the
Annual Meeting. To change your vote, you must file with the Secretary of Biomet
either a notice of revocation or a duly executed proxy bearing a later date. Any
proxy will be suspended if you attend the Annual Meeting and elect to vote in
person.
HOW MANY VOTES ARE NEEDED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The election of directors requires the affirmative vote
of a majority of the votes cast at the Annual Meeting. This means that the five
nominees receiving the greatest number of votes will be elected as directors.
Abstentions and broker non-votes will not be counted as votes in favor of any
nominee.
OTHER MATTERS. The ratification of the independent accountants, and any other
matter that properly comes before the Annual Meeting, requires that the number
of votes cast "for" exceed those cast "against."
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you instruct otherwise on your proxy card, the proxy holders will vote in
accordance with the recommendations of the Board of Directors. The Board's
recommendations are set forth with the discussion of each matter. In summary,
the Board recommends the following voting actions:
- For the election of the nominees for directors.
- For ratification of the appointment of PricewaterhouseCoopers LLP as
Biomet's independent accountants.
With respect to any other matter that properly comes before the Annual Meeting,
the proxy holders will vote as recommended by the Board of Directors or in their
own discretion if no recommendation is given.
WHEN ARE SHAREHOLDER PROPOSALS DUE FOR THE 2000 ANNUAL MEETING?
To be considered for inclusion in next year's Proxy Statement, shareholder
proposals must be submitted in writing by March 27, 2000, to the Secretary of
Biomet, P.O. Box 587, Warsaw, IN 46581-0587.
WHO PAYS FOR THE COSTS ASSOCIATED WITH THIS PROXY STATEMENT?
Biomet will pay for all expenses in connection with the solicitation of proxies.
We 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, will
reimburse
2
<PAGE> 6
such record holders for their reasonable expenses in connection with such
activities. Biomet expects to solicit proxies primarily by mail; but directors,
officers and employees of Biomet may also solicit proxies in person or by
telephone.
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF BIOMET'S COMMON SHARES?
The following table sets forth certain data with respect to those persons
known by Biomet to be the beneficial owners of more than 5% of the issued and
outstanding Common Shares of Biomet as of July 9, 1999. Except as otherwise
indicated in the notes to the table, each shareholder has sole voting and
investment power with respect to the shares indicated.
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
---------------- ----------------------- --------
State Farm Mutual Automobile 8,292,498(1) 7.4%
Insurance Company and
related entities
One State Farm Plaza
Bloomington, Illinois 61710
FMR Corp. 7,456,726(2) 6.6%
82 Devonshire Street
Boston, Massachusetts 02109-3614
AMVESCAP P.L.C. 7,424,386(3) 6.6%
11 Devonshire Square
London EC2M 4YR
England
(1)According to information contained in a Schedule 13G filing made by
State Farm Mutual Automobile Insurance Company and related entities ("State
Farm") dated February 9, 1999, State Farm 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 FMR
Corp. ("FMR") dated February 1, 1999, FMR has no voting power with respect to
6,666,510 shares, and acquired these shares for investment purposes in the
ordinary course of its business.
(3)According to information contained in a Schedule 13G filing made by
AMVESCAP P.L.C. and related entities ("AMVESCAP") dated February 8, 1999,
AMVESCAP has shared voting and dispositive power with respect to these shares
and acquired them for investment purposes in the ordinary course of its
business.
HOW MANY COMMON SHARES DO BIOMET'S DIRECTORS AND EXECUTIVE OFFICERS OWN?
The following table sets forth the beneficial ownership of Common Shares as
of July 9, 1999 by each director, each executive officer named in the Summary
Compensation Table herein, and by all directors and executive officers of Biomet
as a group. Unless otherwise stated, the beneficial owners exercise sole voting
and/or investment power over their shares.
3
<PAGE> 7
<TABLE>
<CAPTION>
OPTION
NUMBER SHARES TOTAL NUMBER
OF SHARES BIOMET'S 401(K) PROFIT EXERCISABLE OF SHARES
NAME OF BENEFICIALLY EMPLOYEE STOCK SHARING AND WITHIN BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED (1) BONUS PLAN (2) TRUST (3) 60 DAYS (4) OWNED OF CLASS
- ---------------- -------- -------------- --------- ----------- ----- --------
<S> <C> <C> <C> <C> <C> <C>
Garry L. England 81,961 9,756 13,741 32,850 138,308 0.1%
Jerry L. Ferguson 1,551,204 1,220 - - 1,552,424 1.4%
Daniel P. Hann 45,819 4,207 5,387 33,250 88,663 *
C. Scott Harrison, M.D. 326,708 - - 8,572 335,280 0.3%
M. Ray Harroff 28,328 - - - 28,328 *
Thomas F. Kearns, Jr. 4,459 - - - 4,459 *
Dane A. Miller, Ph.D. 4,100,265 13,670 9,338 - 4,123,273 3.7%
Jerry L. Miller 1,919,034 - - - 1,919,034 1.7%
Kenneth V. Miller 6,334 - - - 6,334 *
Charles E. Niemier 341,866 11,754 16,137 18,250 388,007 0.3%
Niles L. Noblitt 2,624,211 13,952 20,871 - 2,659,034 2.4%
James R. Pastena 44,645 4,871 4,250 10,510 64,276 *
Marilyn Tucker Quayle - - - - - -
Prof. Dr. Bernhard Scheuble - - - 5,000 5,000 *
L. Gene Tanner 65,000 - - - 65,000 *
Other Executive Officers 181,341 17,300 18,730 79,019 296,390 0.3%
- -------------------------------------------------------------------------------------------------------------------
All Directors and Executive 11,486,359(5) 10.2%
Officers as a Group
(19 persons, including
the foregoing)
</TABLE>
*Represents less than .1% of Biomet's issued and outstanding Common Shares.
(1) The number of shares shown include shares that are owned individually or
jointly, as well as shares to which the individual has shared voting and/or
investment power. Certain Biomet directors and executive officers disclaim
beneficial ownership of some of the shares included in the table, as
follows:
- Mr. Garry England--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; and 2,550 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.
- Mr. Jerry Ferguson--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;
and 26,136 held in an IRA for his benefit as to which Mr. Ferguson has
investment power but no voting power.
- Mr. Daniel Hann--19,574 shares owned of record by his wife, as to
which Mr. Hann has no voting or investment power and disclaims
beneficial ownership.
- Dr. Dane Miller--1,339,602 shares owned of record by his wife and
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; and 45,988 held in an IRA for the benefit of Dr. Miller, as
to which he has investment power but no voting power.
4
<PAGE> 8
- Mr. Jerry Miller--55,000 shares held in trust for the benefit of
Mr. Miller's minor child, as to which Mr. Miller has shared voting and
investment power and disclaims beneficial ownership; and 1,819,871
shares held in an Estate Planning trust for the benefit of Mr. Miller,
as to which Mr. Miller has shared voting and investment power.
- Mr. Charles Niemier--77,474 shares owned of record by Mr. Niemier's
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; and 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.
- Mr. Niles Noblitt--1,360,494 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; 12,906 shares owned of record by his children, as to which
Mr. Noblitt has no voting or investment power and disclaims beneficial
ownership; 12,906 shares owned of record by his children, as to which
he has voting and investment power but 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.
- Other Executive Officers--47,366 shares held by the wives of these
executive officers, as to which they have no voting power or
investment power and disclaim beneficial ownership; and 2,068 shares
held in an IRA for the benefit of one of the executive officers, as to
which he has investment power but no voting power.
(2) Biomet's executive officers have accounts in Biomet's Employee Stock Bonus
Plan qualified under section 401(a) of the Internal Revenue Code. The
executive officers who hold shares pursuant to the Employee Stock Bonus
Plan have voting power but do not have investment power for these shares.
(3) Biomet's executive officers may elect to participate in Biomet's Profit
Sharing Plan and Trust qualified under Section 401(k) of the Internal
Revenue Code. The officers have no voting or investment power for the
shares held in their accounts in the 401(k) plan.
(4) Reflects the number of shares that could be purchased by the exercise of
options available at July 9, 1999, or within 60 days thereafter.
(5) Does not include unexercised option shares
5
<PAGE> 9
ITEM 1--ELECTION OF DIRECTORS
Biomet'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 five directors in Class I to serve
for a three-year term expiring in 2002, and until their successors are elected
and qualified. Class II Directors and Class III Directors will not be elected at
the Annual Meeting and will continue in office until the Annual Meetings of
Shareholders to be held in 2000 and 2001, respectively. The Board of Directors
has nominated the persons named below for election as Class I Directors. The
name, age, business background and tenure as a director of Biomet 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 Biomet has no reason to believe that any of
the nominees will be unable to serve. Should any nominee become unavailable for
any reason, proxies may be voted for an alternate candidate chosen by the Board
of Directors. The five nominees for director receiving the greatest number of
votes will be elected as 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
THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES.
CLASS I: FOR A THREE-YEAR TERM EXPIRING AT THE 2002 ANNUAL MEETING OF
SHAREHOLDERS
C. SCOTT HARRISON, M.D., age 62 . . . . . . . . . . . . . . Director since 1994
Member: Executive and Audit Committees. In June 1996, Dr. Harrison founded and
became President of Crippled Children's United Rehabilitation Effort (CCURE)
(non-profit organization). Dr. Harrison served as a consultant to Biomet 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 48. . . . . . . . . . . . . . . . . . Director since 1977
Member: Executive and Stock Option Committees. Mr. Noblitt is one of the four
founders of Biomet and is the Chairman of the Board. Mr. Noblitt is also a
trustee of Rose Hulman Institute of Technology.
KENNETH V. MILLER, age 51 . . . . . . . . . . . . . . . . . Director since 1979
Member: Executive, Nominating, Audit, Compensation and Stock Option Committees.
Mr. Miller is a self-employed attorney, venture capitalist and a principal in
Havirco, Inc. (private investment management firm). 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 66 . . . . . . . . . . . . . . . . . . Director since 1985
Member: Audit Committee. Mr. Tanner is Vice Chairman of the Board of NatCity
Investments, Inc. (investment banking firm) and a director of the Indiana
Chamber of Commerce.
6
<PAGE> 10
MARILYN TUCKER QUAYLE, age 50 . . . . . . . . . . . . . . . Director since 1993
Ms. Quayle is an attorney engaged in private practice as a partner in the
Indianapolis, Indiana law firm of Krieg, DeVault, Alexander & Capehart. She is
also Vice President and Treasurer of BTC, Inc. (public speaking company).
DIRECTORS CONTINUING IN OFFICE
NAME, AGE AND BUSINESS EXPERIENCE
CLASS II: TERM EXPIRES AT THE 2000 ANNUAL MEETING OF SHAREHOLDERS
DANE A. MILLER, Ph.D., age 53 . . . . . . . . . . . . . . . Director since 1977
Member: Executive, Compensation and Stock Option Committees. Dr. Miller is one
of the four founders of Biomet and is the President and Chief Executive Officer.
Dr. Miller is a director of 1st Source Corporation (bank holding company), a
trustee of Kettering University (formerly General Motors Institute) and serves
on the Engineering Advisory Committee of the University of Cincinnati.
JERRY L. FERGUSON, age 58 . . . . . . . . . . . . . . . . . Director since 1978
Member: Executive and Nominating Committees. Mr. Ferguson is one of the four
founders of Biomet and has served as Vice Chairman of the Board since December
1997. He previously served as Biomet's Senior Vice President from December 1994
to December 1997 and as Special Projects Advisor to Biomet from December 1993 to
December 1994.
THOMAS F. KEARNS, JR., age 62 . . . . . . . . . . . . . . . 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), a trustee of the University of North Carolina Foundation
and a director of Fibrogen Corporation (a biotechnology company).
DANIEL P. HANN, age 44 . . . . . . . . . . . . . . . . . . .Director since 1989
Mr. Hann has served as the Senior Vice President, General Counsel and Secretary
of Biomet since June 1999. Prior thereto, he was Vice President, General Counsel
and Secretary of Biomet.
CLASS III: TERM EXPIRES AT THE 2001 ANNUAL MEETING OF SHAREHOLDERS
M. RAY HARROFF, age 59 . . . . . . . . . . . . . . . . . . .Director since 1977
Mr. Harroff is one of the four founders of Biomet and is President of Stonehenge
Links Village Development (real estate development company). Mr. Harroff was
also President of Stonehenge Golf Club, Inc. (golf country club) until February
1998. On September 2, 1997, Mr. Harroff filed for protection under Federal
Bankruptcy laws. Also on September 2, 1997, Stonehenge Golf Club and Stonehenge
Links Village Development filed a petition for reorganization pursuant to
Chapter 11 of the United States Bankruptcy Code.
JERRY L. MILLER, age 53 . . . . . . . . . . . . . . . . . . Director since 1979
Member: Executive, Nominating, Compensation and Stock Option Committees. Mr.
Miller is a self-employed attorney, venture capitalist and a principal in
Havirco, Inc. (private investment management firm). 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).
7
<PAGE> 11
CHARLES E. NIEMIER, age 43 . . . . . . . . . . . . . . . . Director since 1987
Mr. Niemier is the Senior Vice President - International Operations of Biomet.
Mr. Niemier is a trustee of Valparaiso University and a member of the Board of
Directors of Lake City Bank.
PROF. DR. BERNHARD SCHEUBLE, age 45 . . . . . . . . . . . . Director since 1998
Prof. Scheuble is CEO Pharma, and has been a General Partner and Member of the
Executive Board of Merck KGaA (pharmaceutical company) since April 1, 1998. From
1996 until 1998, Prof. Scheuble was Head of Pharma Ethicals, Merck KGaA and from
1995 to 1996 he was Head of Pharma International, Merck KGaA. Prior thereto,
Prof. Scheuble was General Manager Liquid Crystals Unit, E. Merck, Germany.
Prof. Scheuble is a director and member of the Compensation Committee of
Pharmaceutical Resources, Inc. (pharmaceutical company) and certain subsidiaries
of Merck KGaA.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
HOW OFTEN DID THE BOARD MEET DURING FISCAL YEAR 1999?
The Board of Directors met four times during fiscal year 1999. Each director
attended more than 75% of the total number of meetings of the Board and
committees on which he or she served during fiscal year 1999.
BOARD COMMITTEE MEMBERSHIP
<TABLE>
<CAPTION>
Executive Nominating Audit Compensation Stock Option
Name Committee Committee Committee Committee Committee
<S> <C> <C> <C> <C> <C>
Jerry L. Ferguson X X
Daniel P. Hann
C. Scott Harrison, M.D. X X
M. Ray Haroff
Thomas F. Kearns
Dane A. Miller, Ph.D. X X X
Jerry L. Miller X X X X
Kenneth V. Miller X X X X X
Charles E. Niemier
Niles L. Noblitt X X
Marilyn Tucker Quayle
Prof. Dr. Bernhard Scheuble
L. Gene Tanner X
</TABLE>
The EXECUTIVE COMMITTEE has full authority from the Board of Directors to
conduct business within the limits prescribed by Indiana law. The Executive
Committee met five times during fiscal year 1999.
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
8
<PAGE> 12
persons recommended by shareholders provided that such recommendations are in
writing and delivered to: Attn: 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 60 days nor more than 90 days prior to
the Annual Meeting of Shareholders. In the event that less than 70 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 Nominating Committee met twice during fiscal year 1999.
The function of the AUDIT COMMITTEE is to monitor the internal controls and
financial reporting of Biomet and its subsidiaries; to review these matters with
the President and Chief Executive Officer and Biomet's independent accountants;
to review the scope and parameters of the independent accountants' audit of
Biomet's consolidated financial statements; to review the scope and parameters
of the findings of Biomet's internal auditor; to establish policies and make
recommendations to the Board of Directors with respect to approval of
transactions between Biomet and its directors, officers and employees; and to
make recommendations to the Board of Directors concerning the annual appointment
of Biomet's independent accountants. The Audit Committee met three times during
fiscal year 1999.
The COMPENSATION COMMITTEE is responsible for administering the
compensation programs for Biomet's executive officers and employees. The
Compensation Committee met twice during fiscal year 1999.
The STOCK OPTION COMMITTEE administers Biomet's stock option plans.
Presently, no member of the Stock Option Committee participates in any of these
plans with the exception that each of the two non-employee director members,
Jerry L. Miller and Kenneth V. Miller, receives an option to purchase 2,000
Common Shares every year during his service as a non-employee director of Biomet
pursuant to the terms of the Biomet, Inc. 1998 Qualified and Non-Qualified Stock
Option Plan. The Stock Option Committee met twice during fiscal year 1999.
COMPENSATION OF DIRECTORS
Each director of Biomet who is not an employee receives an annual fee of
$12,500, plus a fee of $1,000 and reimbursement for travel expenses for each
meeting of the Board of Directors attended in person and a fee of $500 for
attending a meeting by telephone. Directors who are employees receive a fee of
$750 for each meeting of the Board of Directors attended in person and a fee of
$375 for attending a meeting by telephone. Each member of the Executive
Committee of the Board of Directors who is not a Biomet employee receives an
additional annual fee of $12,500, plus a fee of $1,000 and reimbursement for
travel expenses for each committee meeting attended in person and a fee of $500
for attending a committee meeting by telephone. Each member of the Nominating,
Audit and Compensation Committees of the Board of Directors receives a fee of
$1,000 for each committee meeting attended in person and a fee of $500 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 a Biomet employee is automatically granted an
option to purchase 2,000 Common Shares every year during his or her service on
the Board of Directors pursuant to the terms of the
9
<PAGE> 13
Biomet, Inc. 1998 Qualified and Non-Qualified Stock Option Plan (the "1998
Plan"). The 1998 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1999, the Compensation Committee was comprised of Dane
A. Miller, Ph.D., Jerry L. Miller and Kenneth V. Miller. Dr. Miller serves as
Biomet'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, Ph.D., none of the other members
of the Compensation Committee are now serving or previously have served as
officers of Biomet or any subsidiary. None of Biomet's executive officers serve
as directors of, or in any compensation-related capacity for, other companies
with which members of Biomet's Compensation Committee are affiliated.
10
<PAGE> 14
Executive
Compensation
General
The following Summary Compensation Table sets forth, for the three years
ended May 31, 1999, certain information with respect to the compensation of
Biomet's President and Chief Executive Officer and the four other most highly
compensated executive officers who served in such capacities as of May 31, 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL INCENTIVE 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. 1999 217,700 160,300 - 13,400
President and 1998 205,400 146,500 - 11,800
Chief Executive Officer 1997 199,700 126,300 - 12,600
Niles L. Noblitt 1999 217,700 160,300 - 13,400
Chairman of the Board 1998 205,400 146,500 - 11,800
1997 199,700 126,300 - 13,200
James R. Pastena 1999 235,100 131,750 20,000 9,600
Vice President of Biomet 1998 222,500 120,800 1,300 8,800
and President of EBI, L.P. 1997 212,900 130,800 10,000 9,500
Garry L. England 1999 202,300 147,000 - 9,600
Senior Vice President - 1998 190,800 132,300 20,000 8,800
Warsaw Operations 1997 185,400 111,500 10,000 9,500
Charles E. Niemier 1999 216,000 114,200 - 13,400
Senior Vice President - 1998 203,800 120,300 20,000 11,800
International Operations 1997 198,000 109,400 10,000 12,600
</TABLE>
(1) Represents the value of Biomet's contribution to the Employee Stock Bonus
Plan and the 401(k), and director fees paid to Dr. Miller, Mr. Noblitt and Mr.
Niemier
11
<PAGE> 15
STOCK OPTIONS
Options were granted in fiscal year 1999 to the following executive officer
named in the Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL
SECURITIES PERCENT OF TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED EXERCISE APPRECIATION FOR OPTION TERM
OPTIONS GRANTED(1) TO EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME (#) FISCAL YEAR 1999 ($/SH) DATE 5% ($) 10% ($)
- ---- ----------------- ---------------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
James R. Pastena 4,000 0.4% 30.8750 October 12, 2001 19,467 40,879
4,000 0.4% 30.8750 October 12, 2002 26,615 57,316
4,000 0.4% 30.8750 October 12, 2003 34,121 75,398
4,000 0.4% 30.8750 October 12, 2004 42,002 95,288
4,000 0.4% 30.8750 October 12, 2005 50,277 117,167
</TABLE>
(1) These options were granted under the Biomet, Inc. 1998 Qualified and
Non-Qualified Stock Option Plan. They were granted at fair market value at the
time of the grant, do not become exercisable until one year from the date of
grant and carry with them the right to deliver previously owned shares in
payment of the option price and to satisfy tax withholding requirements.
The following table sets forth the number of shares acquired on exercise of
stock options and the aggregate gain realized on exercise in fiscal year 1999 by
Biomet's executive officers named in the Summary Compensation Table. Dr. Miller
and Mr. Noblitt do not receive stock options from Biomet.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE REALIZED(1) AT MAY 31, 1999 (#) OPTIONS AT MAY 31, 1999 ($)(2)
NAME ON EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- --- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James R. Pastena 0 0 5,385 36,415 154,077 468,097
Garry L. England 5,125 171,594 23,725 31,375 726,648 805,633
Charles E. Niemier 8,250 200,992 9,125 31,375 238,461 805,633
</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) Represents the difference between the base (or exercise) price of the option
shares and a market price of $39.9375, which was the closing price of the Common
Shares reported by the Nasdaq Stock Market on May 28, 1999.
12
<PAGE> 16
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
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 Biomet'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 Biomet'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.
WHAT IS BIOMET'S PHILOSOPHY OF EXECUTIVE OFFICER COMPENSATION?
Biomet's current executive compensation policies and practices reflect the
compensation philosophies of Biomet's four founders - Dane A. Miller, Ph.D.,
Niles L. Noblitt, Jerry L. Ferguson and M. Ray Harroff. Biomet is committed to
maximizing shareholder value through performance. The Committee believes that
superior performance by Biomet's executive and management team is an essential
element to reaching that goal. Biomet's practices and policies are designed to
help achieve this objective by accomplishing the following goals:
- Attracting, retaining and rewarding highly qualified and productive
persons.
- Relating compensation to both company and individual performance.
- Establishing compensation levels that are internally equitable and
externally competitive.
- Encouraging an ownership interest and instilling a sense of pride in
Biomet, consistent with the interests of Biomet's shareholders.
The Committee firmly believes that all Team Members (Biomet refers to its
employees as Team Members) play a critical role in Biomet's success and,
therefore, all Team Members participate in Biomet's cash and equity compensation
plans. The Committee continues to believe in one of Biomet's founding
philosophies: that equity incentives in the form of stock options are an
excellent motivation for all Team Members, including executive officers, and
serve to align the interests of Team Members, management and shareholders.
Based on these objectives, the compensation package of the executive
officers consists of four primary elements:
- base salary
- incentive bonuses
- stock options
- 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 Biomet's performance, the executive officer's performance,
Biomet's future objectives and challenges, and the current competitive
environment. Base salaries are intended to be relatively moderate, but
competitive. During fiscal year 1999, the base salary of the executive officers
as a group increased approximately 6%.
13
<PAGE> 17
INCENTIVE BONUSES. A significant portion of each executive officer's annual
compensation is based on the financial performance of Biomet. Approximately
one-half of each executive officer's potential annual cash compensation is based
upon an incentive bonus which is accrued and paid at the mid-point and the
conclusion of each fiscal year. The bonus is determined at the discretion of the
Committee and approved by the Board of Directors at the beginning of each fiscal
year. In exercising its discretion, the Committee takes into account the growth
in revenues and earnings of the operations for which the executive officer is
responsible or plays a significant role, as well as the goals, objectives,
responsibilities and length of service of each officer.
STOCK OPTIONS. Stock options have always been a key element in Biomet's
long-term incentives program. The primary purpose of stock options is to provide
executive officers and other Team Members with a personal and financial interest
in Biomet's success through stock ownership, thereby aligning the interests of
such persons with those of Biomet's shareholders. This broad-based program is a
vital element of Biomet's goal to empower and motivate outstanding long-term
contributions by Team Members within all levels of Biomet. The Committee
believes that stock options help to create an entrepreneurial environment within
Biomet 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 Team Members in order to sustain and enhance Biomet's long-term
performance.
The Committee believes that the value of stock options will reflect
Biomet's financial performance over the long term. Because Biomet's employee
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 Team Members 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. All Team Members are eligible to receive
stock options. The current plan provides that all hourly Team Members of Biomet
and its subsidiaries receive a stock option after just two years of service with
Biomet or one of its subsidiaries.
BENEFIT PLANS. The executive officers may also participate in Biomet's
401(k) and the Employee Stock Bonus Plan ("ESBP"). All executive officers and
Team Members who are at least 18 years of age and have at least 90 days of
service are also eligible to participate in both plans. With respect to the
401(k), each year Biomet, in its sole discretion, may match 75% of each Team
Member's contributions, up to a maximum amount equal to 5% of the Team Member's
compensation, either in cash or in Common Shares. All contributions to the
401(k) are allocated to accounts maintained on behalf of each participating Team
Member and, to the extent vested, are distributed to the Team Member upon
retirement, death, disability or termination of service. Historically, the
401(k) has purchased Common Shares with Biomet's matching contribution. Biomet
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
Team Members 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 Biomet Common Shares. Distributions are made to Team
Members at retirement, death, disability or termination of service, in Common
Shares or, at the Team Member's option, in cash. Because a significant portion
of the assets of both of these plans is invested in Biomet's Common Shares, they
serve to further align the interests of Team Members, management and
shareholders.
14
<PAGE> 18
HOW IS BIOMET'S PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATED?
The compensation for Biomet'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 Biomet's
strong financial results. 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
Biomet's stock. Dr. Miller has never received a stock option and he does not
participate in Biomet's stock option program. Notwithstanding an increase in
Biomet's sales in excess of 16% for fiscal year 1999, the total compensation
paid to Dr. Miller increased less than 8%.
The Committee believes that the executive compensation programs and
practices described above are conservative and fair to Biomet's shareholders.
The Committee further believes that these programs and practices serve the best
interests of Biomet and its shareholders.
Respectfully submitted,
Kenneth V. Miller, Chairman
Dane A. Miller, Ph.D.
Jerry L. Miller
Niles L. Noblitt
15
<PAGE> 19
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
Biomet's Common Shares with the cumulative total return of the Standard & Poor's
500 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, 1994, in Biomet's Common Shares and in each of the indices.
<TABLE>
<CAPTION>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG BIOMET, INC., THE S&P 500 INDEX AND THE
S&P MEDICAL INDEX
ANNUAL RETURN PERCENTAGE
YEAR ENDING
COMPANY/INDEX MAY 95 MAY 96 MAY 97 MAY 98 MAY 99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BIOMET INC 52.56 -5.88 34.31 55.37 38.84
S&P 500 Index 20.19 28.44 29.41 30.69 21.03
S&P Medical Index 47.24 36.16 23.90 32.76 25.11
INDEXED RETURNS
YEAR ENDING
BASE
PERIOD
COMPANY/INDEX MAY 94 MAY 95 MAY 96 MAY 97 MAY 98 MAY 99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BIOMET INC 100 152.56 143.59 192.85 299.63 416.03
S&P 500 Index 100 120.19 154.37 199.77 261.08 315.97
S&P Medical Index 100 147.24 200.48 248.40 329.78 412.58
</TABLE>
*$100 INVESTMENT ON 5/31/94 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED MAY 31.
16
<PAGE> 20
CERTAIN TRANSACTIONS
Dane A. Miller, Ph.D., President and Chief Executive Officer and a member
of the Board of Directors of Biomet, is a majority shareholder in a corporation
which provides the use of an aircraft to Biomet on an as-needed basis. Biomet
pays a flat monthly fee of $15,600 to that corporation for the use of the
aircraft. During the last fiscal year, Biomet made payments to that corporation
of approximately $589,384 in rental fees and scheduled maintenance on the
aircraft, which includes maintenance fees accrued during prior years but paid
during fiscal year 1999. The Board of Directors believes the rental rate and
other terms of this arrangement to be no less favorable to Biomet 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 Biomet's
directors and executive officers and persons who own more than 10 percent of a
registered class of Biomet's equity securities to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in ownership of Biomet Common Shares and other equity securities. Officers,
directors and greater-than-ten percent shareholders are required by SEC
regulations to furnish Biomet with copies of all Section 16(a) forms filed by
them.
During fiscal year 1995, Niles L. Noblitt inadvertently failed to timely
report an exempt transaction involving a discretionary transfer of funds in his
401(k) account involving 5,283 shares, which represent less than 0.2% of Mr.
Noblitt's aggregate beneficial holdings of Biomet Common Shares. During fiscal
year 1999, James R. Pastena inadvertently failed to timely report the receipt of
a stock option award.
Except for the transactions referenced above, to Biomet's knowledge, based
solely on review of the copies of such reports furnished to Biomet 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, 1999.
17
<PAGE> 21
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS (ITEM 2)
Subject to ratification by the shareholders, the Board of Directors has
selected PricewaterhouseCoopers LLP as independent accountants for Biomet for
the fiscal year ending May 31, 2000. Biomet has been advised by such firm that
neither it nor any of its associates has any direct or material indirect
financial interest in Biomet.
Representatives of PricewaterhouseCoopers LLP 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, 1999.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of Biomet
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 of which Biomet
did not have notice by June 2, 1999 (45 days prior to August 11, the date of
mailing of proxy materials with respect to the 1998 Annual Meeting) 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; or (c) 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 Biomet.
By Order of the Board of Directors,
/s/ Daniel P. Hann
--------------------------
Daniel P. Hann, Secretary
July 28, 1999
