<PAGE>
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
[X] Definitive Proxy Statement Commission Only (as permitted by
[_] Definitive Additional Materials Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BI Incorporated
--------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
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(4) Date Filed:
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Notes:
<PAGE>
BI INCORPORATED
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------
TO BE HELD NOVEMBER 9, 1995
Boulder, Colorado
The Annual Meeting of Shareholders of BI Incorporated (the "Company") will be
held at the Raintree Plaza Hotel, 1900 Diagonal Highway 119, Longmont, Colorado,
at 10:00 a.m. local time, Thursday, November 9, 1995, for the following
purposes:
1. To elect nine (9) directors to serve until the next Annual Meeting and
until their successors have been duly elected and qualified.
2. To approve an amendment to the Company's 1991 Stock Option Plan.
3. To ratify the appointment of Price Waterhouse LLP as independent
accountants for the Company for the fiscal year ending June 30, 1996.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The minutes of the last annual shareholders' meeting and the
shareholders' list of their share eligibility to vote at the 1995 annual meeting
will be open to inspection by the shareholders at the Corporate office, 6400
Lookout Road, Boulder, Colorado 80301.
Shareholders of record at the close of business on September 20, 1995,
will be entitled to vote at the meeting, or any adjournment thereof.
YOUR PROXY
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED POSTPAID ENVELOPE.
SHOULD YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN THOUGH YOU HAVE
GIVEN A PROXY. THE PROMPT RETURN OF YOUR PROXY WILL BE OF GREAT HELP IN
PREPARING FOR THE MEETING.
By Order of the Board of Directors
Mckinley C. Edwards, Jr.
Secretary
Dated: October 2, 1995
<PAGE>
BI INCORPORATED
6400 LOOKOUT ROAD
BOULDER, COLORADO 80301
----------------------------
PROXY STATEMENT
----------------------------
SOLICITATION, EXERCISE AND REVOCABILITY OF PROXY
The enclosed proxy is solicited by the Board of Directors of BI
Incorporated (the "Company") for use at the Annual Meeting of Shareholders to be
held Thursday, November 9, 1995, or any adjournment thereof. It is anticipated
that this Proxy Statement and the accompanying form of proxy will first be
mailed to the shareholders of the Company on or about October 2, 1995. The
Company's principal executive offices are located at 6400 Lookout Road, Boulder,
Colorado 80301, and its telephone number at those offices is (303) 530-2911.
Proxies are revocable at any time before voted by written notice to the
Company, grant of a subsequent proxy, or voting at the meeting in person. Unless
contrary instructions are indicated on the proxy, all shares represented by
valid proxies received pursuant to the solicitation (and not properly revoked
before they are voted) will be voted (i) for the election of the nine nominees
to the Board of Directors named elsewhere herein; (ii) for approval of an
amendment to the 1991 Stock Option Plan; and (iii) for the ratification of the
appointment of Price Waterhouse LLP as independent accountants for the Company
for the fiscal year ending June 30, 1996. In the event a shareholder specifies a
different choice on his proxy, his shares will be voted in accordance with the
specifications so made.
COST OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company.
The Company may reimburse brokers and other custodians, nominees or fiduciaries
for their expenses in forwarding proxy material to principals and obtaining
their proxies.
VOTING
Only shareholders of record at the close of business on September 20,
1995 will be entitled to vote at the meeting. On September 20, 1995, there were
issued and outstanding 6,759,671 shares of Common Stock of the Company, entitled
to one vote per share. Shareholders are not entitled to cumulate their votes in
the election of Directors, which means that the holders of more than half the
shares voting for the election of the Directors can elect all the Directors if
they choose to do so. On all matters, a favorable vote consists of a simple
majority of the votes represented at a meeting at which a quorum is present.
The Board of Directors knows of no shareholder owning more than five
percent (5%) of the outstanding voting securities of the Company, except for
Dimensional Fund Advisors Inc., Wellington Management Company, and Scudder,
Stevens & Clark, Inc.
2
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors consists of eight incumbent members, and one
nominee, all of whom are to be elected at the meeting to hold office until the
next meeting of shareholders and until their successors are elected and
qualified.
INFORMATION CONCERNING DIRECTORS
William E. Coleman, Mckinley C. Edwards, Jr., David J. Hunter, Perry M.
Johnson, Jeremy N. Kendall, George J. Pilmanis, Frank L. Randall, Jr., and Byam
K. Stevens, Jr. were elected by the shareholders at the last annual meeting, and
have been nominated by the Board of Directors for re-election. Dean R. Pickerell
has resigned from the Board effective March 20, 1995, and will not be standing
for re-election. Beverly J. Haddon has been nominated by the Board of Directors
to stand for election. The Proxies cannot vote a greater number of persons than
the number of nominees named. All nominees have informed the Company that they
are willing to serve, if elected, and management has no reason to believe that
any nominee will be unavailable. In the event a nominee for directorship should
become unavailable for election, the persons named in the proxy will vote for
the election of any other person who may be recommended and nominated by the
Board for the office of director. Information regarding nominees and directors
is set forth below.
NOMINEES FOR ELECTION AS DIRECTORS
Age Director
--- Since
--------
WILLIAM E. COLEMAN is Chairman of Colorado 61 1984
Venture Management, Inc., a business consulting
and venture capital firm, and has been President
of Cogen Technology, Inc., developers of cogeneration
projects, since August 1987. He is also a director
of Hauser Chemical Research, Sievers Instruments, and
Sienna Imaging, Inc. Dr. Coleman has been Vice
Chairman of the Board since November 1992.
MCKINLEY C. EDWARDS, JR. has been Executive 53 1990
Vice President of Operations since April 1985. He
joined the Company in November 1983 as Manufacturing
Manager, was elected Vice President of Manufacturing
in November 1984 and was elected as Treasurer and
Secretary in June 1986.
BEVERLY J. HADDON has been Chief Operating 53 1994
Officer of CRL Associates, a business consulting
and government lobbying firm, since April 1993.
Prior to this date, over the past 28 years, she
held various positions, her latest being Executive
Vice President, with United Banks of Colorado,
currently called Norwest Banks.
DAVID J. HUNTER joined the Company in June 50 1982
1981 and served as Operations Manager and Vice
President of Operations from January 1982 to July
1982, Vice President and Chief Operating Officer
from July 1982 to April 1985, and as President and
Chief Executive Officer from April 1985 to the present.
PERRY M. JOHNSON has served as a Corrections 64 1994
Consultant since April 1988. He consults in the
areas of prison overcrowding, implementation of house
arrest and halfway house programs and development
of offender classification systems. Since January 1982
he has been Adjunct Professor for the School of
Criminal Justice at Michigan State University. Prior
to April 1988 Mr. Johnson was Deputy Director, Bureau
of Field Services; Director, Michigan Department of
Corrections; Warden, State Prison of Southern Michigan
and Deputy Director, Bureau of Correctional Facilities.
3
<PAGE>
JEREMY N. KENDALL has been Chairman and 55 1981
Chief Executive Officer of Stake Technology, Ltd.,
a company which has developed a process for
converting biomass into animal feed, chemicals
and pulp, since June 1983. Mr. Kendall is also
Chairman of Justice Electronic Monitoring Systems,
Inc., an independent distributor of certain of the
Company's products. He is director of Brigdon
Resources, Inc., Redauram Inc., and W. R. King LTD.
Mr. Kendall has been chairman of the Board since
November 1992.
GEORGE J. PILMANIS is Chairman and President of 57 1981
Balriga International Corp, a company concerned with
business development consulting in Eastern Europe and
the Far East. From April 1989 to June 1994 Mr. Pilmanis
was President and Chief Executive Officer of NOVATANK
Corporation, a manufacturer of fiberglass storage tanks.
Mr. Pilmanis was an employee of the Company between
July 1987 and February 1989, most recently serving as
Executive Vice President of Field Operations from April
1988 to February 1989. Mr. Pilmanis is a director of
Hathaway Corp.
FRANK L. RANDALL, JR. is a retired Vice-Chairman 77 1983
of North American Philips Corporation. Mr. Randall's
career included 27 years in electronics and 23 years
as a senior officer of North American Philips.
Mr. Randall is also a director of New England
Business Services, Inc., a supplier of business forms.
Mr. Randall was Chairman of the Board from December
1990 to November 1992.
BYAM K. STEVENS, JR. has served as a security 65 1989
analyst and portfolio manager for the stock brokerage
firm of H.G. Wellington & Co., Inc. since March 1986.
From January 1973 to that time, he served in the same
capacities for Stillman, Maynard & Co. until the two
firms merged.
DIRECTOR COMPENSATION
On July 10, 1995, the Board of Directors voted to amend the 1991 Stock
Option Plan in order to grant a non-qualified stock option for 4,500 shares to
new board members, which vests twelve months from election, as an incentive to
join the Company's Board of Directors. All current non-employee directors as of
July 1, 1995 were granted this bonus option, subject to shareholder approval.
These bonus options vest immediately for all directors except Mr. Johnson and
Ms. Haddon whose options vest 50% immediately and 50% on July 1, 1996. Each non-
employee director was granted, on July 1, 1995, an option pursuant to the 1991
Plan to purchase 4,500 shares of the Company's common stock at the closing price
on the date prior to the grant date for service in fiscal 1995. Non-employee
Directors received $750 for each Board of Directors meeting attended during the
fiscal year. Non-employee directors who are members of the Audit, Nomination and
Compensation Committees received $250 for each meeting attended during the
fiscal year as stated below. Annually, beginning November 9, 1995, each
reelected non-employee director will receive $5,000. In fiscal 1996 non-employee
directors will be paid $1,000 for each Board meeting attended and $250 for each
Committee meeting.
COMMITTEES, ATTENDANCE, NOMINATIONS
The Company has standing Audit, Nomination and Compensation Committees.
The Company's Audit Committee during fiscal 1995 was comprised of Messrs.
Coleman, Johnson, Pilmanis and Hunter. This Committee recommends engagement of
the Company's independent accountants, approves services performed by such
accountants, and reviews and evaluates the Company's accounting system of
internal controls. The Audit Committee met three times during fiscal year 1995.
During fiscal 1995, the Compensation Committee consisted of Messrs. Stevens,
Randall, Hunter (non-voting member), Kendall, and Ms. Haddon. This Committee
approves salaries and other compensation arrangements for the executive officers
of the Company. This Committee also approves option grants to eligible
4
<PAGE>
employees under the Company's stock option plans. The Compensation Committee met
four times during fiscal 1995. The Nomination Committee consisting of Messrs.
Coleman, Stevens, Hunter and Kendall did not meet in fiscal 1995. This committee
was formed to develop the composition and participation guidelines of the Board
of Directors. The Company's Board of Directors met four times during fiscal
1995. Each Director participated by personally attending during fiscal 1995 over
75% of both of the Board of Directors meetings and meetings of committees of
which he or she was a member.
Any shareholder who desires to propose a candidate for Board membership
should send to the attention of the Secretary of the Company a signed letter of
recommendation containing the name and address of the proposing shareholder and
the proposed candidate (see "Shareholder Proposals") and setting forth the
complete business, professional and educational background of the proposed
candidate.
5
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock, as of August 31, 1995 by (i) persons
known to the Company to own beneficially more than five percent (5%) of the
outstanding Common Stock of the Company, (ii) by each director, (iii) by each
named executive officer, and (iv) by all executive officers and directors as a
group. A person is deemed to be a beneficial owner of Common Stock that can be
acquired by such person within 60 days from August 31, 1995 upon the exercise of
warrants or options.
Name Amount and nature of Percent of Class
beneficial ownership
--------------------------------------------------------------------------------
Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, NY 10154 382,200 (1) 5.7%
Wellington Management Co.
75 State Street
Boston, MA 02109 472,000 (1) 7.0%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401 335,400 (1) 5.0%
Jackie A. Chamberlin 22,808 (2) *
William E. Coleman 75,467 (3) 1.1%
Mckinley C. Edwards, Jr. 99,840 (4) 1.5%
Beverly J. Haddon 7,750 (5) *
David J. Hunter 170,242 (6) 2.5%
Perry M. Johnson 6,750 (7) *
Jeremy N. Kendall 62,500 (8) *
George J. Pilmanis 70,208 (9) 1.0%
Frank L. Randall, Jr. 70,306 (10) 1.0%
Byam K. Stevens, Jr. 86,500 (11) 1.3%
Richard L. Willmarth 65,308 (12) *
All Officers and Directors
as a Group (11 persons) 737,679 (13) 10.1%
-------------------------
* Represents less than 1%
(1) As of June 30, 1995.
(2) Includes options to purchase 16,691 shares, exercisable within
sixty days.
6
<PAGE>
(3) Includes warrants/options owned by CVM Equity Fund I or Colorado Venture
Management to purchase 62,500 shares, exercisable within sixty days,
including 4,500 shares subject to shareholder approval on November 9,
1995, and 12,967 shares owned by CVM Equity Fund I and Colorado Venture
Management. Dr. Coleman is Chairman of Colorado Venture Management,
Inc., which is the general partner of CVM Equity Fund I.
(4) Includes options to purchase 80,693 shares, exercisable within sixty
days.
(5) Includes options to purchase 6,750 shares, exercisable within sixty
days, including 2,250 shares subject to shareholder approval on November
9, 1995.
(6) Includes options to purchase 125,551 shares, exercisable within sixty
days. Also includes 13,738 shares owned by Mr. Hunter's two sons, as to
which shares Mr. Hunter disclaims beneficial ownership.
(7) Includes options to purchase 6,750 shares, exercisable within sixty
days, including 2,250 shares subject to shareholder approval on November
9, 1995.
(8) Includes of options to purchase 62,500 shares, exercisable within sixty
days, including 4,500 shares subject to shareholder approval on November
9, 1995.
(9) Includes options to purchase 62,500 shares, exercisable within sixty
days, including 4,500 shares subject to shareholder approval on November
9, 1995.
(10) Includes options to purchase 55,000 shares, exercisable within sixty
days, including 4,500 shares subject to shareholder approval on November
9, 1995.
(11) Includes 24,000 shares owned by Mr. Stevens' relatives, as to which
shares he disclaims beneficial ownership. Also includes options to
purchase 62,500 shares, exercisable within sixty days, including 4,500
shares subject to shareholder approval on November 9, 1995.
(12) Includes options to purchase 41,408 shares, exercisable within sixty
days.
(13) Includes options or warrants to purchase 582,843 shares, exercisable
within sixty days, including 27,000 shares subject to shareholder
approval on November 9, 1995.
7
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Named Executive Officers, (Messrs. Hunter, Edwards, Willmarth and
Ms. Chamberlin) have employment agreements with the Company. These agreements
assure continuity of management in the event of any actual or threatened change
in control as defined in these agreements. The Company agrees to continue the
employ of the executive for one year from the effective date of the change in
control. The executive will receive annual salary and benefits of not less than
his current rate, and will be eligible to participate in bonus and other
incentive compensation plans on the same basis he or she was participating
before the change in control. If the executive is terminated as a result of the
change in control (as defined in the agreement) he or she will receive salary
and benefits as if he or she were an employee through the end of his or her
employment contract period.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
With respect to fiscal 1995 executive compensation, the Compensation Committee
(the "Committee") administered: the compensation for the corporate officers and
Board of Directors, the Incentive Stock Option Plan, the 1991 Stock Option Plan,
the Key Employee and Director Non-Qualified Stock Option Plan and the Employee
Non-Qualified Stock Option Plan. The Committee also annually establishes and
reviews the bonus program for corporate officers. The Committee's policy in
administering these plans and programs is to provide a strong and direct link
among shareholder value, company performance and executive compensation as well
as to structure sound compensation programs that will attract and retain high
quality people.
Officer Compensation Policy
As reported last year, the Committee retained the services of a professional
executive compensation consultant to help establish the corporate officer
compensation policy for fiscal 1995 and beyond. This consultant reviewed all
aspects of the short- and long-term compensation of corporate officers. The
Committee directed the consultant to research companies with characteristics
similar to those of the Company. Such characteristics included size, stature,
industry similarities, growth and investment patterns, earnings comparisons and
various ratio analyses. Additionally, the Committee's policy is to assure that
the officers are compensated annually at an average to similar positions at
these other companies, and over the long term at an above average level to
assure ample incentive for the growth and viability of the Company over time.
The Board of Directors, after reviewing the recommendations of the consultant,
have chosen to use the recommendations as a guideline when considering future
corporate officer compensation matters.
The Committee's corporate officer compensation policy is founded on principles
that guide the Company in establishing compensation programs at all levels of
the organization. These compensation programs are designed to treat all
employees fairly and to be cost-effective. To that end, all programs, including
those for corporate officers, have the following characteristics:
. Compensation is based on the level of job responsibility, the individual's
level of performance, and Company performance. Corporate officers have a
greater portion of their pay based on Company performance than do other
management employees.
. Compensation also takes into consideration the value of the job in the
marketplace. To retain its highly skilled work force, the Company strives to
remain competitive with the pay of employers of a similar stature who compete
with the Company for talent.
8
<PAGE>
. Through its stock option and stock purchase plans, the Company offers the
opportunity for equity ownership to all of its employees. In addition, the
Company provides corporate officers and other key employees the opportunity
to build more substantial equity ownership through the stock plans.
. One change that the Company has made in establishing and reviewing corporate
officer compensation is the timing of the compensation reviews. Such reviews
are being done at the first Compensation Committee meeting after the end of
each fiscal year rather than mid-year as has been done in the past. At these
reviews both short- and long-term compensation matters will be considered
based upon previous year-end results and the new plan for the future.
Fiscal 1995's revenue and net income were both at record levels, and were up
31.7% and 431% respectively over the revenue and net income levels of fiscal
1994. This was the result of several factors. The primary factor was a strategic
shift that the management effected over the past two years from one-time product
sales to recurring service sales. Recurring sales revenue accounted for nearly
60% of the Company's total revenue in fiscal 1995.
Because of this strong Company performance and management's success in
implementing the shift in strategy, the Committee recommended and the Board
approved cash bonuses for the four corporate officers, following the guidelines
set forth in the Fiscal 1995 Officer Bonus Guideline established in August 1994.
Long-term incentive compensation in the form of stock options is an important
element of the performance-based compensation of executive officers as well as
other managers and employees within the Company. The grant of stock options
continues the Company's long-standing practice of increasing management's equity
ownership in order to ensure that their interests remain closely aligned with
those of the Company's shareholders. Stock options and equity ownership in the
Company provide a direct link between executive compensation and shareholder
value and serve as an incentive because the exercise price is equal to the fair
market value on grant date; thus, executive officers will receive future gains
from these options only to the extent the price of the Company's stock
increases. Stock options, in addition to providing the Company's key employees
an opportunity for increased equity ownership also create an incentive to remain
with the Company for the long term.
Accordingly, in August 1994, the Committee recommended and the Board of
Directors approved option grants to each of the corporate officers. These
options were granted to provide additional incentive to the officers and were in
line with the Committee's policy, stated above, relative to long term
compensation. In July 1995 additional stock options were granted to each of the
corporate officers in recognition of their respective contributions to the
Company's success in fiscal 1995. In both grants, the Committee based its
decision in part using the guidelines set forth by the compensation consultant.
These grants were made pursuant to the Company's standard option compensation
procedures.
The Committee also considered the Company's performance in fiscal 1995 as
compared to the operating plan presented by management to the Board in August
1994. The Company exceeded both the revenue and net income targets of that plan.
It was therefore the Committee's recommendation and the Board approved a bonus
of stock options to each of the corporate officers as recognition of their
success in exceeding the operating plan and as additional long-term incentive to
extend the progress of the Company.
Chief Executive Officer Compensation
In August 1994, Mr. Hunter, the Company's President and Chief Executive Officer,
received an Incentive Stock Option of 25,000 shares in line with the
Compensation Policy discussed above.
In July 1995, Mr. Hunter, the Company's President and Chief Executive Officer,
also received both an Incentive Stock Option of 25,000 shares and a bonused
Incentive Stock Option of 25,000 shares. The level of the bonused Incentive
Stock Option was determined by the Committee to be appropriate in view of the
Company's performance above the operating plan as discussed above and was within
the guideline set forth by the compensation consultant.
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<PAGE>
The Committee reviews all compensation matters relative to the CEO after the
close of each fiscal year at June 30. At the first Compensation Committee
meeting of fiscal 1995, the Committee recommended and the Board approved an
annual salary of $150,000 for Mr. Hunter effective July 1, 1994. This salary
level was $20,000 more than the prior year but $50,000 less than the guideline
recommended by the compensation consultant.
In accordance with the Fiscal 1995 Officer Bonus Guideline, the Committee
recommended and the Board approved a bonus of 50% of Mr. Hunter's fiscal 1995
annual salary to be paid after the completion of the independent audit of the
fiscal 1995 financial statements.
The Committee will continue to review all aspects of Mr. Hunter's compensation
annually in July to establish goals for the ensuing fiscal year against which
his performance and adjustments in compensation will be evaluated.
Compensation Committee
Frank L. Randall, Jr., Chairman
Beverly J. Haddon
Jeremy N. Kendall
Byam K. Stevens, Jr.
David J. Hunter (non-voting member)
10
<PAGE>
The following table sets forth the compensation paid each of the last
three fiscal years ended June 30, 1995, 1994 and 1993 to the Company's Chief
Executive Officer and each Executive Officer who received compensation in excess
of $100,000 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-term Compensation
---------------------------- ------------------------------------
Awards Payouts
------------------------- -------
Number of
Restricted Option
Stock Shares LTIP* All Other
Name and title Year Salary Bonus Awards Granted Payouts Compensation(a)
-------------- ---- ----------- ------ ---------- ----------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
David J. Hunter 1995 $149,968 $75,000 0 75,000 0 $4,332
Chief Executive Officer 1994 129,772 20,000 0 150,735(b) 0 1,349
1993 124,024 29,494 0 80,735 0 1,155
Mckinley C. Edwards, Jr. 1995 $134,439 $54,000 0 37,500 0 $3,866
Executive Vice President, 1994 110,000 10,000 0 83,424(b) 0 1,170
Operations 1993 109,862 20,000 0 23,424 0 997
Richard L. Willmarth 1995 $124,960(c) $25,000 0 32,500 0 $1,344
Executive Vice President, 1994 155,672(c) 5,000 0 57,908(b) 0 1,312
Field Operations 1993 172,838(c) 0 0 6,000 0 1,554
Jackie A. Chamberlin(d) 1995 $ 89,663 $27,000 0 22,500 0 $1,797
Vice President, Finance 1994 70,500 5,000 0 41,755(b) 0 692
Chief Financial Officer
</TABLE>
* Long-term Incentive Plan
(a) Represents the matching contribution made pursuant to the Company's
retirement savings plan as follows: Mr. Hunter $1,477; Mr. Edwards
$1,296; Mr. Willmarth $1,344 and Ms. Chamberlin $849. In addition, the
Company has a policy to pay employees annually for earned but unused
vacation hours up to 40 hours. Other compensation includes $2,855 for
Mr. Hunter; $2,570 for Mr. Edwards and $948 for Ms. Chamberlin.
(b) These figures include previously granted options which the Board of
Directors repriced on April 18, 1994. All of Mr. Hunter's and Mr.
Edwards' shares underlying options listed for fiscal 1994 were the
result of repricing; 47,908 of Mr. Willmarth's shares underlying options
for fiscal 1994 were the result of repricing; and 30,755 of Ms.
Chamberlin's shares underlying options for fiscal 1994 were the result
of repricing. In addition, the termination date of options listed above
to purchase 40,000, 35,000 and 10,000 held by Messrs. Hunter, Edwards
and Willmarth, respectively, was extended from January 1995 to January
1997. No other amendments were made to the options, so the vesting
schedules and termination dates, as to the balance of repriced options,
remain unchanged.
(c) Mr. Willmarth accrues commissions on the Company's total revenue at the
time of sale. Commissions are earned and paid to Mr. Willmarth at the
time the Company receives payment. The table includes commissions of:
$14,767 earned and paid in fiscal 1995 for commissions accrued in fiscal
1994; $16,288 earned and paid in fiscal 1994 for commissions accrued in
11
<PAGE>
fiscal 1993; and $21,778 earned and paid in fiscal 1993 for commissions
accrued in fiscal 1992. At June 30, 1995 Mr. Willmarth had accrued,
unpaid commissions of $8,720.
(d) Ms. Chamberlin became an executive officer in November 1993.
STOCK OPTION GRANTS
The following table shows the stock options granted to the Named
Executive Officers during 1995 and the potential realizable value of those
grants (on a pre-tax basis) determined in accordance with SEC rules. The
information in this table shows how much the Named Executive Officers may
eventually realize in future dollars if the stock gains 5% or 10% in value per
year, compounded over the life of the options. These amounts represent assumed
rates of appreciation, and are not intended to forecast future appreciation of
the Company's Common Stock.
The options described in this table have exercise prices equal to the
fair market value of a share of Common Stock on the date they were granted.
OPTION SHARES GRANTED IN FISCAL 1995
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------- Potential Realizable
% of Total Value at Assumed
Number of Option Shares Annual Rates of Stock
Option Granted to Exercise Price Appreciation(b)
Shares Employees in Price Per Expiration ---------------------
Name Granted(a) Fiscal Year Share Date 5% 10%
------------------------ ----------- -------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
David J. Hunter 25,000 20.2% $4.19 8/11/01 $ 42,644 $ 99,378
50,000(c) 6.50 7/9/02 132,310 308,335
Mckinley C. Edwards, Jr. 12,500 10.1% $4.19 8/11/01 $ 21,323 $ 49,689
25,000(c) 6.50 7/9/02 66,155 154,168
Richard L. Willmarth 10,000 8.8% $4.19 8/11/01 $ 17,058 $ 39,751
22,500(c) 6.50 7/9/02 59,540 138,751
Jackie A. Chamberlin 5,000 6.1% $4.19 8/11/01 $ 8,529 $ 19,876
17,500(c) 6.50 7/9/02 46,309 107,917
</TABLE>
(a) Options vest over a four-year period, with one-fourth vesting one year
after the grant date and an additional one-fourth vesting every year
thereafter. In the event of termination on account of death or
disability, the options which are capable of vesting during the vesting
period in which death or disability occurs will vest.
(b) Calculated over a seven-year period, representing the life of the option.
(c) Granted July 10, 1995, for fiscal 1995 performance.
12
<PAGE>
STOCK OPTION EXERCISES AND OPTION VALUES
The following table shows information concerning the exercise of stock
options by each of the Named Executive Officers during fiscal 1995, and the
value of all remaining unexercised options at June 30, 1995, on a pre-tax basis.
AGGREGATE OPTION SHARES EXERCISED IN FISCAL 1995 AND JUNE 30, 1995 OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised, In-the-
Shares Options at 6/30/95 Money Options at 6/30/95(b)
Acquired on Net Value ------------------------------ -----------------------------
Name Exercise Realized(a) Exercisable Unexercisable(c) Exercisable Unexercisable
---- ----------- ----------- ----------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David J. Hunter 0 $0 105,367 120,368 $157,524 $135,013
Mckinley C. Edwards, Jr. 2,500 3,112 69,212 49,212 103,472 51,103
Richard L. Willmarth 0 0 47,408 43,000 72,450 47,610
Jackie A. Chamberlin 10,000 11,569 12,627 41,628 20,610 48,169
</TABLE>
(a) The net value realized on exercise of stock options is calculated by
subtracting the exercise price from the market value of the Company's
common stock as of the exercise date.
(b) The value of unexercised in-the-money options is equal to the market value
of the common stock at June 30, 1995 ($6.63 per share) less the per share
option price, multiplied by the number of exercisable or unexercisable
options.
(c) Includes options granted on July 10, 1995, for fiscal 1995 performance.
STOCK OPTION REPRICING
The following table shows information concerning the repricing of
options for each executive officer of the Company for the ten year period July
1, 1985 to June 30, 1995.
13
<PAGE>
<TABLE>
<CAPTION>
TEN-YEAR OPTION/SAR REPRICINGS
--------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of Market Price of Exercise Price Length of Original Option
Options/SARs Stock at Time of At Time of New Term Remaining at Date
Repriced or Repricing or Repricing or Exercise of Repricing
Amended Amendment Amendment Price or Amendment (in
Name Date (#) ($) ($) ($) months)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David J. Hunter 4/18/94 40,000 $4.88 $5.875 $5.13 9(1)
Chief Executive Officer 4/18/94 10,000 4.88 7.50 5.13 20
4/18/94 20,000 4.88 7.375 5.13 57
4/18/94 52,455 4.88 7.625 5.13 63
4/18/94 28,280 4.88 7.625 5.13 63
1/28/92 10,000 7.50 10.75 7.50 47
10/20/87 15,000 3.563 5.625 3.563 54
------------------------------------------------------------------------------------------------------------------------------
Richard L. Willmarth 4/18/94 10,000 4.88 5.875 5.13 9(1)
Executive Vice President, 4/18/94 10,000 4.88 7.50 5.13 15
Field Operations 4/18/94 11,908 4.88 7.00 5.13 27
4/18/94 10,000 4.88 7.375 5.13 57
4/18/94 6,000 4.88 7.625 5.13 63
1/28/92 10,000 7.50 12.938 7.50 42
--------------------------------------------------------------------------------------------------------------------------------
Mckinley C. Edwards, Jr. 4/18/94 35,000 4.88 5.875 5.13 9(1)
Executive Vice President, 4/18/94 10,000 4.88 7.50 5.13 20
Operations 4/18/94 15,000 4.88 7.375 5.13 57
4/18/94 23,424 4.88 7.625 5.13 63
1/28/92 10,000 7.50 10.75 7.50 47
10/20/87 10,000 3.563 5.625 3.563 54
--------------------------------------------------------------------------------------------------------------------------------
Jackie A. Chamberlin 4/18/94 10,000 $4.88 $7.50 $5.13 12
Chief Financial Officer 4/18/94 2,500 4.88 7.00 5.13 27
Vice President Finance 4/18/94 7,000 4.88 8.25 5.13 55
4/18/94 11,255 4.88 7.625 5.13 63
1/28/92 10,000 7.50 9.9375 7.50 39
10/20/87 1,268 3.563 4.93 3.563 59
10/20/87 6,499 3.563 4.93 3.563 59
--------------------------------------------------------------------------------------------------------------------------------
John K. Fulda, Jr.(2) 4/18/94 2,000 4.88 7.50 5.13 12
Vice President Monitoring 4/18/94 5,000 4.88 7.50 5.13 12
4/18/94 10,000 4.88 7.50 5.13 20
4/18/94 5,777 4.88 7.625 5.13 63
1/28/92 2,000 7.50 10.75 7.50 39
1/28/92 5,000 7.50 10.75 7.50 39
1/28/92 10,000 7.50 10.75 7.50 47
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) While this reflects the length of the original option term remaining at the
--------
date of repricing, the actual length of the option term remaining is now 33
months, because the termination date for these options was extended from
January 1995 to January 1997 at the time they were repriced.
(2) Mr. Fulda left the Company on August 12, 1994.
14
<PAGE>
Compensation Committee: Frank L. Randall, Jr., Chairman, Beverly J. Haddon, Byam
K. Stevens, Jr., Jeremy Kendall, David J. Hunter (non-voting member).
RELATED PARTY TRANSACTIONS; COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
As of June 30, 1995, the Company owned approximately 16% of the
stock of JurisMonitor ("Juris"), an entity where certain directors of
the Company are also investors. As of June 30, 1995, Juris owed the
Company approximately $60,000. Subsequent to year end the Company signed
a letter of intent to acquire the assets of Juris for $25,000 plus non-
guaranteed royalties on future revenues up to $275,000.
During fiscal 1995 the Company sold home arrest equipment and
services to JEMTEC, Inc. in the amount of $160,000. Mr. Kendall, the
Chairman of the Company, is Chairman of JEMTEC, Inc..
Mr. Hunter, the Company's CEO, served as a non-voting member of
the Company's compensation committee during fiscal 1995, but did not
participate in discussions involving his compensation.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities
and Exchange Commission. Officers, directors and greater than ten-
percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
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, during the fiscal year ended June
30, 1995, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied
with, except that one report of one transaction was filed late by Mr.
Kendall.
CORPORATE PERFORMANCE GRAPH
The following performance graph compares the yearly percentage
change in the cumulative total shareholder return on the Company's
common stock with CRSP (Center for Research in Security Prices) Total
Return Index for the Nasdaq Stock Market (U.S. companies) and the CRSP
Total Return Index for Nasdaq Stocks for a selected peer group of seven
companies whose information and identification products include radio
frequency identification technology and personal response services for
the preceding five year period. This graph includes the same peer group
reported in the Company's fiscal 1994 proxy statement.
15
<PAGE>
PERFORMANCE GRAPH
The following indexed graph indicates the Company's total return to its
stockholders from June 29, 1990 to June 30, 1995 as compared to total return for
the Nasdaq Stock Market (U.S. companies) Index and a self-determined Peer Group
Index selected by the Company, assuming a common starting point of $100 and that
all dividends were reinvested. The information contained in this graph is not
necessarily indicative of future Comapny performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG BI INCORPORATED, THE NASDAQ STOCK MARKET (U.S. COMPANIES) INDEX
AND A PEER GROUP**
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) BI Incorporated Nasdaq Index Peer Group
--------------------- --------------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt-6/29/90 $100.00 $100.00 $100.00
FYE 1991 $ 57.14 $105.89 $ 80.67
FYE 1992 $ 52.94 $127.20 $ 87.99
FYE 1993 $ 55.46 $159.97 $110.45
FYE 1994 $ 31.93 $161.56 $ 83.75
FYE 1995 $ 44.54 $215.36 $ 95.21
</TABLE>
* Total return includes reinvestment of dividends (if applicable).
Dates are for fiscal years ending on June 30 in each of the years
indicated.
** Self-determined peer group consists of seven companies which are as follows:
American Medical Alert Corp, Checkpoint Systems, Inc., Digital Products Corp,
Respond USA, Inc., Amtech Corp, Destron Fearing Corp and Lifeline Systems, Inc.
Five of these companies have a standard industrial classification code of 366 to
369. Two companies provide personal emergency response monitoring. Digital
Products Corp is the only company competing directly in the same market with the
Company.
16
<PAGE>
PROPOSALS FOR VOTING
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
election of the nine directors, as discussed under "Election of Directors."
PROPOSAL TWO: APPROVAL OF AN AMENDMENT TO THE 1991 STOCK OPTION PLAN
DESCRIPTION OF AMENDMENT
The Board of Directors has approved an amendment to the Company's 1991
Stock Option Plan (the "Plan"). The amendment provides for the automatic grant
of an option to purchase 4,500 shares of Common Stock to each non-employee
director upon the initial election of such director to the board of directors
or, in the case of current non-employee directors, upon the date the amendment
was adopted by the Board. Pursuant to this amendment, options to purchase an
aggregate of 31,500 shares were granted to the seven non-employee directors.
Assuming annual rates of stock price appreciation during the option term of five
percent and ten percent, these options had potential realizable values on the
date of grant of $84,956 and $197,987, respectively.
DESCRIPTION OF THE PLAN.
General. The Plan was adopted by the Board of Directors on July 29, 1991
-------
and approved by the shareholders on November 7, 1991 for the purpose of
providing employees and those associated with the Company as consultants and
directors with the opportunity to participate in the Company's growth through
the purchase of the Company's Common Stock and to provide increased incentive to
promote the interests of the Company.
Administration of the Plan. The Plan is administered by a committee of
--------------------------
at least two members of the Board of Directors who meet the requirements of Rule
16b-3 of the Securities Exchange Act of 1934 relating to "disinterested"
administrators of a stock plan (the "Board"). The Board may from time to time
adopt such rules and regulations as it deems advisable for the administration of
the Plan, and may alter, amend or rescind any such rules and regulations in its
discretion. The Board has the power to interpret, amend or discontinue the Plan.
Participation. On June 30, 1995, approximately 240 employees and
-------------
directors of the Company were eligible to participate in the Plan, 100 employees
were participating in the Plan, and options to purchase 488,280 shares of common
stock were outstanding under the Plan at exercise prices ranging from $4.19 to
$7.38 per share, pursuant to options expiring from December 22, 1998 to April
24, 2002. During fiscal year 1995, 7,512 options were exercised.
Grant of Options. Options may be granted under the Plan for a total of
----------------
1,050,000 shares of Common Stock. The Board determines the terms of options
granted under the Plan, including the type of option (which can be incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or non-qualified stock options), the exercise
price, the number of shares subject to the option, and the exercisability
thereof. The Board also determines, at the time of grant, the period during
which the option will be exercisable.
Grant of Options to Directors. Under the Plan non-employee directors of
-----------------------------
the Company receive stock options on a nondiscretionary basis. The Plan provides
for an automatic grant of an option to purchase 4,500 shares of Common Stock
17
<PAGE>
(subject to adjustment for directors not serving on the Board for the entire
fiscal year then ended) to each non-employee director on the first day of the
Company's fiscal year, which options are immediately exercisable. Under the
proposed amendment, non-employee directors also receive an automatic, one-time
grant of an option to purchase 4,500 shares of Common Stock upon their initial
election to the Board of Directors which vests over twelve months or, in the
case of current non-employee directors, upon the date the amendment was adopted
by the Board. Upon the termination of a director's status, options exercisable
on the date of termination remain exercisable until otherwise terminated by
their terms. Each such option granted under the Plan expires ten years from the
date of grant. The option exercise price must be equal to 100% of the fair
market value of the Common Stock on the date prior to the date of grant of the
option. Options granted to non-employee directors under the Plan will be treated
as non-qualified stock options under the Code. The Plan is currently
administered by the Compensation Committee.
Terms and Conditions of Options. The Board may impose on an option any
-------------------------------
additional terms and conditions which it deems advisable and which are not
inconsistent with the Plan. The exercise price of any option granted under the
Plan must not be less than 100% of the fair market value of a share of Common
Stock as of the date prior to the date of grant, except that as to an optionee
who at the time an incentive stock option is granted owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company, the exercise price of such incentive stock option must be at least
equal to 110% of the fair market value of the shares as of the date prior to the
date of the grant. In addition, no incentive stock option can be granted to any
employee where the aggregate fair market value of the shares (determined at the
date of such option grant) for which such incentive stock options are
exercisable for the first time in any calendar year exceeds $100,000. Except
with respect to options granted to non-employee directors, unless otherwise
provided by the Board of Directors, options granted under the Plan mature and
become exercisable 25% at the end of the first year from the grant date and 25%
at the end of each six month period thereafter. In connection with a merger,
sale of all of the Company's assets, or other transaction which results in the
replacement of the Company's Common Stock with the stock of another corporation,
the Board may terminate stock options, accelerate the exercise date of stock
options, or provide for the assumption or replacement of stock options with
comparable options of such other corporation. No option granted under the Plan
is transferable by the optionee other than by will or the laws of descent and
distribution and each option is exercisable, during the lifetime of optionee,
only by such optionee.
Exercise of Options. An optionee may exercise less than all of the
-------------------
matured portion of an option, in which case such unexercised, matured portion
shall continue to remain exercisable, subject to the terms of the Plan, until
the option terminates.
Each option granted under the Plan terminates (i) the number of years
after the date of grant as is designated by the Board, or (ii) three months
following the termination, for any reason other than death or disability, of the
employment by the Company, or by its parent or subsidiary, of an employee (but
not consultants) to whom the option is granted, or (iii) one year following the
termination, on account of death or disability, of the employment by the Company
or by its parent or subsidiary, of the employee or consultant to whom the option
is granted (in which case the employee will be deemed to have completed the full
vesting period during which such employee died or becomes disabled). The Board
of Directors may provide, at the time of grant, that the termination date for a
non-qualified stock option to an employee or consultant could be as long as
twenty (20) years from the grant date, and the termination date for an incentive
stock option could be as long as ten (10) years from the grant date. As
described above, options granted to non-employee directors terminate ten (10)
years from the grant date.
The option holder may, at the Company's discretion, pay the purchase
price in whole or in part by transferring to the Company shares of the Company's
Common Stock held by the optionee for at least 6 months prior to the exercise
date which are equal in fair market value to all or part of the shares being
purchased. The Company may in its discretion allow
18
<PAGE>
the optionee to elect either to deliver shares of Common Stock already owned by
the optionee or to have the Company withhold shares exercised in payment of any
withholding taxes due upon exercise of the option.
FEDERAL INCOME TAX CONSEQUENCES.
Incentive Stock Options. The Company anticipates that all options
-----------------------
granted under the Plan and treated by the Company as "incentive stock options,"
that is, a stock option described in Section 422 of the Code, will have the
following anticipated (but not guaranteed) federal income tax consequences,
among others:
a. The optionee will recognize no income at the time of grant.
b. Upon exercise of the incentive stock option, no income will result
to any party.
c. If there is no disposition of the shares until a date that is both
(i) two years from the grant of an stock incentive option and (ii)
one year from its exercise, no amount will be ordinary income and,
upon disposition in a taxable transaction, the employee will receive
long-term capital gain or loss treatment equal to the difference
between his amount realized and the option price. Any gain realized
upon a disposition other than as set forth above may result in
ordinary income tax treatment to the optionee.
d. In the event of the tax treatment to the employee described in (c)
above, the Company receives no deduction in connection with the
transaction.
e. Certain optionees may incur alternative minimum tax treatment under
the Code upon exercise of an incentive stock option.
Non-qualified Stock Options. The Company anticipates that all non-
---------------------------
qualified stock options granted under the Plan will have the following
anticipated (but not guaranteed) federal income tax consequences, among others:
a. The optionee will recognize no income at the time of grant.
b. Upon exercise of the non-qualified stock option, the individual to
whom the option is granted should be deemed to receive ordinary
income at the time of exercise equal to the excess, if any, of the
fair market value of the acquired shares at such time over the
option price for such shares.
c. If the shares acquired upon the exercise of a non-qualified stock
option are disposed of in a taxable transaction, the individual
disposing of such shares will have a realized and recognized capital
gain or loss equal to the difference, if any, between the amount
realized and the adjusted basis of such shares to him. Such gain or
loss will be long-term or short-term depending on whether such
shares are held for longer than six months (one year for stock
acquired prior to June 23, 1984), or not. The adjusted basis usually
(but not always) will include the option price plus any ordinary
income described in (b) with respect to such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S 1991 STOCK OPTION PLAN.
19
<PAGE>
PROPOSAL THREE: APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the shareholders ratify the
appointment of Price Waterhouse LLP, independent accountants, to audit the
financial statements of the company for the fiscal year ending June 30, 1996.
Price Waterhouse LLP has been the Company's independent accountant for over ten
years. A representative of Price Waterhouse LLP will be present at the annual
meeting and will have an opportunity to make a statement if he so desires. This
individual will also be available to respond to appropriate questions. An
adverse vote will be considered as a direction to the Board of Directors to
select other independent accountants for the fiscal year ending June 30, 1997.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
presented at the Annual Meeting other than those described above. However, if
any other matters properly come before the meeting it is intended that the
person named in the enclosed proxy will vote on such matters in accordance with
his or her best judgment.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1996 Annual
Meeting must be received by the Company, attention of the Secretary, 6400
Lookout Road, Boulder, Colorado 80301 by June 3, 1996, and must be made in
compliance with federal securities laws.
ANNUAL REPORT - FINANCIAL STATEMENTS
A copy of the Annual Report to Shareholders, including financial
statements for each of the three years in the period ended June 30, 1995, is
being mailed to all shareholders herewith. The Annual Report is not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
By Order of the Board of Directors
Mckinley C. Edwards, Jr.
Secretary
Dated: October 2, 1995
20
<PAGE>
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF BI INCORPORATED
FOR ANNUAL MEETING ON NOVEMBER 9, 1995
The undersigned hereby appoints David J. Hunter and Mckinley C.
Edwards, Jr., or either of them, attorneys and proxies for the undersigned, with
full power of substitution, to vote all shares of capital stock of BI
Incorporated (the "Company") held of record by the undersigned on September 20,
1995, at the Annual Meeting of Stockholders of BI Incorporated to be held at the
Raintree Plaza Hotel, 1900 Diagonal Highway 119, Longmont, Colorado on Thursday,
November 9, 1995, 10:00 a.m., M.S.T., and at any adjournment thereof. The
undersigned hereby revokes any proxy or proxies heretofore given in respect to
the same shares of stock.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BELOW
BY THE UNDERSIGNED WITH RESPECT TO PROPOSALS 1, 2 AND 3. IF NO DIRECTION IS
GIVEN, SUCH SHARES WILL BE VOTED FOR SUCH PROPOSALS AND SUCH SHARES WILL BE
VOTED IN EITHER OR BOTH OF THE PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING.
<PAGE>
TO ENSURE A QUORUM, YOU ARE URGED TO DATE AND SIGN THIS PROXY ON THE
LINE BELOW AND MAIL IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
THE DIRECTORS RECOMMEND A VOTE FOR THESE THREE PROPOSALS:
1. Election of Directors.
FOR (except as WITHHOLD AUTHORITY to vote for
--- (listed below) --- all nominees listed below
Nominees: William E. Coleman, Mckinley C. Edwards, Jr.,
Beverly J. Haddon, David J. Hunter, Jeremy N.
Kendall, George J. Pilmanis, Frank L. Randall, Jr.,
Byam K. Stevens, Jr. and Perry M. Johnson
If you desire to withhold authority to vote for any individual
nominee, please write the nominee's name on the space provided:
--------------------------------------------
2. Approval for an amendment to the Company's 1991 Stock Option
Plan.
FOR AGAINST ABSTAIN
--- --- ---
3. Ratification of Price Waterhouse LLP as independent accountants.
FOR AGAINST ABSTAIN
--- --- ---
In their discretion, the above-named proxies are authorized to
vote upon such other business as may properly come before the
meeting or any adjournment hereof.
Dated: , 19
---------------------- --
----------------------------------
Signature
----------------------------------
Signature if held jointly
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as 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.
