SCHEDULE 14A
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 Section 240.14a-12
BIOMET INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
(BIOMET, INC. LOGO)
August 14, 2003
To the Shareholders of Biomet, Inc.:
You are cordially invited to attend our Annual Meeting of Shareholders on
Saturday, September 27, 2003, at 1:30 p.m., local time, at Biomet's Corporate
Headquarters located at 56 East Bell Drive, Warsaw, Indiana. Information
regarding the matters to be voted upon at the Annual Meeting 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. The vote of each shareholder is of utmost
importance. For this reason, we urge you to vote your proxy promptly, whether or
not you plan to attend the Annual Meeting.
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
(BIOMET, INC. LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 27, 2003
TO THE SHAREHOLDERS OF BIOMET, INC.:
The Annual Meeting of Shareholders of Biomet, Inc. will be held on Saturday,
September 27, 2003, at 1:30 p.m., local time, at Biomet's Corporate Headquarters
located at 56 East Bell Drive, Warsaw, Indiana, for the following purposes:
(1) To elect four Class II directors to serve for terms of three years each.
(2) To ratify the selection of Ernst & Young LLP as independent accountants for
the fiscal year ending May 31, 2004.
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Shareholders of record as of the close of business on August 7, 2003 are
entitled to receive notice of and to vote at the Annual Meeting. We urge you to
vote your shares promptly, 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.
By order of the Board of Directors,
/s/ DANIEL P. HANN
Daniel P. Hann, Secretary
August 14, 2003
Warsaw, Indiana
YOUR VOTE IS VERY IMPORTANT. PLEASE VOTE YOUR PROXY PROMPTLY.
(BIOMET, INC. LOGO)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 27, 2003
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 Biomet's
Corporate Headquarters located at 56 East Bell Drive, Warsaw, Indiana, on
Saturday, September 27, 2003, at 1:30 p.m., local time, or any adjournment or
postponement thereof. This Proxy Statement and the accompanying proxy card were
first mailed to shareholders on or about August 22, 2003. 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:
o The election of four Class II directors (Jerry L. Ferguson; Daniel P.
Hann; Thomas F. Kearns, Jr.; and Dane A. Miller, Ph.D.) for three-year
terms.
o The ratification of the selection of Ernst & Young LLP as independent
accountants for the fiscal year ending May 31, 2004.
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 set forth later
in this Proxy Statement. In summary, the Board recommends that you vote:
o FOR the election of the nominees for directors.
o FOR ratification of the appointment of Ernst & Young LLP as Biomet's
independent accountants for fiscal year 2004.
With respect to any other matter that properly comes before the Annual Meeting,
the proxy holders will vote in accordance with their best judgment.
WHO IS ENTITLED TO VOTE?
Only those persons who own Biomet Common Shares at the close of business on the
record date, August 7, 2003, are entitled to receive notice of and to vote at
the Annual Meeting, or any adjournment or postponement of the meeting. As of the
record date, there were 256,391,095 Common Shares of Biomet issued and
outstanding. Each shareholder is entitled to one vote for each Biomet Common
Share owned as of the close of business on August 7, 2003.
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. Proxies submitted by brokers that do not indicate voting instructions
for a proposal 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, but will not be counted "for" or "against" the proposal. A quorum must
be present for a proposal to be properly approved at the Annual Meeting.
WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND AS
A BENEFICIAL OWNER?
If your shares are registered directly in your name with our transfer agent you
are considered to be the "shareholder of record" with respect to those shares.
This Proxy Statement, the Annual Report to Shareholders and the proxy card have
been sent directly to you.
If your shares are held in a stock brokerage account, by a bank or other
nominee, you are considered to be the "beneficial owner" of the shares held in
street name. This Proxy Statement and the Annual Report to Shareholders have
been forwarded to you by your broker, bank or other nominee, who is considered
to be the shareholder of record with respect to those shares. As the beneficial
owner of the shares, you have the right to direct your broker, bank or other
nominee how to vote your shares by using the voting instruction card included in
the mailing.
HOW DO I VOTE?
It is important that you vote each proxy you receive. If your proxy card does
not indicate your voting preference, your shares will be voted FOR the two
proposals on your behalf.
SHAREHOLDERS OF RECORD. Shareholders of record may vote in person at the Annual
Meeting or by proxy, whether or not they plan to attend the Annual Meeting. This
year there are two convenient voting methods for shareholders of record to vote
by proxy.
o VOTING BY INTERNET. We encourage you to vote by using the Internet at
www.proxyvote.com. Please refer to the voting information on the proxy
card and on the website for directions on the manner in which to
transmit your voting instructions. Voting on the Internet has the same
effect as voting by mail. The deadline for Internet voting is 11:59
p.m. Eastern Time, Friday, September 26, 2003. Internet voting is
available 24 hours a day. If you vote by the Internet you should NOT
return your proxy card by mail.
o VOTING BY MAIL. If you choose to vote by mail, please mark, sign and
date each proxy card you receive and return it as soon as possible in
the postage-paid envelope provided.
BENEFICIAL OWNERS. Beneficial owners must refer to the voting information
provided by their broker, bank or other nominee to determine the manner in which
voting instructions are to be transmitted. A beneficial owner who wishes to vote
in person at the Annual Meeting must obtain an additional proxy from the broker,
bank or other nominee to do so, and must present that proxy at the Annual
Meeting.
2
HOW CAN I CHANGE MY VOTE?
If you are a beneficial owner, you must contact your broker, bank or other
nominee to determine how to change your voting instructions. If you are a
shareholder of record, you may change your vote at any time prior to the
tabulation of votes at the Annual Meeting. To do so, you must (1) deliver a
written notice of revocation to the Secretary of Biomet at P.O. Box 587, Warsaw,
IN 46581-0587, (2) submit a properly executed proxy bearing a later date in
writing or on the Internet, or (3) attend the Annual Meeting and cast your vote
in person.
HOW DO I VOTE MY SHARES IN BIOMET'S EMPLOYEE STOCK BONUS PLAN?
If you are one of Biomet's team members (Biomet refers to its employees as team
members) eligible to participate in Biomet's Employee Stock Bonus Plan ("Bonus
Plan"), you will receive a request for voting instructions from the Bonus Plan
trustee with respect to the shares allocated to your account in the Bonus Plan.
You are entitled to direct the Bonus Plan trustee how to vote your Bonus Plan
shares. If you do not provide voting instructions to the Bonus Plan trustee
within the prescribed time, the shares allocated to your account in the Bonus
Plan will be voted by the Bonus Plan trustee in the same proportion as the
shares held by the Bonus Plan trustee for which voting instructions have been
received from other members of the Bonus Plan. You may revoke your previously
provided voting instructions by filing with the Bonus Plan trustee either a
written notice of revocation or a properly executed proxy bearing a later date.
HOW MANY VOTES ARE NEEDED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The four nominees receiving the greatest number of votes
will be elected as directors. Withheld votes and broker non-votes will not be
counted as votes in favor of any nominee.
OTHER MATTERS. The ratification of the independent accountants and approval of
any other matter that properly comes before the Annual Meeting requires that the
number of votes cast "for" exceed those cast "against." Abstentions and broker
non-votes will not be counted as votes for or against any such matters.
WHAT IS "HOUSEHOLDING" AND HOW DOES IT AFFECT ME?
In an effort to reduce printing and postage costs, Biomet has adopted a process
for mailing the Annual Report to Shareholders and Proxy Statement known as
"householding." Householding has been approved by the Securities and Exchange
Commission and permits Biomet to mail only one copy of the Annual Report and
Proxy Statement to shareholders of record who share the same last name and
address, unless we receive contrary instructions from any shareholder of record
at that address. Each shareholder of record will continue to receive a separate
proxy card.
If you prefer to receive multiple copies of the Annual Report and Proxy
Statement at the same address, additional copies will be provided to you
promptly upon request. You may contact the Investor Contact in writing at
Biomet, Inc., P.O. Box 587, Warsaw, IN 46581-0587, or by telephone at
574.372.1514. If you are a shareholder of record receiving multiple copies of
the Annual Report and Proxy Statement and would prefer to receive a single copy,
please contact us at the address and phone number provided above. If you are a
beneficial owner, information regarding householding should be forwarded to you
by your broker, bank or other nominee.
3
WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
It means you have shares registered in more than one account. Please vote ALL
proxy cards to ensure that all of your shares are counted.
WHO CAN ATTEND THE ANNUAL MEETING?
All shareholders as of the close of business on August 7, 2003, 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 1:00 p.m.
WHAT TIME IS THE ANNUAL MEETING?
The Annual Meeting will begin at 1:30 p.m., local time. Please note that local
time is Eastern Standard Time, NOT Eastern Daylight Savings Time (i.e., during
this time of year, Warsaw is on the same time as Chicago). PRIOR TO THE ANNUAL
MEETING, THERE WILL BE TOURS OF BIOMET'S FACILITY FROM 12:00 NOON TO 1:00 P.M.
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 proxy card and
the Annual Report for mailing to beneficial owners and, upon request, will
reimburse 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,
by telephone, by mail, facsimile transmission, or other forms of electronic
communication. Biomet's directors, officers and employees will not receive any
additional compensation for such activities.
4
STOCK OWNERSHIP
WHO ARE THE BENEFICIAL OWNERS OF MORE THAN 5% 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 August 7, 2003. Unless stated
otherwise, each beneficial owner has sole voting and investment power with
respect to the shares indicated.
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------
State Farm Mutual Automobile 18,906,982(1) 7.4%
Insurance Company and
related entities
One State Farm Plaza
Bloomington, Illinois 61710
FMR Corp. and related entities 17,868,206(2) 7.0%
82 Devonshire Street
Boston, Massachusetts 02109
(1) According to a Schedule 13G/A filed with the Securities and Exchange
Commission by State Farm Mutual Automobile Insurance Company ("SFMAIC") and
certain related entities on February 7, 2003, SFMAIC has sole voting and
dispositive power with respect to 9,409,500 shares and shared dispositive power
with respect to 67,946 shares; State Farm Life Insurance Company has sole voting
and dispositive power with respect to 169,975 shares and shared dispositive
power with respect to 3,434 shares; State Farm Fire and Casualty Company has
shared dispositive power with respect to 8,567 shares; State Farm Investment
Management Corp. has sole voting and dispositive power with respect to 4,398,750
shares and shared voting and dispositive power with respect to 8,793 shares;
State Farm Insurance Companies Employee Retirement Trust has shared dispositive
power with respect to 6,967 shares; State Farm Insurance Companies Savings and
Thrift Plan for U.S. Employees has sole voting and dispositive power with
respect to 4,815,000 shares; and State Farm Mutual Fund Trust has sole voting
and dispositive power with respect to 18,050 shares.
(2) According to a Schedule 13G filed with the Securities and Exchange
Commission by FMR Corp. ("FMR"), Edward C. Johnson III and Abigail P. Johnson on
February 13, 2003, all such shares are beneficially owned by five entities: (a)
Fidelity Management & Research Company, a registered investment advisor to
various investment companies ("Fidelity Funds") and a wholly-owned subsidiary of
FMR ("FM&RC"), (b) Fidelity Management Trust Company, a wholly-owned subsidiary
of FMR ("FMTC"), (c) Strategic Advisors, Inc., a wholly-owned subsidiary of FMR
and an investment adviser to individuals ("SA Inc."), (d) Geode Capital
Management, LLC, an entity indirectly owned by certain employees and
shareholders of FMR ("Geode"), and (e) Fidelity International Limited ("FIL").
FM&RC is the beneficial owner of 16,863,112 shares. Mr. Johnson (Chairman of
FMR), FMR (through its control of FM&RC) and Fidelity Funds each has sole
dispositive power with respect to 16,863,112 shares. Neither Mr. Johnson nor FMR
has the sole power to vote or direct the voting of the shares owned directly by
Fidelity Funds. The sole voting power of all shares directly owned by Fidelity
Funds resides with the Board of Trustees of such funds. FMTC is the beneficial
owner of 433,328 shares as a result of it serving as investment manager of
various institutional accounts. Mr. Johnson and FMR (through its control of
FMTC) each has sole dispositive and voting power with respect to the 433,328
shares owned by various institutional accounts. SA Inc., Geode and FIL are the
beneficial owner of 88,449 shares, 937 shares and 482,380 shares, respectively.
5
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
August 7, 2003 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.
OPTION
NUMBER SHARES TOTAL NUMBER
OF SHARES BIOMET'S 401(k) PROFIT EXERCISABLE OF SHARES
NAME OF BENEFICIALLY EMPLOYEE STOCK SHARING PLAN WITHIN BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) BONUS PLAN(2) AND TRUST(3) 60 DAYS(4) OWNED OF CLASS
---------------- ------------ ------------- ------------- ----------- ------------ --------
Garry L. England 172,804 22,975 32,780 19,875 240,721 *
Jerry L. Ferguson 3,137,455 3,489 -- -- 3,140,944 1.2%
Daniel P. Hann 72,396 10,495 2,847 19,875 102,050 *
C. Scott Harrison, M.D. 720,743 -- -- 16,644 737,387 *
M. Ray Harroff 46,821 -- -- 7,000 53,821 *
Thomas F. Kearns, Jr. 8,964 -- -- 4,000 12,964 *
Dane A. Miller, Ph.D. 7,422,294 31,782 22,716 -- 7,143,792 2.9%
Jerry L. Miller 3,893,151 -- -- 7,000 3,900,151 1.5%
Kenneth V. Miller 9,828 -- -- 7,000 19,495 *
Charles E. Niemier 753,414 27,471 35,967 19,875 841,027 *
Niles L. Noblitt 4,542,454 32,384 52,815 -- 4,627,668 1.8%
James R. Pastena 123,132 11,984 11,110 22,335 165,975 *
Marilyn Tucker Quayle 21,637 -- -- 7,000 28,637 *
Prof. Dr. Bernhard Scheuble 327 -- -- 4,000 4,327 *
L. Gene Tanner 105,039 -- -- 4,000 109,039 *
Other Executive Officers (4 persons) 469,872 38,196 41,450 54,175 603,693 *
------- ---------- ---
All Directors and Executive
Officers as a Group 192,779 22,071,571 8.6%
* Represents less than 1.0% of Biomet's issued and outstanding Common Shares.
(1) Except as noted below, each director and executive officer has sole or
shared voting power and investment power with respect to the Common
Shares listed next to his or her name:
o Mr. Garry England--4,050 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 4,111 shares owned of record
by Mr. England's children, as to which Mr. England has no voting or
investment power and disclaims beneficial ownership.
o Mr. Jerry Ferguson--278,754 shares owned of record by Mr. Ferguson's
wife and 38,880 shares held in an IRA for her benefit, as to which Mr.
Ferguson has no voting or investment power and disclaims beneficial
ownership; and 58,806 shares held in an IRA for Mr. Ferguson's benefit
as to which he has investment power but no voting power.
o Dr. Dane Miller--3,550,447 shares owned of record by Dr. Miller's wife
and 44,973 shares held in an IRA for her benefit, as to which Dr.
Miller has no voting or investment power and disclaims beneficial
ownership; and 103,473 shares held in an IRA for the benefit of Dr.
Miller, as to which he has investment power but no voting power.
6
o Mr. Jerry Miller--3,787,209 shares held in an estate planning trust
for the benefit of Mr. Miller, as to which Mr. Miller has shared
voting and investment power.
o Mr. Charles Niemier--21,866 shares owned of record by Mr. Niemier's
wife and 30,573 shares held in an IRA for her benefit, as to which Mr.
Niemier has no voting or investment power and disclaims beneficial
ownership; 71,082 shares held in an IRA for Mr. Niemier's benefit, as
to which he has investment power but no voting power; and 300,348
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.
o Mr. Niles Noblitt--2,255,109 shares owned of record by Mr. Noblitt's
wife, as to which Mr. Noblitt holds no voting or investment power and
disclaims beneficial ownership; 20,528 shares owned of record by Mr.
Noblitt's wife as custodian of their children, as to which Mr. Noblitt
has no voting or investment power and disclaims beneficial ownership;
and 20,528 shares owned of record by Mr. Noblitt as custodian for his
children, as to which he has voting and investment power but disclaims
beneficial ownership.
o Other Executive Officers--4,282 shares held in IRA accounts for the
benefit of the spouses of two of these executive officers, as to which
they have no voting or investment power and disclaim beneficial
ownership; and 4,878 shares held in IRA accounts for the benefit of
two of the executive officers, as to which they have 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 power for the shares held in
their accounts in the 401(k) plan. They have sole investment power with
respect to any shares purchased through their personal contributions to
their accounts in the 401(k) plan. They have no investment power with
respect to the shares contributed by Biomet to their accounts in the 401(k)
plan.
(4) Reflects the number of shares that could be purchased by the exercise of
options exercisable at August 7, 2003, or within 60 days thereafter.
7
ITEM 1--ELECTION OF DIRECTORS
Biomet's Board of Directors currently has 13 members. 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 four directors in Class II to serve for a three-year term expiring
in 2006, or until their successors are elected and qualified. Class III
Directors and Class I Directors will not be elected at the Annual Meeting and
will continue in office until the Annual Meetings of Shareholders to be held in
2004 and 2005, respectively. The Board of Directors has nominated the persons
named below for election as Class II Directors. The name, age, business
background and tenure as a director of 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 four 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 proxy card will be voted FOR the nominees named.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES BELOW.
DIRECTORS STANDING FOR ELECTION
NAME, AGE AND BUSINESS EXPERIENCE
CLASS II: FOR A THREE-YEAR TERM EXPIRING AT THE 2006 ANNUAL MEETING OF
SHAREHOLDERS
JERRY L. FERGUSON, age 62 ................................. Director since 1978
Member: Executive Committee. Mr. Ferguson is one of the four founders of Biomet
and is the Vice Chairman of the Board.
DANIEL P. HANN, age 48 .................................... Director since 1989
Mr. Hann has served as the Senior Vice President, General Counsel and Secretary
of Biomet since June 1999. Prior to 1999, he was Vice President, General Counsel
and Secretary of Biomet.
THOMAS F. KEARNS, JR., age 66 ............................. Director since 1983
Mr. Kearns is a retired partner of Bear, Stearns & Co., Inc. (investment banking
firm). Mr. Kearns is a trustee of the University of North Carolina Foundation, a
director of Fibrogen Corporation (biotechnology company) and a director of the
Omega Institute (non-profit organization).
DANE A. MILLER, PH.D., age 57.............................. Director since 1977
Member: Executive 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), a member of the board
of the University of Chicago Health Systems and serves on the Engineering
Advisory Committee of the University of Cincinnati.
8
DIRECTORS CONTINUING IN OFFICE
NAME, AGE AND BUSINESS EXPERIENCE
CLASS III: TERM EXPIRES AT THE 2004 ANNUAL MEETING OF SHAREHOLDERS
M. RAY HARROFF, age 63...................................... 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).
JERRY L. MILLER, age 57.................................... Director since 1979
Member: Executive, Nominating and Corporate Governance, Compensation and Stock
Option Committees. Mr. Miller is a self-employed attorney, venture capitalist
and a principal in Havirco (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).
CHARLES E. NIEMIER, age 47................................. Director since 1987
Mr. Niemier is the Senior Vice President - International Operations of Biomet.
Mr. Niemier is a trustee of Valparaiso University, a member of the Board of
Directors of Lakeland Financial Corporation (Lake City Bank), and a member of
the Board of Directors of Kosciusko 21st Century Foundation, Inc. (non-profit
organization).
PROF. DR. BERNHARD SCHEUBLE, age 49 ....................... Director since 1998
Prof. Scheuble is Chairman and Chief Executive Officer of Merck KGaA
(pharmaceutical company) and has been CEO Pharma, and a General Partner and
Member of the Executive Board of Merck KGaA since April 1998. Prior to 1998,
Prof. Scheuble was Head of Pharma Ethicals, Merck KGaA. Prof. Scheuble is a
director of certain subsidiaries of Merck KGaA.
CLASS I: TERM EXPIRES AT THE 2005 ANNUAL MEETING OF SHAREHOLDERS
C. SCOTT HARRISON, M.D., age 66............................ Director since 1994
Member: Executive, Nominating and Corporate Governance, Audit and Compensation
Committees. Dr. Harrison is the founder, President and Chief Executive Officer
of CURE International (non-profit organization).
KENNETH V. MILLER, age 55.................................. Director since 1979
Member: Executive, Nominating and Corporate Governance, Audit, Compensation and
Stock Option Committees. Mr. Miller is a self-employed attorney, venture
capitalist and a principal in Havirco (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.
NILES L. NOBLITT, age 52................................... 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.
MARILYN TUCKER QUAYLE, age 54.............................. Director since 1993
Ms. Quayle is a director and President of BTC, Inc., a private investment
holding company and a director of booksfree.com. Prior to 2001, she was also an
attorney engaged in private practice as a partner in the Indianapolis, Indiana
law firm of Krieg, DeVault, Alexander & Capehart.
L. GENE TANNER, age 70 .................................... 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.
9
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
HOW OFTEN DID THE BOARD MEET DURING FISCAL YEAR 2003?
The Board of Directors met four times during fiscal year 2003. Each director
attended at least 75% of the total number of meetings of the Board and
committees on which he or she served during fiscal year 2003.
BOARD COMMITTEE MEMBERSHIP
Nominating
and Corporate
Executive Audit Governance Compensation Stock Option
Name Committee Committee Committee Committee Committee
---- --------- --------- ------------- ------------ ------------
Jerry L. Ferguson X
Daniel P. Hann
C. Scott Harrison, M.D. X X X X
M. Ray Harroff
Thomas F. Kearns
Dane A. Miller, Ph.D. 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
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 2003.
The function of the AUDIT COMMITTEE is to assist the Board of Directors in
fulfilling its oversight responsibilities as they relate to Biomet's accounting
policies, internal controls and financial reporting practices. The Audit
Committee fulfills this responsibility by reviewing the financial reporting
process, the systems of internal control, the audit process and Biomet's process
for monitoring compliance with laws and regulations and with its code of
conduct. The Audit Committee also establishes policies and makes recommendations
to the Board of Directors with respect to the approval of transactions between
Biomet and its directors, officers and employees; reviews and approves any
related-party transactions; appoints Biomet's independent accountants; and
reviews Biomet's compliance with applicable laws, regulations and internal
procedures. A more detailed discussion of the organization and roles and
responsibilities of the Audit Committee is contained in its Charter attached to
this Proxy Statement as Appendix A. The Audit Committee met ten times during
fiscal year 2003.
The NOMINATING AND CORPORATE GOVERNANCE 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
and Corporate Governance Committee will
10
consider for nomination as directors persons recommended by shareholders
provided that such recommendations are in writing and delivered to: Attn:
Secretary, Biomet, Inc., P.O. Box 587, Warsaw IN 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 and Corporate Governance Committee is also
responsible for recommending to the Board the director nominees for each
committee of the Board; providing oversight of the corporate governance affairs
of the Board and Biomet; and assisting in the evaluation of the Board, its
committees and the individual directors. A more detailed discussion of the
purpose, composition and duties and responsibilities of the Nominating and
Corporate Governance Committee is contained in its Charter attached to this
Proxy Statement as Appendix B. The Nominating and Corporate Governance Committee
met once during fiscal year 2003.
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 2003.
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, automatically 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 four times during fiscal year 2003.
COMPENSATION OF DIRECTORS
Fees are paid to Biomet's Board of Directors and its committee members as
follows:
Annual retainer for non-employee directors .............................................................. $19,000*
Annual retainer for non-employee members of the Executive Committee ...................................... $19,000
Annual retainer for non-employee members of the Audit Committee .......................................... $19,000
Meeting attendance fee for non-employee directors and non-employee members
of committees (except meetings of the Audit Compensation, and Nominating and
Corporate Governance Committees held in conjunction with a meeting of the Board
of Directors, and meetings of the Stock Option Committee, for which no meeting fee is paid) ........... $ 1,200
Meeting fee for telephonic participation by non-employee directors and non-employee
members of committees (except meetings of the Audit, Compensation, and Nominating
and Corporate Governance Committees held in conjunction with a meeting of the Board
of Directors, and meetings of the Stock Option Committee, for which no meeting
fee is paid) .......................................................................................... $ 500
Board meeting attendance fee for employee directors ..................................................... $ 750
Board meeting fee for telephonic participation by employee directors..................................... $ 375
*Directors who are not employees receive one-half of their annual retainer in
the form of Common Shares of Biomet, which are held in trust by Biomet until
such Director's retirement from the Board of Directors. In addition, Biomet
reimburses each director for his or her travel expenses for attending meetings
of the Board of Directors and its committees.
11
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 Biomet, Inc. 1998 Qualified and
Non-Qualified Stock Option Plan ("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 2003, the Compensation Committee was comprised of C. Scott
Harrison, M.D.; Jerry L. Miller and Kenneth V. Miller. None of the members of
the Compensation Committee is now serving or previously has served as an officer
of Biomet or any of its subsidiaries. None of Biomet's executive officers serves
as a director of, or in any compensation-related capacity for, other companies
with which members of Biomet's Compensation Committee are affiliated.
EXECUTIVE COMPENSATION
GENERAL
The following Summary Compensation Table sets forth, for the three years ended
May 31, 2003, 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, 2003.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL INCENTIVE
COMPENSATION AWARDS
FISCAL YEAR ------------------ ---------------- ALL OTHER
NAME AND PRINCIPAL POSITION ENDED MAY 31 SALARY BONUS STOCK OPTIONS(#) COMPENSATION(1)
--------------------------- ------------ ------- ------ ---------------- ---------------
Dane A. Miller, Ph.D. 2003 $284,000 $245,000 -- $16,900
President and 2002 264,300 230,000 -- 16,875
Chief Executive Officer 2001 244,700 207,000 -- 14,850
Niles L. Noblitt 2003 $284,000 $245,000 -- $16,900
Chairman of the Board 2002 273,800 230,000 -- 16,875
2001 243,000 210,000 -- 14,850
Garry L. England 2003 $264,100 $220,000 4,000 $13,900
Senior Vice President -- 2002 246,700 209,000 15,000 13,500
Warsaw Operations 2001 227,200 175,000 7,500 11,475
Charles E. Niemier 2003 $281,800 $198,000 4,000 $16,900
Senior Vice President -- 2002 262,100 167,000 15,000 16,875
International Operations 2001 242,600 170,000 7,500 14,850
James R. Pastena 2003 $290,000 $189,000 4,000 $13,900
Vice President of Biomet 2002 279,700 199,500 15,000 13,500
and President of EBI, L.P. 2001 248,900 175,000 15,000 11,475
(1) Represents the value of Biomet's contribution to the Employee Stock Bonus
Plan ($6,400, $6,000 and $5,100 for each of the named executives during 2003,
2002 and 2001, respectively), Biomet's contribution to the 401(k) Plan ($7,500,
$7,500 and $6,375 for each of the named executives during 2003, 2002 and 2001,
respectively) and director meeting attendance fees ($3,000, $3,375 and $3,375
paid to Dr. Miller, Mr. Noblitt and Mr. Niemier during 2003, 2002 and 2001,
respectively).
12
STOCK OPTIONS
Options were granted in fiscal year 2003 to the following executive officers
named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL
SECURITIES PERCENT OF TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED EXERCISE APPRECIATION FOR OPTION TERM(2)
OPTIONS GRANTED(1) TO EMPLOYEES IN PRICE EXPIRATION --------------------------------
NAME (#) FISCAL YEAR 2003 ($/SH) DATE 5% ($) 10% ($)
---- ------------------ ---------------- -------- ------------ ------------- ------------
Garry L. England 4,000 0.2% $24.00 July 17, 2007 $26,523 $58,609
Charles E. Niemier 4,000 0.2% $24.00 July 17, 2007 $26,523 $58,609
James R. Pastena 4,000 0.2% $24.00 July 17, 2007 $26,523 $58,609
(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 three years 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.
(2) The dollar amounts shown in these columns are the result of calculations at
the 5% and 10% appreciation rates set by the Securities and Exchange Commission
and are not intended to forecast the actual appreciation, if any, of Biomet's
stock price. Biomet did not use an alternate formula to determine potential
realizable value because it is not aware of any formula that is able to
determine with reasonable accuracy the potential realizable value based on
future unknown or volatile factors.
13
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 2003 by
Biomet's executive officers named in the Summary Compensation Table. Dr. Miller
and Mr. Noblitt have never received stock options from Biomet.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
NUMBER OF NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE AT MAY 31, 2003 OPTIONS AT MAY 31, 2003(2)
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ---------------- ----------- ----------- ------------- ----------- -------------
Garry L. England 25,032 $567,632 15,375 33,625 $262,133 $196,348
Charles E. Niemier 38,531 $768,758 26,906 33,625 $497,167 $196,348
James R. Pastena 51,232 $990,889 17,835 48,250 $230,203 $355,928
(1) An individual, upon exercise of an option, does not receive cash equal to
the amount contained in the Value Realized column of this table. Instead, the
"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. No
cash is received until or unless the shares received upon exercise of an option
are sold.
(2) Represents the difference between the base (or exercise) price of the option
shares and a market price of $27.37, the closing price of the Common Shares
reported by The Nasdaq National Market on May 31, 2003.
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 team
members, 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 decisions of the Board as to his compensation
package. The President and Chief Executive Officer is not a member of the
Compensation Committee. He is a member of the Stock Option Committee, but does
not participate in the Biomet stock option program and has never received a
stock option from Biomet.
WHAT IS BIOMET'S PHILOSOPHY OF EXECUTIVE OFFICER COMPENSATION?
Biomet's current executive compensation policies and practices reflect the
compensation philosophies of Biomet's founders. Biomet is committed to
maximizing shareholder value through performance. The Committee believes that an
essential element to reaching that goal is the superior performance of Biomet's
executive officers and management team. Biomet's practices and policies are
designed to help achieve this objective by accomplishing the following goals:
o Attracting, retaining and rewarding highly-qualified and productive
persons.
o Relating compensation to both company and individual performance.
o Establishing compensation levels that are internally equitable and
externally competitive.
o Encouraging an ownership interest and instilling a sense of pride in
Biomet, consistent with the interests of Biomet's shareholders.
14
The Committee firmly believes that all team members play a critical role in
Biomet's success and, therefore, all team members are eligible to participate in
Biomet's cash and equity compensation plans. The Committee continues to believe
in one of Biomet's founding philosophies: 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:
o base salary
o incentive bonuses
o stock options
o 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 2003, the base salary of the executive officers as a group increased
approximately 7%.
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 potential 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 and working capital management
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 at least 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.
15
BENEFIT PLANS. The executive officers may also participate in Biomet's 401(k)
Plan and the Employee Stock Bonus Plan ("ESBP"). All team members residing in
the United States who are at least 18 years of age and complete at least 90 days
of service or 1,000 hours per year are also eligible to participate in both
plans. With respect to the 401(k) Plan, 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) Plan 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) Plan 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. Historically, Biomet has made contributions to the ESBP equal to
3% of each team member's annual salary, up to the maximum amount permitted by
applicable Internal Revenue Service regulations. 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.
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 Compensation Committee and approved by the
Board of Directors. Dr. Miller is not a member of the Compensation Committee and
does not participate in decisions of the Board of Directors with respect to his
compensation. 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 of 17% and 20% in Biomet's net
sales, and net income, respectively, for fiscal year 2003, the total
compensation paid to Dr. Miller increased approximately 7% during fiscal year
2003.
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,
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Kenneth V. Miller, Chairman Kenneth V. Miller, Chairman
C. Scott Harrison, M.D. Dane A. Miller, Ph.D.
Jerry L. Miller Jerry L. Miller
Niles L. Noblitt
16
REPORT OF AUDIT COMMITTEE
The primary function of the Audit Committee, as stated in its written charter
adopted by the Board of Directors (attached to this Proxy Statement as Appendix
A), is to assist the Board of Directors in fulfilling its oversight
responsibilities as they relate to Biomet's accounting policies, internal
controls and financial reporting practices. The Audit Committee fulfills this
responsibility by reviewing the financial reporting process, the systems of
internal control, the audit process and Biomet's process for monitoring
compliance with laws and regulations and with its code of conduct. In performing
its duties, the Audit Committee will maintain effective working relationships
with the Board of Directors, management, the internal audit department and the
independent accountants. To effectively perform his role, each committee member
will obtain an understanding of the detailed responsibilities of committee
membership as well as Biomet's business, operations and risks. Members of the
Audit Committee are independent non-executive directors and fall within the
definition of "independent director" as set forth by the current Nasdaq Market
Rules.
The Audit Committee fulfills its responsibilities through periodic meetings with
Biomet's independent accountants, internal auditors and members of Biomet's
management. During fiscal year 2003, the Audit Committee met ten times. In
addition, the chairman of the Audit Committee, as a representative of the Audit
Committee, discussed the interim financial information contained in each
quarterly earnings announcement with management prior to public release.
The Audit Committee has discussed the quality and adequacy of Biomet's internal
controls with management, the internal auditors and the independent accountants.
The Audit Committee has considered and reviewed with the internal auditors and
independent accountants their audit plans, the scope of the audit, the
identification of audit risks and the results of the internal audit
examinations. The Audit Committee has adopted an Audit and Non-Audit Services
Pre-Approval Policy.
The Audit Committee has reviewed Biomet's audited financial statements for the
fiscal year ended May 31, 2003, and discussed them with management and Biomet's
independent accountants. Management has the responsibility for the preparation
and integrity of Biomet's financial statements and the independent accountants
have the responsibility for the examination of those statements. The Audit
Committee's review included discussion with the independent accountants of
matters required to be discussed pursuant to Statement on Auditing Standards No.
61 (Communication With Audit Committees).
The Audit Committee has received and reviewed written disclosures and a letter
from the independent accountants required by the Independence Standards Board
Standard No. 1, entitled "Independence Discussions with Audit Committees," as
amended to date, and has discussed with the independent accountants their
independence from management. The Audit Committee has determined that the
provision of non-audit services to Biomet during the most recently ended fiscal
year by the independent accountants is compatible with maintaining their
independence.
Based upon the review of the financial statements and discussions with
management and the independent accountants, the Audit Committee recommended to
the Board that Biomet's audited financial statements be included in its Annual
Report on Form 10-K for the fiscal year ended May 31, 2003 for filing with the
Securities and Exchange Commission.
The Audit Committee has selected Ernst & Young LLP as the independent
accountants for Biomet's fiscal year 2004.
17
During fiscal year 2003, the Audit Committee reviewed all transactions between
Biomet and its executive officers. The Audit Committee believes the terms of
these transactions are no less favorable to Biomet than would have been
available in the absence of the relationship with the executive officer.
It is not the duty of the Audit Committee to plan or conduct audits or to
determine that Biomet's financial statements are complete and accurate and in
accordance with accounting principles generally accepted in the United States.
Those responsibilities belong to management and Biomet's independent
accountants. In giving its recommendations to the Board of Directors, the Audit
Committee has relied on (a) management's representation that such financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States, and (b) the
report of Biomet's independent accountants with respect to such financial
statements.
Respectfully submitted,
Kenneth V. Miller, Chairman
C. Scott Harrison, M.D.
L. Gene Tanner
18
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on Biomet's
Common Shares with the cumulative total return of Standard & Poor's 500 Stock
Index ("S&P 500 Index") and Standard & Poor's Health Care Equipment Index ("S&P
Health Care Index") for the five most recent fiscal years ended May 31. The
comparison assumes $100 invested on May 31, 1998, and the reinvestment of
dividends, in Biomet's Common Shares and in each of the indices.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG COMMON SHARES OF BIOMET, INC., THE S&P 500 INDEX
AND THE S&P HEALTH CARE INDEX
(GRAPH)
INDEXED RETURNS
YEARS ENDING
BASE PERIOD
COMPANY/INDEX 5/31/98 5/31/99 5/31/00 5/31/01 5/31/02 5/31/03
------------- ------------ ------- ------- ------- ------- -------
Biomet, Inc. $100 $138.84 $125.85 $234.68 $223.08 $218.23
S&P 500 Index 100 121.03 133.71 119.59 103.03 94.73
S&P Health Care Index 100 123.89 138.20 136.11 147.89 153.48
19
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 $42,135, plus sales tax, to that corporation for the use of
the aircraft. During the last fiscal year, Biomet made payments to that
corporation of approximately $503,235 in rental fees and scheduled maintenance
on the aircraft. The Audit Committee of the Board of Directors has reviewed this
relationship and 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 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 2003, three of Biomet's executive officers did not timely
report changes in ownership of Biomet Common Shares. Bareld J. Doedens failed to
timely report the exercise of two stock options and resulting acquisition of
shares, including the open market sale of shares to cover the cost of exercise
on March 3, 2003. This transaction was included in the Form 5 Annual Statement
of Beneficial Ownership of Securities filed by Mr. Doedens. James W. Haller
failed to timely report the receipt of a stock option award from Biomet on
November 19, 2002. This stock option award was reported on January 7, 2003.
Gregory D. Hartman failed to timely report the exercise of three stock options
and the resulting acquisition of shares on April 17, 2003. This transaction was
included in the Form 5 Annual Statement of Beneficial Ownership of Securities
filed by Mr. Hartman.
Other than the transactions noted above, to Biomet's knowledge, based solely on
the 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, 2003.
20
ITEM 2--RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Audit Committee has selected the firm of Ernst & Young LLP ("Ernst &
Young"), independent certified public accountants, to serve as independent
accountants for the year ending May 31, 2004. The Board of Directors has
determined that it would be desirable to request that the shareholders ratify
such selection. As discussed below, Ernst & Young has served as the Company's
independent accountants since October 2001. Biomet has been advised by Ernst &
Young that neither it nor any of its associates has any direct or material
indirect financial interest in Biomet.
PricewaterhouseCoopers LLP ("PWC") served as independent public accountants for
Biomet for the fiscal year ended May 31, 2001. In June 2001 PWC advised Biomet
that it was closing its office in South Bend, Indiana that had served the
Company since 1980. Upon receipt of this advice, Biomet's Audit Committee and
members of management interviewed several accounting firms, including PWC. On
October 29, 2001, the Board of Directors of the Company, on the recommendation
of the Audit Committee, approved the dismissal of PWC and the appointment of
Ernst & Young as Biomet's independent accountants for the year ended May 31,
2002. The Audit Committee has also selected Ernst & Young as Biomet's
independent accountants for the year ended May 31, 2003.
The reports of PWC on Biomet's financial statements for the year ended May 31,
2001 did not contain any adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of Biomet's financial statements for the year
ended May 31, 2001 and through October 29, 2001, there were no disagreements
with PWC on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which disagreements, if
not resolved to the satisfaction of PWC, would have caused them to make
reference thereto in their reports on the financial statements for such year.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting. They will have the opportunity to make a statement, if they desire to
do so, and are expected to be available to respond to appropriate questions
concerning the audit for the fiscal year ended May 31, 2003.
21
INDEPENDENT AUDITOR FEE INFORMATION
Fees for professional services provided by our independent accountants in each
of the last two fiscal years, in each of the following categories are:
2003 2002
---------- ----------
Audit Fees $1,166,291 $ 519,404
Audit-Related Fees 84,763 57,934
Tax Fees 95,052 8,180
All Other Fees 113,127 10,000
---------- ----------
$1,459,233 $ 595,518
---------- ----------
Fees for audit services include fees associated with the annual audit, the
reviews of Biomet's quarterly reports on Form 10-Q and statutory audits required
internationally. Audit-related fees principally included due diligence in
connection with acquisitions, accounting consultation, and benefit plan audits.
Tax fees included tax compliance, tax advice and tax planning, including
expatriate tax services.
All other fees principally include support and advisory services related to
Biomet's expatriate program, benefit plans and real estate activities.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement is incorporated by reference into any
other filing by Biomet under the Securities Act of 1933 or the Securities
Exchange Act of 1934, the sections of this Proxy Statement entitled "Report of
Audit Committee," "Report of the Compensation and Stock Option Committees" (to
the extent permitted by the rules of the SEC) and "Performance Graph," as well
as the exhibits to this Proxy Statement, will not be deemed incorporated, unless
specifically provided otherwise in such filing.
22
INFORMATION REGARDING SHAREHOLDER PROPOSALS
FOR THE 2004 ANNUAL MEETING
If you wish to submit a shareholder proposal pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934 to be included in the proxy materials for
Biomet's Annual Meeting for the fiscal year ended May 31, 2004, you should
submit your proposal in writing to the Secretary of Biomet, P.O. Box 587,
Warsaw, Indiana 46581-0587, no later than April 24, 2004.
Biomet's Bylaws establish an advance notice procedure with regard to shareholder
nominations of directors. If you wish to submit director nominees for
consideration by the shareholders at Biomet's 2004 Annual Meeting, you must
provide a written notice to the Secretary of Biomet, P.O. Box 587, Warsaw,
Indiana 46581-0587. Such written notice must be delivered to, or mailed and
received at, such address not less than 60 days nor more than 90 days prior to
next year's Annual Meeting. 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 the business on the tenth day following the day on which
such notice of the date of the Annual Meeting was mailed or such public
disclosure was made. Such written notice must also contain specified information
concerning the persons to be nominated and concerning the shareholder making
such nominations. You may obtain a copy of Biomet's Bylaws from the Secretary of
Biomet.
If you notify Biomet after July 8, 2004 of an intent to present a proposal at
Biomet's 2004 Annual Meeting, Biomet's proxy holders will have the right to
exercise discretionary voting authority with respect to such proposal, if
presented at the meeting, without including information regarding such proposal
in Biomet's proxy materials.
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 July 6, 2003 (45 days prior to August 20, the first date of
mailing of proxy materials for last year's 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
August 14, 2003
23
APPENDIX A
BIOMET, INC. AUDIT COMMITTEE CHARTER
(ADOPTED JUNE 27, 2003)
MISSION STATEMENT
The Audit Committee (the "Committee") will assist the Board of Directors in
fulfilling its oversight responsibilities. The Audit Committee will review the
financial reporting process, the systems of internal controls, the audit
process, and the Company's process for monitoring compliance with laws and
regulations and with the code of conduct. In performing its duties, the
Committee will maintain effective working relationships with the Board of
Directors, management, and the internal and external auditors. To effectively
perform his or her role, each Committee member will obtain an understanding of
the detailed responsibilities of Committee membership as well as the Company's
business, operations and risks.
ORGANIZATION
o Audit Committee members shall meet the requirements established and updated
by the NASDAQ Exchange.
o The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent non-executive
directors, in accordance with the rules and regulations of the Securities
and Exchange Commission and the NASDAQ listing standards, free from any
relationship that would interfere with the exercise of his or her
independent judgment.
o All members of the Committee shall have a basic understanding of finance
and accounting and be able to read and understand fundamental financial
statements.
o Audit Committee members shall be appointed by the Board on recommendation
of the Nominating Committee.
o If an Audit Committee chair is not designated or present, the members of
the Committee may designate a Chair by majority vote of the Committee
membership.
o The Committee shall convene at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The Committee
should meet privately in executive session at least annually with
management, the director of the internal auditing department, the external
auditors, and as a committee to discuss any matters that the Committee or
each of these groups believe should be discussed. In addition, the
Committee, or at least its Chair, should communicate with management and
the external auditors quarterly to review the Company's financial
statements and significant findings based upon the auditors' limited review
procedures.
A-1
ROLES AND RESPONSIBILITIES
Internal Control
o Evaluate whether management is setting the appropriate tone at the top by
communicating the importance of internal control and ensuring that all
individuals possess an understanding of their roles and responsibilities.
o Focus on the extent to which internal and external auditors review computer
systems and applications, the security of such systems and applications,
and the contingency plan for processing financial information in the event
of a system breakdown;
o Gain an understanding of whether internal control recommendations made by
internal and external auditors have been implemented by management; and
o Ensure that the external and internal auditors keep the Audit Committee
informed about fraud, illegal acts, deficiencies in internal control, and
certain other matters.
FINANCIAL REPORTING
GENERAL
o Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements, and understand their impact on
the financial statements; and
o Ask management and the internal and external auditors about significant
risks and exposures and the plans to minimize such risks.
o Establish and maintain procedures for the confidential and anonymous
receipt, retention and treatment of complaints regarding the Company's
accounting, internal controls or auditing matters and establish clear
hiring policies for employees or former employees of the Company's outside
auditor.
o Obtain the advice and assistance, as appropriate, of independent counsel
and other advisors as necessary to fulfill the responsibilities of the
Audit Committee.
o Report regularly to the Board of Directors as to the Audit Committee's
accomplishments of its purposes and responsibilities.
o Conduct an annual performance evaluation of the Audit Committee.
ANNUAL FINANCIAL STATEMENTS
o Review the annual financial statements and determine whether they are
complete and consistent with the information known to committee members and
assess whether the financial statements reflect appropriate accounting
principles;
o Pay particular attention to complex and/or unusual transactions such as
restructuring charges and derivative disclosures;
o Focus on judgmental areas such as those involving valuation of assets and
liabilities, including, for example, the accounting for and disclosure of
obsolete or slow-moving inventory; loan losses; warranty, product and
environmental liability; litigation reserves; and other commitments and
contingencies;
A-2
o Meet with management and the external auditors to review the financial
statements and the results of the audit;
o Consider management's handling of proposed audit adjustments identified by
the external auditors;
o Review the MD&A and other sections of the Annual Report before its release
and consider whether the information is adequate and consistent with
members' knowledge about the Company and its operations; and
o Ensure that the external auditors communicate certain required matters to
the committee.
INTERIM FINANCIAL STATEMENTS
o Review earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies and discuss
Company policies with respect to risk assessment and risk management.
o Be briefed on how management develops and summarizes quarterly financial
information, the extent of internal audit involvement and the extent to
which the external auditors review quarterly financial information;
o Meet with management and with the external auditors, either telephonically
or in person, to review the interim financial statements and the results of
the review. (This may be done by the Committee chairperson or the entire
Committee);
o To gain insight into the fairness of the interim statements and
disclosures, including the Company's disclosures under "Management's
Discussion and Analysis of Financial Conditions and Results of Operations,"
obtain explanations from management and from the internal and external
auditors on whether:
o Actual financial results for the quarter or interim period varied
significantly from budgeted or projected results;
o Changes in financial ratios and relationships in the interim
financial statements are consistent with changes in the company's
operations and financing practices;
o Generally accepted accounting principles have been consistently
applied;
o There are any actual or proposed changes in accounting or
financial reporting practices;
o There are any significant or unusual events or transactions;
o The Company's financial and operating controls are functioning
effectively;
o The Company has complied with the terms of loan agreements or
security indentures; and
o The interim financial statements contain adequate and appropriate
disclosures.
o Ensure that the external auditors communicate certain required matters to
the committee.
A-3
COMPLIANCE WITH LAWS AND REGULATIONS
o Review the effectiveness of the system for monitoring compliance with laws
and regulations and the results of management's investigation and follow-up
(including disciplinary action) on any fraudulent acts or accounting
irregularities;
o Periodically obtain updates from management, general counsel and tax
director regarding compliance;
o Be satisfied that all regulatory compliance matters have been considered in
the preparation of the financial statements; and
o Review the findings of any examinations by regulatory agencies such as the
Securities and Exchange Commission.
COMPLIANCE WITH CODE OF CONDUCT
o Ensure that a code of conduct is formalized in writing and that all
employees are aware of it;
o Evaluate whether management is setting the appropriate tone at the top by
communicating the importance of the code of conduct and the guidelines for
acceptable business practices;
o Review the program for monitoring compliance with the code of conduct; and
o Periodically obtain updates from management and general counsel regarding
compliance.
INTERNAL AUDIT
o Review, at least annually, the then-current and future programs of the
Company's Internal Audit Department, including the procedure for assuring
implementation of accepted recommendations made by the internal auditors;
and review any issues that arise regarding the performance of the Company's
internal audit function and the significant matters contained in these
Internal Audit Department reports;
o Review the qualifications of the internal audit function and concur in the
appointment, replacement, reassignment or dismissal of the director of
internal audit; and
o Review the effectiveness of the internal audit function.
EXTERNAL AUDIT
o Appoint the public accounting firm for the purpose of preparing or issuing
an audit report or to perform related work and set their compensation.
o Preapprove all audit and permitted non-audit services to be performed by
the public accounting firm; or delegate the authority to preapprove such
services to one or more members of the Audit Committee, who shall report
any decision to preapprove any services to the full Audit Committee at its
regularly scheduled meetings.
o Report the preapproval of any permitted non-audit services to management
for disclosure in the Company's periodic reports.
o Review with members of the public accounting firm selected by the Audit
Committee as outside auditors for the Company the scope of the prospective
audit, the estimated fees therefor and such other matters pertaining to
such audit as the Audit Committee may deem appropriate.
A-4
o Receive and review:
(a) a report by the external auditor describing (i) the external
auditor's internal quality control procedures; (ii) any material
issues raised by the most recent internal quality control review,
or peer review, of the firm, or by any inquiry or investigation
by governmental or professional authorities, within the preceding
five years, respecting one or more independent audits carried out
by the firm, and any steps taken to deal with any such issues;
and (iii) in an effort to assess the auditors' independence, all
relationships between the auditors and the Company; and
(b) all other reports from the external auditors, including the
annual comments from the external auditors on accounting
procedures and systems of control;
o Review and consider whether the provision by the external auditors of any
permitted non-audit services is compatible with maintaining their
independence; review and approve the non-audit fees of the external
auditors; and review with them any questions, comments or suggestions they
may have relating to the internal controls, accounting practices or
procedures of the Company or its subsidiaries, and any audit problems or
difficulties and management's response.
o Receive from the external auditors the report required by Independence
Standards Board Standard No. 1 as in effect at that time and discuss it
with the external auditors.
OTHER RESPONSIBILITIES
o Review, with the company's counsel, any legal matters that could have a
significant impact on the company's financial statements;
o Review the policies and procedures in effect for considering officers'
expenses and perquisites;
o If necessary, institute special investigations and, if appropriate, hire
special counsel or experts to assist;
o Perform other oversight functions as requested by the full Board; and
o Review and update the charter; receive approval of changes from the Board.
A-5
APPENDIX B
BIOMET, INC.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
(ADOPTED JUNE 27, 2003)
PURPOSE
The Corporate Governance and Nominating Committee (the "Committee") is a
standing committee appointed by the Board of Directors (the "Board") of Biomet,
Inc. (the "Company") for the following purposes:
o To establish eligibility criteria and procedures for identifying potential
nominees to the Board;
o To receive and review recommendations for director nominations;
o To recommend to the Board nominees for director for the next Annual Meeting
of the Company's Shareholders;
o To recommend to the Board the director nominees for each committee of the
Board;
o To consider for recommendation to the Board the Corporate Governance
Principles applicable to the Company;
o To provide oversight of the corporate governance affairs of the Board and
the Company; and
o To assist in the evaluation of the Board, its committees and the individual
directors.
MEMBERSHIP
The Committee shall consist of not less than three directors all of whom, in the
judgment of the Board of Directors, shall be independent in accordance with the
NASDAQ Stock Exchange listing standards and as determined in the business
judgment of the Board. Committee members shall be appointed for three-year terms
at the Annual Meeting of the Board of Directors and shall serve until a
replacement for each member is duly elected and qualified or until such member's
resignation or removal from the Board or the Committee. The members of the
Committee may be removed, with or without cause, by a majority vote of the
Board. The Chairman of the Committee shall be designated by the members of the
Committee. The Committee may form and delegate authority to subcommittees in
compliance with applicable law when deemed appropriate by the Committee. The
Committee shall meet at least once annually, or more frequently as circumstances
dictate.
B-1
DUTIES AND RESPONSIBILITIES
To fulfill its purpose, the Committee, acting in conjunction with the Chairman
of the Board and Chief Executive Officer at such times as the Committee deems
appropriate, shall perform the following functions. The Committee has the
authority, as necessary and appropriate, to consult with outside financial,
legal and other advisors to assist in their duties to the Company.
o Criteria for Nomination to the Board. The Committee shall establish and
periodically review the criteria for Board membership which should include,
among other things, experience, appropriate skills and knowledge and the
ability to act on behalf of shareholders;
o Nomination and Training of Directors. With respect to the structure of the
Board, the Committee shall
o periodically consider the size, composition and needs of the
Board;
o consider, recommend and recruit candidates to fill available
positions on the Board;
o review candidates recommended by shareholders, if any;
o conduct the appropriate and necessary inquiries into the
backgrounds and qualifications of possible candidates; and
o recommend the Director nominees for approval by the Board and the
shareholders.
o Conflicts of Interest. The Committee shall consider questions of possible
conflicts of interest of Board members and the Company's executive
officers.
o Committees of the Board. The Committee shall monitor and recommend the
functions and membership of the various committees of the Board. The
Committee shall also consider and recommend to the Board any changes to
committees of the Board and the potential creation and/or dissolution of
committees of the Board.
o Board Compensation. The Committee shall advise the Board regarding changes
in the amount and form of Board compensation.
o Board Administration. The Committee shall make recommendations on the
structure of Board meetings and shall recommend matters for consideration
by the Board.
o Corporate Governance Principles. The Committee shall consider developing a
set of Corporate Governance Principles. If the Committee develops a set of
such principles, it will submit them to the Board for approval. The
Committee shall also consider matters of corporate governance and, if
established, periodically review the Company's adherence to the Corporate
Governance Principles.
o Shareholder Interests. The Committee shall periodically review the
Company's Shareholder Rights Plan and shall recommend and review the share
ownership expectations of the Board members and senior officers of the
Company.
o Succession Planning. The Committee shall consider Director retirement
policies. The Committee shall periodically review with the Chairman of the
Board and Chief Executive Officer the succession plans relating to
positions held by the Company's executive officers.
o Board and Committee Evaluation Process. The Committee shall develop and
recommend to the Board a periodic performance process for the Board, its
members and each of its committees.
B-2
o Self Evaluation. The Committee shall perform a periodic, informal
performance evaluation of the Committee. The evaluation shall compare the
performance of the Committee with the requirements of this charter. Upon
the completion of the self evaluation, the Committee shall report its
findings to the Board and may also recommend to the Board any changes to
the Charter and/or function of the Committee it deems necessary or
desirable as a result of the evaluation.
o Evaluation of the Company's Executive Officers. The Committee shall
periodically review with the Chairman of the Board and Chief Executive
Officer the functions and performance of the Company's executive officers
and make recommendations to the Board on any changes the committee deems
necessary or desirable.
B-3
YOUR VOTE IS IMPORTANT.
PLEASE VOTE YOUR PROXY AS SOON AS POSSIBLE.
(BIOMET, INC. LOGO)
(BIOMET INC LOGO) VOTE BY INTERNET - www.proxyvote.com
BIOMET, INC. Use the Internet to transmit your voting
56 E. BELL DRIVE instructions and for electronic delivery
P.O. BOX 587 of information up until 11:59 P.M.
WARSAW, IN 46582 Eastern Time the day before the cut-off
date or meeting date. Have your proxy
card in hand when you access the web
site. You will be prompted to enter your
12-digit Control Number which is located
below to obtain your records and to
create an electronic voting instruction
form.
VOTE BY MAIL
Mark, sign, and date your proxy card and
return it in the postage-paid envelope
we have provided or return it to Biomet,
Inc., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: BIOMET KEEP THIS PORTION FOR YOUR RECORDS
---------------------------------------------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
BIOMET, INC.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" MATTERS 1 & 2 BELOW. FOR WITHHOLD FOR ALL To withhold authority to vote, mark "For
ALL ALL EXCEPT All Except" and write the nominee's
ELECTION OF DIRECTORS [ ] [ ] [ ] number on the line below.
1. NOMINEES: 01) JERRY L. FERGUSON ------------------------------------------
02) DANIEL P. HANN
03) THOMAS F. KEARNS, JR.
04) DANE A. MILLER, PH.D.
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
2. RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS [ ] [ ] [ ]
FOR THE COMPANY FOR THE FISCAL YEAR ENDING MAY 31, 2004.
Please sign exactly as your name appears above. When shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
For address changes and/or comments, please
check this box and write them on the back where [ ]
indicated.
Please indicate if you plan to attend this meeting [ ] [ ]
YES NO
--------------------------------------------- ------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
PROXY
BIOMET, INC.
ANNUAL MEETING OF SHAREHOLDERS -- SEPTEMBER 27, 2003 AT 1:30 P.M.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dane A. Miller, Ph.D. and Niles L. Noblitt as
proxies, each with the power to act alone and of substitution, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the Common Shares of the Company that the undersigned is entitled to vote at the
Annual Meeting of Shareholders to be held on Saturday, September 27, 2003, or
any adjournment thereof. With respect to any other matter that properly comes
before the meeting, the proxy holders will vote in their own discretion.
ADDRESS CHANGES/COMMENTS:
------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(If you noted address changes or comments above,
please check the corresponding box on the reverse side.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.