SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant G
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
ENZO BIOCHEM, INC.
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(Name of Registrant as Specified in Its Charter)
N/A
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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.
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(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party: Enzo Biochem, Inc.
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ENZO BIOCHEM, INC.
60 EXECUTIVE BOULEVARD
FARMINGDALE, NEW YORK 11735
(631) 755-5500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 20, 2005
To the Shareholders of Enzo Biochem, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Enzo
Biochem, Inc., a New York corporation (the "Company"), will be held at The Yale
Club of New York, 50 Vanderbilt Avenue, Grand Ballroom, 20th Floor, New York,
New York, on January 20, 2005, at 9:00 a.m. local time (the "Annual Meeting"),
for the following purposes:
1. To elect Barry W. Weiner, John J. Delucca and Melvin F. Lazar as Class
II Directors for a term of three (3) years or until their respective
successors are elected and qualified;
2. To consider and vote upon a proposal to approve and adopt our 2005
Equity Compensation Incentive Plan (which we refer to in the
accompanying proxy statement as the "Equity Compensation Incentive
Plan Proposal");
3. To ratify the appointment of Ernst & Young LLP as the independent
auditors for the Company for the Company's fiscal year ending July 31,
2005; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The close of business on November 24, 2004 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting. The transfer books of the Company will not be closed.
All shareholders are cordially invited to attend the Annual Meeting. Please
note that you will be asked to present valid picture identification, such as a
driver's license or passport, in order to attend the Annual Meeting. The use of
cameras, recording devices and other electronic devices will be prohibited at
the Annual Meeting.
Whether or not you expect to attend, you are requested to sign, date and
return the enclosed proxy promptly. Shareholders who execute proxies retain the
right to revoke them at any time prior to the voting thereof by filing written
notice of such revocation with the Secretary of the Company, by submission of a
duly executed proxy bearing a later date or by voting in person at the Annual
Meeting of Shareholders. Attendance at the Annual Meeting will not in and of
itself constitute revocation of a proxy. Any written notice revoking a proxy
should be sent to Enzo Biochem, Inc., 60 Executive Boulevard, Farmingdale, New
York 11735, Attention: Shahram K. Rabbani, Secretary. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors,
Shahram K. Rabbani, SECRETARY
Farmingdale, New York
November 26, 2004
ENZO BIOCHEM, INC.
60 EXECUTIVE BOULEVARD
FARMINGDALE, NEW YORK 11735
(631) 755-5500
------------------
PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 20, 2005
This Proxy Statement is furnished in connection with the solicitation, by
the Board of Directors of Enzo Biochem, Inc., a New York corporation (the
"Company"), of proxies in the enclosed form for the Annual Meeting of
Shareholders to be held at The Yale Club of New York, 50 Vanderbilt Avenue,
Grand Ballroom, 20th Floor, New York, New York, on January 20, 2005 at 9:00 a.m.
local time (the "Annual Meeting"), and for any adjournment or adjournments
thereof, for the purposes set forth in the preceding Notice of Annual Meeting of
Shareholders. The form of proxy solicited by the Board of Directors affords
stockholders the ability to specify a choice among approval of, disapproval of,
or abstention with respect to, each matter acted upon at the Annual Meeting. The
persons named in the enclosed form of proxy will vote the shares for which they
are appointed in accordance with the directions of the shareholders appointing
them. In the absence of such directions, such shares will be voted FOR Proposals
1, 2 and 3 listed below and, in their best judgment, will be voted on any other
matters as may come before the Annual Meeting. Any shareholder giving a proxy
has the power to revoke the same at any time before it is voted by filing
written notice of such revocation with the Secretary of the Company, by
submission of a duly executed proxy bearing a later date or by voting in person
at the Annual Meeting. Attendance at the Annual Meeting will not in and of
itself constitute revocation of a proxy. Any written notice revoking a proxy
should be sent to Enzo Biochem, Inc., 60 Executive Boulevard, Farmingdale, New
York 11735, Attn.: Shahram K. Rabbani, Secretary. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
The expense of the solicitation of proxies for the meeting, including the
cost of mailing, will be borne by the Company. In addition to mailing copies of
the enclosed proxy materials to stockholders, the Company may request persons,
and reimburse them for their expenses with respect thereto, who hold stock in
their names or custody or in the names of nominees for others, to forward copies
of such materials to those persons for whom they hold stock of the Company and
to request authority for the execution of the proxies. In addition to the
solicitation of proxies by mail, it is expected that some of the officers,
directors and regular employees of the Company, without additional compensation,
may solicit proxies on behalf of the Board of Directors by telephone, telefax,
and personal interview.
The principal executive offices of the Company are located at 60 Executive
Boulevard, Farmingdale, New York 11735. The approximate date on which this Proxy
Statement and the accompanying form of proxy will first be sent or given to the
Company's shareholders is November 26, 2004.
VOTING SECURITIES
Only holders of shares of common stock, par value $.01 per share (the
"Common Stock"), of the Company of record as of the close of business on
November 24, 2004 are entitled to vote at the Annual Meeting (the "Record
Date"). On the Record Date there were issued and outstanding 32,395,401 shares
of Common Stock. Each outstanding share of Common Stock is entitled to one (1)
vote upon all matters to be acted upon at the Annual Meeting. The holders of a
majority of the outstanding shares of Common Stock as of the Record Date shall
constitute a quorum.
The election of a nominee for director requires a plurality (i.e., an
excess of votes over those cast for an opposing candidate) in the event that
more than one candidate is running for a vacancy. An affirmative vote of the
majority of the votes cast is required for approval of Proposal 2, Proposal 3
and all other matters submitted to the shareholders at the Annual Meeting.
Abstentions and broker non-votes are not counted as votes cast on any matter to
which they relate and will have no effect on the outcome of the vote. A broker
non-vote occurs when a broker or other nominee does not have discretionary
authority and has not received instructions with respect to a particular
proposal. Proxy ballots are received and tabulated by the Company's transfer
agent and certified by the inspector of election.
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
Set forth below is information concerning stock ownership of all persons
known by the Company to own beneficially 5% or more of the shares of Common
Stock of the Company, the executive officers named under "Compensation of
Directors and Executive Officers," all directors, and all directors and
executive officers of the Company as a group based upon the number of
outstanding shares of Common Stock as of the close of business on the Record
Date. Except as otherwise indicated, each of the persons named has sole voting
and investment power with respect to the shares shown.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS (2)
------------------- ------------------------ ------------
Elazar Rabbani, Ph.D. ............................ 2,064,792 (3) 6.373%
Shahram K. Rabbani ............................... 1,995,537 (4) 6.16%
Barry W. Weiner .................................. 1,249,775 (5) 3.858%
Dean Engelhardt, Ph.D. ........................... 235,724 (6) *
Norman E. Kelker, Ph.D. .......................... 142,979 (7) *
John J. Delucca .................................. 47,339 (8) *
Irwin C. Gerson .................................. 30,181 (9) *
Melvin F. Lazar, CPA ............................. 45,019 (10) *
John B. Sias ..................................... 168,281 (11) *
Marcus Conant, M.D. .............................. 9,550 (12) *
J. Morton Davis .................................. 3,045,656 (13) 9.5%
Smith Barney Fund Management LLC,
Citigroup Global Markets Holdings, Inc. ........ 3,878,274 (14) 12.1%
All directors and executive officers as
a group (13 persons) (15) ...................... 6,276,384 (16) 18.74%
---------------
* Less than 1%.
(1) Except as otherwise noted, all shares of Common Stock are beneficially
owned and the sole investment and voting power is held by the persons
named, and such persons' address is c/o Enzo Biochem, Inc., 60 Executive
Boulevard, Farmingdale, New York 11735.
(2) Based upon 32,395,401 shares of Common Stock of the Company outstanding as
of the close of business on the Record Date.
(3) Includes (i) 357,203 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof, (ii)
3,469 shares of Common Stock held in the name of Dr. Rabbani as custodian
for certain of his children and (iii) 2,168 shares of Common Stock held in
the name of Dr. Rabbani's wife as custodian for certain of their children.
Does not include 183,143 shares of Common Stock issuable upon the exercise
of options which are not exercisable within 60 days from the date hereof.
Includes 3,141 shares of Common Stock held in the Company's 401(k) plan.
(4) Includes (i) 357,203 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof, (ii) 644
shares of Common Stock held in the name of Mr. Rabbani's son and (iii)
1,754 shares of Common Stock that Mr. Rabbani holds as custodian for
certain of his nephews. Does not include 183,143 shares of Common Stock
issuable upon the exercise of options which are not exercisable within 60
days from the date hereof. Includes 3,106 shares of Common Stock held in
the Company's 401(k) plan.
2
(5) Includes (i) 357,203 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof and (ii)
3,642 shares of Common Stock which Mr. Weiner holds as custodian for
certain of his children. Does not include 183,143 shares of Common Stock
issuable upon the exercise of options which are not exercisable within 60
days from the date hereof. Includes 3,148 shares of Common Stock held in
the Company's 401(k) plan.
(6) Includes 51,683 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 37,840 shares of Common Stock issuable upon the exercise of options
which are not exercisable within 60 days from the date hereof. Includes
3,128 shares of Common Stock held in the Company's 401(k) plan.
(7) Includes 25,731 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 29,669 shares of Common Stock issuable upon the exercise of options
which are not exercisable within 60 days from the date hereof. Includes
3,057 shares of Common Stock held in the Company's 401(k) plan.
(8) Includes 47,339 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 20,485 shares of Common Stock issuable upon the exercise of options
which are not exercisable within 60 days from the date hereof.
(9) Includes 30,181 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 12,009 shares of Common Stock issuable upon the exercise of options
which are not exercisable within 60 days from the date hereof.
(10) Does not include 7,875 shares of Common Stock issuable upon the exercise of
options which are not exercisable within 60 days from the date hereof.
Includes 7,875 shares of Common Stock owned by Mr. Lazar's wife and 3,150
shares of Common Stock held in the name of a defined benefit plan for which
Mr. Lazar is the sole trustee and beneficiary.
(11) Includes 98,622 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 20,485 shares of Common Stock issuable upon the exercise of options
which are not exercisable within 60 days from the date hereof.
(12) Includes 9,550 shares of Common Stock issuable upon the exercise of options
which are exercisable within 60 days from the date hereof. Does not include
16,908 shares of Common Stock issuable upon the exercise of options which
are not exercisable within 60 days from the date hereof.
(13) Mr. Davis' address is D.H. Blair Investment Banking Corp., 44 Wall Street,
New York, New York 10005. Includes (i) 38,545 owned directly by Mr. Davis,
(ii) 1,427,681 shares of Common Stock owned by D.H. Blair Investment
Banking Corp. of which Mr. Davis is the sole shareholder, (iii) 903,201
shares owned by Rosalind Davidowitz, Mr. Davis' wife, (iv) 663,496 shares
of Common Stock owned by Engex, Inc., a close-end registered investment
company of which Mr. Davis is the Chairman of the Board of Directors, and
(v) 12,733 shares owned by an investment advisor whose principal is Mr.
Davis . This information is based solely on Amendment No. 3 to a Schedule
13G filed on February 11, 2004.
(14) The address of Smith Barney is 333 West 34th Street, New York, NY 10036,
and the address of Citigroup Inc. is 399 Park Avenue, New York, New York
10001, the address of Citigroup Global Holdings, Inc. is 388 Greenwich
Street, New York, New York 10001. This information is based solely on
Amendment No. 3 to Schedule 13G filed on August 31, 2004 and adjusted to
reflect a 5% stock dividend paid on November 15, 2004.
(15) The total number of directors and executive officers includes three (3)
executive officers who were not named under "Compensation of Directors and
Executive Officers."
(16) Includes 1,460,138 shares of Common Stock issuable upon the exercise of
options which are exercisable within 60 days from the date hereof. Does not
include 773,666 shares of Common Stock issuable upon the exercise of
options held by such individuals which are not exercisable within 60 days
from the date hereof.
3
PROPOSAL 1
ELECTION OF DIRECTORS
The Company has three (3) staggered classes of Directors, each of which
serves for a term of three (3) years. At the Annual Meeting, the Company's Class
II Directors will be elected to hold office for a term of three (3) years or
until their respective successors are elected and qualified. Unless otherwise
instructed, the accompanying form of proxy will be voted for the election of the
below-listed nominees all of whom currently serve as Class II Directors, to
continue such service as Class II Directors. Management has no reason to believe
that any of the nominees will not be a candidate or will be unable to serve as a
director. However, in the event that the nominees should become unable or
unwilling to serve as directors, the form of proxy will be voted for the
election of such persons as shall be designated by the Class I and Class III
Directors.
CLASS II DIRECTOR NOMINEES TO SERVE UNTIL
THE 2008 ANNUAL MEETING, IF ELECTED:
CLASS II: NEW TERM TO EXPIRE IN 2008
NAME AGE YEAR FIRST BECAME A DIRECTOR
---- --- ----------------------------
Barry W. Weiner ..................... 54 1977
John J. Delucca ..................... 61 1982
Melvin F. Lazar, CPA ................ 65 2002
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE ABOVE-NAMED NOMINEES. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
SO VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
DIRECTORS WHO ARE CONTINUING IN OFFICE:
CLASS I: TERM TO EXPIRE IN 2007
NAME AGE YEAR FIRST BECAME A DIRECTOR
---- --- ----------------------------
Shahram Rabbani ..................... 52 1976
Irwin C. Gerson ..................... 74 2001
CLASS III: TERM TO EXPIRE IN 2006
NAME AGE YEAR FIRST BECAME A DIRECTOR
---- --- ----------------------------
Elazar Rabbani, Ph.D. ............... 60 1976
John B. Sias ........................ 77 1982
Marcus A. Conant, M.D. .............. 69 2004
4
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are identified in the
table below. Each executive officer of the Company serves at the pleasure of the
Board of Directors.
YEAR BECAME A
DIRECTOR OR
NAME AGE EXECUTIVE OFFICER POSITION
---- --- ----------------- --------
Elazar Rabbani, Ph.D. .................. 60 1976 Chairman of the Board of Directors and
Chief Executive Officer
Shahram K. Rabbani ..................... 52 1976 Chief Operating Officer, Treasurer,
Secretary and Director
Barry W. Weiner ........................ 54 1977 President, Chief Financial Officer and
Director
Dean Engelhardt, Ph.D. ................. 64 1981 Executive Vice President
Norman E. Kelker, Ph.D ................. 65 1981 Senior Vice President
Herbert B. Bass ........................ 56 1995 Vice President of Finance
Barbara E. Thalenfeld, Ph.D. ........... 64 1995 Vice President, Corporate Development
David C. Goldberg ...................... 47 1995 Vice President, Business Development
John J. Delucca ........................ 61 1982 Director
John B. Sias ........................... 77 1982 Director
Irwin C. Gerson ........................ 74 2001 Director
Melvin F. Lazar, CPA ................... 65 2002 Director
Marcus A. Conant, M.D. ................. 69 2004 Director
BIOGRAPHICAL INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
DR. ELAZAR RABBANI is one of Enzo Biochem's founders and has served as the
Company's Chairman of the Board of Directors and Chief Executive Officer since
its inception in 1976. Dr. Rabbani has authored numerous scientific publications
in the field of molecular biology, in particular, nucleic acid labeling and
detection. He is also the lead inventor of many of the company's pioneering
patents covering a wide range of technologies and products. Dr. Rabbani received
his Bachelor of Arts degree from New York University in Chemistry and his Ph.D.
in Biochemistry from Columbia University. He is a member of the American Society
for Microbiology.
SHAHRAM K. RABBANI is the Chief Operating Officer, Treasurer, Secretary and
Director, is a founder and has been with the Company since its inception. He is
also President of Enzo Clinical Labs. Mr. Rabbani serves on the New York State
Clinical Laboratory Association, a professional board. Mr. Rabbani is a trustee
of Adelphi University and serves as Chairman of its Audit Committee. He received
a Bachelor of Arts Degree in Chemistry from Adelphi University, located in Long
Island, New York.
BARRY W. WEINER President, Chief Financial Officer and Director, is a
founder of the Company. He has served as the Company's President since 1996, and
previously held the position of Executive Vice President. Before his employment
with Enzo, he worked in several managerial and marketing positions at the
Colgate Palmolive Company. Mr. Weiner is a Director of the New York
Biotechnology Association. He received his Bachelor of Arts degree in Economics
from New York University and a Master of Business Administration in Finance from
Boston University.
DR. DEAN ENGELHARDT has been the Company's Executive Vice President, since
July 2000. Since joining the Company in 1981, Dr. Engelhardt has held several
other executive and scientific positions within Enzo Biochem. In addition, Dr.
Engelhardt has authored many papers in the area of nucleic acid synthesis and
protein production and has been a featured presenter at numerous scientific
conferences and meetings. He holds a Ph.D. degree in Molecular Genetics from
Rockefeller University.
5
DR. NORMAN E. KELKER is the Senior Vice President and has held this
position since 1989. Before this, he was the Company's Vice President for
Scientific Affairs. Dr. Kelker has authored numerous scientific papers and
presentations in the biotechnology field. He is a member of American Society of
Microbiology and the American Association of the Advancement of Science. Dr.
Kelker received his Ph.D. in Microbiology and Public Health from Michigan State
University.
HERBERT B. BASS is the Company's Vice President of Finance for the Company
and is also Senior Vice President of Enzo Clinical Labs. Before his promotion in
1989 to Vice President of Finance, Mr. Bass served as the Corporate Controller
of the Company. Mr. Bass has been with the Company since 1986. From 1977 to
1986, Mr. Bass held various positions at Danziger and Friedman, Certified Public
Accountants, the most recent of which was audit manager. For the preceding seven
years, he held various positions at Berenson & Berenson, Certified Public
Accountants. Mr. Bass received a Bachelor of Business Administration degree in
Accounting from Bernard M. Baruch College, in New York City.
DR. BARBARA E. THALENFELD is the Vice President of Corporate Development
for Enzo Biochem and Vice President of Clinical Affairs for Enzo Therapeutics
and has been employed with the Company since 1982. Dr. Thalenfeld has authored
over 20 scientific papers in the areas of molecular biology and genetics, and is
a member of the American Society of Gene Therapy, the Drug Development
Association and the Association of Clinical Research Professionals. Dr.
Thalenfeld received her Ph.D. at the Institute of Microbiology at Hebrew
University in Jerusalem and a Master of Science degree in Biochemistry from Yale
University, and completed a Post Doctoral Fellowship in the Department of
Biological Sciences at Columbia University.
DAVID C. GOLDBERG is the Vice President of Business Development for Enzo
Biochem and Senior Vice President of Enzo Clinical Labs, has been employed with
the company since 1985. He has held several managerial positions within Enzo
Biochem. Mr. Goldberg also held management and marketing positions with
DuPont-NEN and Gallard Schlesinger Industries before joining the Company. He
received a Master of Science degree in Microbiology from Rutgers University and
a Master of Business Administration in Finance from New York University.
JOHN B. SIAS has been a Director of the Company since January 1982. Mr.
Sias was President and Chief Executive Officer of Chronicle Publishing Company
from April 1993 to September 2000. From January 1986 until April 1993, Mr. Sias
was President of ABC Network Division, Capital Cities/ABC, Inc. From 1977 until
January 1986, he was the Executive Vice President, President of the Publishing
Division (which includes Fairchild Publications) of Capital Cities
Communications, Inc.
JOHN J. DELUCCA has been a Director of the Company since January 1982. From
2003 to 2004, Mr. Delucca was Executive Vice President and Chief Financial
Officer of REL Consulting Group. Mr. Delucca had been the Chief Financial
Officer & Executive Vice President, Finance & Administration of Coty, Inc., from
January 1999 to January 2002. From October 1993 until January 1999, he was
Senior Vice President and Treasurer of RJR Nabisco, Inc. From January 1992 until
October 1993, he was managing director and Chief Financial Officer of Hascoe
Associates, Inc. From October 1, 1990 to January 1992, he was President of The
Lexington Group. From September 1989 until September 1990, he was Senior Vice
President-Finance of the Trump Group. From May 1986 until August 1989, he was
senior Vice President-Finance at International Controls Corp. From February 1985
until May 1986, he was a Vice President and Treasurer of Textron, Inc. Before
that, he was a Vice President and Treasurer of the Avco Corporation, which was
acquired by Textron.
IRWIN C. GERSON has been a Director of the Company since May 8, 2001. From
1995 until December 1998, Mr. Gerson served as Chairman of Lowe McAdams
Healthcare and prior thereto had been, since 1986, Chairman and Chief Executive
Officer of William Douglas McAdams, Inc., one of the largest advertising
agencies in the U.S. specializing in pharmaceutical marketing and communications
to healthcare professionals. In February 2000, he was inducted into the Medical
Advertising Hall of Fame. Mr. Gerson has a Bachelor of Science in Pharmacy from
Fordham University and an MBA from the NYU Graduate School of Business
Administration. He is a director of Andrx Corporation, a NASDAQ listed company
which specializes in proprietary drug delivery technologies. From 1990 to 1999,
he was Chairman of the Council of Overseers of the Arnold and Marie Schwartz
College of Pharmacy and has served as a trustee of The Albany College of
Pharmacy and Long Island University.
6
MELVIN F. LAZAR, CPA (age 65) has been a Director of the Company since
August 1, 2002. Mr. Lazar was a founding partner of the public accounting firm
of Lazar, Levine & Felix (LLP) from 1969 until October 2002. Mr. Lazar and his
firm served the business and legal communities for over 30 years. He is an
expert on the topic of business valuations and merger and acquisition
activities. Mr. Lazar is a board member and chairman of the audit committee of
Arbor Realty Trust, Inc. (ABR:NYSE). Arbor is a real estate investment trust
(REIT) formed to invest in real estate related bridge and mezzanine loans,
preferred equity investments and other real estate related assets. Mr. Lazar is
a board member and serves as the Chairman of the Audit Committee of privately
owned Active Media Services, Inc., the largest corporate barter company in the
nation. Mr. Lazar is also a board member and serves as the Chairman of the Audit
Committee of Ceco Environmental Corp., which is a provider of innovative
solutions to industrial ventilating and air quality problems. Mr. Lazar holds a
Bachelor of Business Administration degree from The City College of New York
(Baruch College).
MARCUS A. CONANT, M.D. has been a Director of the Company since July 1,
2004. Dr. Conant, received his B.S. and M.D. degrees from Duke University. He
was an exchange student at Hammersmith Hospital in London, England and held an
Elective Fellowship in Biochemistry at the London Hospital. Dr. Conant has been
the recipient of numerous awards, and has served as a member of or consultant to
a broad array of scientific societies and associations, community organizations
and government committees and has authored or co-authored more than 70 published
papers. Dr. Conant is a Clinical Professor at the University of California San
Francisco (UCSF) and has been on the faculty of UCSF since 1967. He currently
serves as Chairman of the Board of the Conant Foundation, an HIV/AIDS education
and research foundation based in San Francisco. Dr. Conant served as principal
investigator for Enzo's Phase I clinical trial of its gene medicine for HIV-1
infection.
Dr. Elazar Rabbani and Shahram K. Rabbani are brothers and Barry W. Weiner
is their brother-in-law.
CORPORATE GOVERNANCE
Our Board of Directors and management are committed to responsible
corporate governance to ensure that the Company is managed for the long-term
benefit of its stockholders. To that end, during the past year, as in prior
years, the Board of Directors and management have periodically reviewed and
updated, as appropriate, the Company's corporate governance policies and
practices. During the past year, the Board has also continued to evaluate and,
when appropriate, update the Company's corporate governance policies and
practices in accordance with the requirements of the Sarbanes-Oxley Act of 2002
and the rules and listing standards issued by the Securities and Exchange
Commission and the New York Stock Exchange ("NYSE").
CORPORATE GOVERNANCE POLICIES AND PRACTICES
The Company has instituted a variety of policies and practices to foster
and maintain responsible corporate governance, including the following:
CORPORATE GOVERNANCE GUIDELINES - The Board of Directors adopted Corporate
Governance Guidelines, which collect in one document many of the corporate
governance practices and procedures that had evolved over the years. These
guidelines address the duties of the Board of Directors, director qualifications
and selection process, director compensation, Board operations, Board committee
matters and continuing education. The guidelines also provide for annual
self-evaluations by the Board and its committees. The Board reviews these
guidelines on an annual basis. The guidelines are available on the Company's
website at www.enzo.com.
CORPORATE CODE OF ETHICS - The Company has a Code of Ethics that applies to
all of the Company's employees, officers and members of the Board. The Code of
Ethics is available on the Company's website at www.enzo.com.
BOARD COMMITTEE CHARTERS - Each of the Company's Audit, Compensation and
Nominating/Governance Committees has written charters adopted by the Company's
Board of Directors that establish practices and procedures for each committee in
accordance with applicable corporate governance rules and regulations. The
charters are available on the Company's website at www.enzo.com.
7
DIRECTOR INDEPENDENCE
REQUIREMENTS - The Board of Directors believes that a substantial majority
of its members should be independent, non-employee directors. The Board adopted
the following "Director Independence Standards," which are consistent with
criteria established by the New York Stock Exchange, to assist the Board in
making these independence determinations.
No Director can qualify as independent if he or she has a material
relationship with the Company outside of his or her service as a Director of the
Company. A Director is not independent if, within the preceding three years:
o The director was an employee of the Company.
o An immediate family member of the director was an executive officer of
the Company.
o A director was affiliated with or employed by a present or former
internal or external auditor of the Company.
o An immediate family member of a director was affiliated with or
employed in a professional capacity by a present or former internal or
external auditor of the Company.
o A director, or an immediate family member of the director, received
more than $100,000 per year in direct compensation from the Company,
other than director and committee fees and pension or other forms of
deferred compensation for prior services (provided such compensation
is not contingent in any way on continued service).
o The director, or an immediate family member of the director, was
employed as an executive officer of another company where any of the
Company's executives served on that company's compensation committee
of the board of directors.
o The director was an executive officer or employee, or an immediate
family member of the director was an executive officer, of another
company that made payments to, or received payments from, the Company
for property or services in an amount which, in any single fiscal
year, exceeded the greater of $1 million or two percent (2%) of such
other company's consolidated gross revenues.
o The director, or an immediate family member of the director, was an
executive officer of another company that was indebted to the company,
or to which the Company was indebted, where the total amount of either
company's indebtedness to the other was five percent (5%) or more of
the total consolidated assets of the company he or she served as an
executive officer.
o The director, or an immediate family member of the director, was an
officer, director or trustee of a charitable organization where the
Company's annual discretionary charitable contributions to the
charitable organization exceeded the greater of $1 million or five
percent (5%) of that organization's consolidated gross revenues.
The Board has reviewed all material transactions and relationships between
each director, or any member of his or her immediate family, and the Company,
its senior management and its independent auditors. Based on this review and in
accordance with its independence standards outlined above, the Board of
Directors has affirmatively determined that all of the non-employee directors
are independent.
BOARD NOMINATION POLICIES AND PROCEDURE
NOMINATION PROCEDURE - The Nominating/Governance Committee is responsible
for identifying, evaluating, and recommending candidates for election to the
Board, with due consideration for recommendations made by other Board members,
the CEO, stockholders, and other sources. In addition to the above criteria, the
Nominating/Governance Committee also considers the appropriate balance of
experience, skills, and characteristics desirable among the members of the
board. The independent members of the Board review the Nominating/Governance
Committee candidates and nominate candidates for election by the Company
stockholders.
Directors must also possess the highest personal and professional ethics,
integrity and values and be committed to representing the long-term interests of
all shareholders. Board members are expected to diligently prepare for, attend
and participate in all Board and applicable Committee meetings. Each Board
member is expected to ensure that other existing and future commitments do not
materially interfere with the member's service as a director.
8
The Nominating/Governance Committee also reviews whether a potential
candidate will meet the Company's independence standards and any other director
or committee membership requirements imposed by law, regulation or stock
exchange rules.
Director candidates recommended to the Committee are subject to full Board
approval and subsequent election by the shareholders. The Board of Directors is
also responsible for electing directors to fill vacancies on the Board that
occur due to retirement, resignation, expansion of the Board or other reasons
between the Shareholders' annual meetings. The Nominating/Governance Committee
may retain a recruitment firm, from time to time, to assist in identifying and
evaluating director candidates. When a firm is used, the Committee provides
specified criteria for director candidates, tailored to the needs of the Board
at that time, and pays the firm a fee for these services. Suggestions for
director candidates are also received from board members and management and may
be solicited from professional associations as well.
Upon the recommendation of the Committee, Dr. Marcus Conant was elected to
the Board of Directors effective July 1, 2004. Dr. Conant was selected from a
group of several candidates and he was identified as a candidate to the
Committee by a non-management director. Dr. Conant was interviewed by the Chair
of the Nominating/Governance Committee, the Chairman and CEO and several
Committee members prior to his election.
BOARD COMMITTEES
All members of each of the Company's three standing committees - the Audit,
Compensation, and Nominating/Governance - are required to be independent in
accordance with NYSE criteria. See below for a description of the
responsibilities of the Board's standing committees.
EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS
The Board and the Audit, Compensation and Nominating/Governance Committees
periodically hold meetings of only the independent directors or Committee
members without management present. The presiding director of the Executive
Sessions is rotated among the independent, non-management directors.
BOARD ACCESS TO INDEPENDENT ADVISORS
The Board as a whole, and each of the Board committees separately, have
authority to retain and terminate such independent consultants, counselors or
advisors to the Board as each shall deem necessary or appropriate.
SHAREHOLDER COMMUNICATIONS WITH BOARD OF DIRECTORS
DIRECT COMMUNICATIONS - Any stockholder desiring to communicate with the
Board of Directors or with any director regarding the Company may write to the
Board or the director, c/o Shahram K. Rabbani, Office of the Secretary, Enzo
Biochem, Inc., 60 Executive Boulevard, Farmingdale, NY 11735. The Office of the
Secretary will forward all such communications to the director(s). Shareholders
may also submit an email by filling out the email form on the Company's website
at www.enzo.com.
ANNUAL MEETING - The Company encourages its directors to attend the annual
meeting of stockholders each year. Dr. Elazar Rabbani and Messrs. Melvin F.
Lazar, Shahram K. Rabbani and Barry W. Weiner attended the Annual Meeting of
Shareholders held in January 2004.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended July 31, 2004, there were 4 formal meetings of
the Board of Directors, several actions by unanimous consent and several
informal meetings. Currently, the Board of Directors has a Nominating/Governance
Committee, an Audit Committee and a Compensation Committee. The
Nominating/Governance Committee had one formal meeting, the Audit Committee had
four formal meetings and the Compensation Committee had one formal meeting in
fiscal 2004. Each of the Committees also held additional informal meetings.
The Audit Committee was established by and among the Board of Directors for
the purpose of overseeing the accounting and financial reporting processes of
the Company and audits of the financial statements of the Company in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, The
Audit Committee is authorized to review proposals of the Company's auditors
regarding annual audits, recommend the engagement
9
or discharge of the auditors, review recommendations of such auditors concerning
accounting principles and the adequacy of internal controls and accounting
procedures and practices, review the scope of the annual audit, approve or
disapprove each professional service or type of service other than standard
auditing services to be provided by the auditors, and review and discuss the
audited financial statements with the auditors. The current members of the Audit
Committee are Messrs. Delucca, Gerson, Lazar and Sias, and Mr. Delucca is the
Chairman. The Board of Directors has determined that each of the Audit Committee
members are independent, as defined in the NYSE's listing standards and as
defined in Item 7(d)(3)(iv) of Schedule 14A under the Securities and Exchange
Act of 1934. The Board of Directors has further determined that Messrs. Delucca
and Lazar are each "audit committee financial experts" as such term is defined
under Item 401(h)(2) of Regulation S-K.
The Compensation Committee has the power and authority to (i) establish a
general compensation policy for the officers and employees of the Corporation,
including to establish and at least annually review officers' salaries and
levels of officers' participation in the benefit plans of the Corporation, (ii)
prepare any reports that may be required by the regulations of the Securities
and Exchange Commission or otherwise relating to officer compensation, (iii)
approve any increases in directors' fees, (iv) grant stock options and (v)
exercise all other powers of the Board of Directors with respect to matters
involving the compensation of employees and the employee benefits of the
Corporation as shall be delegated by the Board of Directors to the Compensation
Committee. The current members of the Compensation Committee are Messrs. Gerson,
Delucca and Lazar and Mr. Gerson is the Chairman.
The Nominating/Governance Committee has the power to recommend to the Board
of Directors prior to each annual meeting of the shareholders of the
Corporation: (i) the appropriate size and composition of the Board of Directors;
and (ii) nominees: (1) for election to the Board of Directors for whom the
Corporation should solicit proxies; (2) to serve as proxies in connection with
the annual shareholders' meeting; and (3) for election to all committees of the
Board of Directors other than the Nominating/Governance Committee. The
Nominating/Governance Committee will consider nominations from the stockholders,
provided that they are made in accordance with the Company's By-laws. The
current members of the Nominating/Governance Committee are Messrs. Gerson,
Delucca, Lazar and Sias and Mr. Sias is the Chairman.
AUDIT COMMITTEE REPORT
In connection with the preparation and filing of the Company's Annual
Report on Form 10-K for the year ended July 31, 2004:
(1) The Audit Committee reviewed and discussed the audited financial
statements with management;
(2) The Audit Committee discussed with the independent auditors matters
required to be discussed under Statement on Auditing Standards No. 61,
as may be modified or supplemented;
(3) The Audit Committee reviewed the written disclosures and the letter
from the independent auditors required by the Independence Standards
Board Standard No. 1, as may be modified or supplemented, and
discussed with the independent auditors any relationships that may
impact their objectivity and independence and satisfied itself as to
the auditors' independence;
(4) The Audit Committee discussed with the Company's independent auditors
the overall scope and plans for their audits. The Audit Committee met
with the independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of the
Company's internal controls, and the overall quality of the Company's
financial reporting. The Audit Committee held four formal meetings
during the fiscal year ended July 31, 2004 and
(5) Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited
financial statements of the Company be included in the 2004 Annual
Report on Form 10-K.
Submitted by the members of the Audit Committee
John J. Delucca
Irwin C. Gerson
Melvin F. Lazar, CPA
John B. Sias
10
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who beneficially own
more than 10% of a registered class of the Company's equity securities
(collectively, "Reporting Persons") to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. Such executive
officers, directors and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) forms filed by such reporting persons.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that the Reporting Persons have complied with all applicable filing requirements
except the Form 4s relating to the Automatic Director Options granted to each of
the non-employee directors following the Company's Annual Meeting of
Shareholders held in 2004 were filed late.
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
Enzo Clinical Labs, Inc. ("Enzolabs"), a subsidiary of the Company, leases
a facility located in Farmingdale, New York from Pari Management Corporation
("Pari"). Pari is owned equally by Elazar Rabbani, Ph.D., Shahram Rabbani and
Barry Weiner and his wife, the officers and directors of Pari. The lease
commenced on December 20, 1989 and terminates on November 30, 2004. Subsequent
to the lease termination, the Company will lease the facility on a month to
month basis consistent with the lease payments required immediately prior to its
termination pending the negotiation and execution of a new lease, which terms
will be subject to approval by a majority of the independent directors of the
Company. During fiscal 2004, Enzolabs paid approximately $1,370,800 (including
$148,900 in real estate taxes) to Pari with respect to such facility and future
payments are subject to cost of living adjustments. The Company, which has
guaranteed Enzolabs' obligations to Pari under the lease, believes that the
existing lease terms are as favorable to the Company as would be available from
an unaffiliated party
CODE OF ETHICS
The Company has adopted a Code of Ethics (as such term is defined in Item
406 of Regulation S-K), which code has been filed as Exhibit 14 to the Company's
annual report on Form 10-K for the fiscal year ended July 31, 2003. The Code of
Ethics applies to the Company's Executive Officer, Chief Financial Officer and
principal accounting officer or controller, or persons performing similar
functions. The Code of Ethics has been designed to deter wrongdoing and to
promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports
and documents that the Company files with, or submits to, the
Securities and Exchange Commission and in other public communications
made by the Company;
(3) Compliance with applicable governmental laws, rules and regulations;
(4) The prompt internal reporting or violations of the Code of Ethics to
an appropriate person or persons identified in the Code of Ethics; and
(5) Accountability for adherence to the Code of Ethics.
11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following summary compensation table sets forth the aggregate
compensation paid by the Company to its chief executive officer and to the
Company's four other most highly compensated executive officers whose annual
compensation exceeded $100,000 for the fiscal year ended July 31, 2004 (each, a
"Named Executive Officer") for services during the fiscal years ended July 31,
2004, 2003 and 2002:
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------- -------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#)
--------------------------- ---- ---------- ---------- ----------------
ELAZAR RABBANI, PH.D., 2004 $430,942 $275,000 78,750
Chairman of the Board of 2003 $402,963 $275,000 105,000
Directors and CEO 2002 $367,656 $245,000 -0-
SHAHRAM K. RABBANI, 2004 $395,046 $260,000 78,750
Chief Operating Officer, 2003 $367,825 $260,000 105,000
Treasurer, Secretary 2002 $332,526 $230,000 -0-
and Director
BARRY W. WEINER, 2004 $395,046 $260,000 78,750
President, Chief Financial 2003 $367,825 $260,000 105,000
Officer and Director 2002 $332,526 $230,000 -0-
DEAN ENGELHARDT, PH.D., 2004 $225,737 $55,000 15,750
Executive Vice President 2003 $221,622 $55,000 15,750
2002 $204,527 $50,000 -0-
NORMAN E. KELKER, PH.D., 2004 $202,476 $45,000 15,750
Senior Vice President 2003 $183,268 $45,000 10,500
2002 $168,760 $30,000 -0-
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OF OPTIONS TERM
OPTION/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#) FISCAL YEAR ($ / SH) DATE 5% ($) 10% ($)
---- ------------ ------------- ----------- ---------- ----------------------
Elazar Rabbani, Ph.D., Chairman
of the Board of Directors and
Chief Executive Officer .............. 78,750 18.360% 17.45 3/07/14 864,219 2,190,101
Shahram K. Rabbani, Chief
Operating Officer, Treasurer,
Secretary and Director ............... 78,750 18.360% 17.45 3/07/14 864,219 2,190,101
Barry W. Weiner,
President and Director ............... 78,750 18.360% 17.45 3/07/14 864,219 2,190,101
Dean Engelhardt, Ph.D.,
Executive Vice President ............. 15,750 3.672% 17.45 3/07/14 172,844 438,020
Norman Kelker, Ph.D.,
Senior Vice President ................ 15,750 3.672% 17.45 3/07/14 172,844 438,020
12
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth certain information with respect to stock
option exercises by the Named Executive Officers during the fiscal year ended
July 31, 2004 and the value of unexercised options held by them at fiscal
year-end.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS OPTIONS AT IN-THE-MONEY OPTIONS/SARS AT
SHARES FISCAL YEAR-END (#) FISCAL YEAR-END ($) (1)
ACQUIRED ON VALUE -------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
Elazar Rabbani, Ph.D. 284,137 2,509,221 357,203 183,143 1,373,818 149,858
Shahram K. Rabbani 284,137 2,509,221 357,203 183,143 1,373,818 149,858
Barry W. Weiner 201,014 1,775,158 357,203 183,143 1,373,818 149,858
Dean Engelhardt, Ph.D. 13,400 149,812 51,683 37,840 237,190 27,672
Norman E. Kelker, Ph.D. -0- 177,158 25,731 29.669 171,348 19,981
----------------
(1) Market value of the underlying securities at fiscal year end minus the
exercise price paid in cash or stock.
EMPLOYMENT AGREEMENTS
Each of Mr. Barry Weiner, Mr. Shahram Rabbani and Dr. Elazar Rabbani (the
"Executives") are parties to an employment agreement effective May 4, 1994 (the
"Employment Agreement(s)") with the Company. Pursuant to the terms of their
respective Employment Agreements, as amended, Messrs. Weiner and Rabbani and Dr.
Rabbani are currently compensated for the calendar year 2004 at a base annual
salary of $434,700, $398,500 and $398,500, respectively. Each Executive will
also receive an annual bonus, the amount of which shall be determined by the
Board of Directors in its discretion. Each Employment Agreement provides that,
in the event of termination of the Executive for good reason or without cause
(or, additionally, in the case of Dr. Rabbani, a nonrenewal), as such terms are
defined therein, each Executive shall be entitled to receive: (a) a lump sum in
an amount equal to three (3) years of the Executive's base annual salary; (b) a
lump sum in an amount equal to the annual bonus paid by the Company to the
Executive for the last fiscal year of the Company ending prior to the date of
termination multiplied by three (3); (c) insurance coverage for the Executive
and his dependents, at the same level and at the same charges to the Executive
as immediately prior to his termination, for a period of three (3) years
following his termination from the Company; (d) all accrued obligations, as
defined therein; and (e) with respect to each incentive pay plan (other than
stock option or other equity plans) of the Company in which the Executive
participated at the time of termination, an amount equal to the amount the
Executive would have earned if he had continued employment for three (3)
additional years. If the Executive is terminated by reason of his disability, he
shall be entitled to receive, for three (3) years after such termination, his
base annual salary less any amounts received under a long term disability plan.
If the Executive is terminated by reason of his death, his legal representatives
shall receive the balance of any remuneration due him. The term of each of the
Executive's Employment Agreement, as amended, currently expires on May 4, 2006,
which term automatically renews for successive two year periods if notice to the
Company is not given by either party within 180 days of the end of such
successive term.
COMPENSATION OF DIRECTORS
As of January 1, 2004, each person who serves as a director and who is not
otherwise an officer or an employee (such director being classified as an
"Outside Director") of the Company, receives an annual director's fee of $20,000
and a fee of $1,500 for each meeting attended in person or by telephone. In
addition, as of March 10, 2004 each non-management Director who serves on a
Committee of the Board of Directors will receive a fee of $1,000 for each
meeting of the Committee attended by telephone and the Chairman of each such
Committee shall receive an additional $500 for each meeting of such Committee
attended. Furthermore, on the date persons are first elected to serve as Outside
Directors of the Company's Board of Directors, such persons shall receive
options ("Initial Director Options") to purchase 15,000 shares of Common Stock
of the Company, and will automatically receive options ("Automatic Director
Options" and together with the Initial Director Options, the "Director Options")
to purchase 12,500 shares of the Company's Common Stock immediately following
the date of each annual meeting of the Company's shareholders, PROVIDED,
HOWEVER, that such persons did not receive Initial
13
Director Options since the most recent grant of Automatic Director Options and
continue to serve as directors of the Company's Board of Directors. The exercise
price for each share subject to a Director Option shall be equal to the fair
market value of the Company's Common Stock on the date of grant. Director
Options shall become exercisable at the discretion of the Board of Directors,
subject to acceleration in certain circumstances, and shall expire the earlier
of ten (10) years after the date of grant or ninety (90) days after the
termination of the director's service on the Board of Directors. On January 7,
2004, each of Messrs Delucca, Gerson, Lazar and Sias were issued options to
purchase 7,875 shares (adjusted to reflect a 5% stock dividend) of Common Stock.
On March 8, 2004 each of Dr. Rabbani and Messrs. Rabbani and Weiner were issued
options to purchase 78,750 shares (adjusted to reflect a 5% stock dividend) of
Common Stock. On July 1, 2004 Dr. Conant was granted an Initial Director Option
to acquire 15,875 shares (adjusted to reflect a 5% stock dividend) of Common
Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Messrs. Gerson,
Delucca and Lazar. No member of the Compensation Committee has a relationship
that would constitute an interlocking relationship with the Company's executive
officers or other directors.
COMPENSATION COMMITTEE REPORT
The Company strives to apply a uniform philosophy to compensation for all
of its employees, including the members of its senior management. This
philosophy is based on the premise that the achievements of the Company result
from the combined and coordinated efforts of all employees working toward common
goals and objectives.
The goals of the Company's compensation program are to align remuneration
with business objectives and performance, and to enable the Company to retain
and competitively reward executive officers who contribute to the long-term
success of the Company. The Company's compensation program for executive
officers is based on the following principles, which are applicable to
compensation decisions for all employees of the Company. The Company attempts to
pay its executive officers competitively in order that it will be able to retain
the most capable people in the industry. Information with respect to levels of
compensation being paid by comparable companies is obtained from various
publications and surveys.
During the last fiscal year, the compensation of executive officers
consisted principally of salary and bonus and the Company granted stock options
to certain of its executive officers, additional grants of which may be made in
the future. The cash portion of such program includes base salary and annual
bonuses, which are awarded in the discretion of the Board of Directors. Salary
levels have been set based upon historical levels, amounts being paid by
comparable companies and performance. The Company's equity-based compensation
consists of the award of discretionary stock options, which are designed to
provide additional incentives to executive officers to maximize shareholder
value. Through the use of extended vesting periods, the option program is
designed to encourage executive officers to remain in the employ of the Company.
In addition, because the exercise prices of such options are typically set at or
above the fair market value of the stock on the date the option is granted,
executive officers can only benefit from such options if the trading price of
the Company's shares of Common Stock increases, thus aligning their financial
interests directly with those of the shareholders.
In consideration for Dr. Elazar Rabbani's services as Chairman of the Board
of Directors and Chief Executive Officer of the Company for the fiscal year
ended July 31, 2004, the Company paid Dr. Rabbani an annual salary of $430,942
and a bonus of $275,000. Such compensation was determined pursuant to the
Company's employment agreement with Dr. Rabbani and was based on the Board's
view of Dr. Rabbani's successful performance as Chief Executive Officer. See
"Employment Agreements."
Submitted by the members of the Compensation Committee
Irwin W. Gerson
John J. Delucca
Melvin F. Lazar
14
401(K) PLAN
The Company has adopted a salary reduction profit sharing plan which is
generally available to employees of the Company and any subsidiary of the
Company. Officers and directors who are employees of the Company participate in
the Plan on the same basis as other employees.
The Plan permits voluntary contributions by employees in varying amounts up
to 17% of annual earnings (not to exceed the maximum allowable in any calendar
year which is $13,000 for 2004). Employee contributions are made by salary
reduction under Section 401(k) of the Internal Revenue Code of 1986, as amended
(the "Code"), and are excluded from taxable income of the employee. The Company
may also contribute additional discretionary amounts as it may determine.
All employees of the Company who are twenty-one (21) years or older and
have been employed by the Company for a minimum of three (3) months are eligible
to participate in the Plan. Employees, who have more than 500 hours of service
per service year, but less than 1,000 hours per service year, are still
considered members of the Plan, but contribution allocations and vesting will
not increase during such time.
A participant's account is distributed to him upon retirement or
termination of employment for any reason and in certain other limited
situations. The amount of the Plan allocation attributable to the Company's
discretionary contributions will vest in accordance with a schedule. For the
fiscal year ended July 31, 2004, the Company has made contributions of 50% of
the employees' contribution up to 10% of the employees' compensation in Common
Stock of the Company.
1999 STOCK OPTION PLAN
Under the Company's 1999 Stock Option Plan (the "1999 Plan"), the Company's
Board of Directors may grant ISOs and NQSOs to selected key employees,
directors, executive officers, consultants and advisors of the Company to
purchase the Company's Common Stock. ISOs and NQSOs granted under the 1999 Plan
generally vest no earlier than six (6) months after the date of grant and can be
exercised no later than the tenth (10th) anniversary date of the date of grant.
When the optionee, however, holds more than 10% of all combined voting stock of
the Company, ISOs granted under the 1999 Plan cannot be exercised later than the
fifth (5th) anniversary date of the date of grant. The exercise prices of
options granted under the 1999 Plan are set by the Board of Directors of the
Company, or designated committee. In any event, however, ISOs granted under the
1999 Plan may not be exercisable at a price lower than the fair market value of
the Company's Common Stock on the date such options are granted, and, when the
optionee holds more than 10% of all combined voting stock of the Company, the
exercise prices of such options may not be less than 110% of the fair market
value of the Common Stock of the Company on the date of grant. ISOs granted
under the 1999 Plan to any optionee which become exercisable for the first time
in any one calendar year for shares of Common Stock of the Company with an
aggregate fair market value, as of the respective date or dates of grant, of
more than $100,000 shall be treated as NQSOs. The awards under the 1999 Plan are
subject to restrictions on transferability, are forfeitable in certain
circumstances and are exercisable at such time or times and during such period
as shall be set forth in the option agreement evidencing such option. During the
fiscal year ended July 31, 2004, options to purchase up to 428,925 shares of the
Company's Common Stock were awarded under the 1999 Plan. As of the Record Date,
of the 2,312,356 shares of the Company's Common Stock reserved for issuance upon
the exercise of options authorized for grant under the 1999 Plan, 238,780 shares
of the Company's Common Stock remain available for issuance upon the exercise of
options authorized for grant under the 1999 Plan.
2005 EQUITY COMPENSATION INCENTIVE PLAN
On October 5, 2004, our Board of Directors approved the adoption, subject
to approval by our shareholders, of its 2005 Equity Compensation Incentive Plan
for the purpose of recruiting and retaining our officers, employees, directors,
consultants and advisors pursuant to the terms of a program to be administered
by our Compensation Committee. As of the Record Date, no grants have been made
under such Plan. The 2005 Equity Compensation Incentive Plan is being presented
to our shareholders as Proposal 2 for adoption. The full text of such Plan is
attached as Exhibit A to this proxy statement.
15
INSURANCE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has in effect, with American International Group Companies
("AIG") under a policy effective February 21, 2004, and expiring on February 22,
2005, insurance covering all of its directors and officers and certain other
employees of the Company against certain liabilities and reimbursing the Company
for obligations which it incurs as a result of its indemnification of such
directors, officers and employees. Such insurance has been obtained in
accordance with the provisions of Section 726 of the Business Corporation Law of
the State of New York. The annual premium is $350,000.
This report has been provided by the Board of
Directors of the Company.
Elazar Rabbani, Ph.D.
Shahram K. Rabbani
Barry W. Weiner
Marcus A. Conant, M.D.
John J. Delucca
Irwin C. Gerson
Melvin F. Lazar, CPA
John B. Sias
16
PERFORMANCE GRAPH
The graph below compares the five-year cumulative shareholder total return
based upon an initial $100 investment (assuming the reinvestment of dividends)
for Enzo Biochem, Inc. shares of Common Stock with the comparable return for the
New York Stock Exchange Market Value Index and two peer issuer indices selected
on an industry basis. The two peer group indices include: (i) 60 biotechnology
companies engaged in the research and development of diagnostic substances and
(ii) 10 companies engaged in the medical laboratories business. All of the
indices include only companies whose common stock has been registered under
Section 12 of the Securities Exchange Act of 1934 for at least the time frame
set forth in the graph.
The total shareholder returns depicted in the graph are not necessarily
indicative of future performance. The Performance Graph and related disclosure
shall not be deemed to be incorporated by reference in any filing by the Company
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates the graph and such
disclosure by reference.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ENZO BIOCHEM, INC.,
NYSE MARKET INDEX AND SIC CODE INDEX
[Data below represents line chart in printed piece.]
ENZO MEDICAL NYSE MARKET BIOTECHNOLOGY
BIOCHEM, INC. LABORATORIES INDEX PEERS
------------- ------------ ----------- -------------
1999 100 100 100 100
2000 269.94 212.06 103.52 198.31
2001 133.87 229.22 101.06 164.68
2002 73.91 160.86 81.81 138.24
2003 115.81 171.01 89.75 165.54
2004 76.2 187.98 102.91 184.49
ASSUMES $100 INVESTED ON AUGUST 1, 1999
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JULY 31, 2004
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN OF THE
COMPANY, TWO PEER GROUP INDICES AND THE NYSE MARKET INDEX
1999 2000 2001 2002 2003 2004
------ ------ ------ ------ ------ ------
ENZO BIOCHEM, INC. 100.00 269.94 133.87 73.91 115.81 76.20
MEDICAL LABORATORIES 100.00 212.06 229.22 160.86 171.01 187.98
NYSE MARKET INDEX 100.00 103.52 101.06 81.81 89.75 102.91
BIOTECHNOLOGY PEERS 100.00 198.31 164.68 138.24 165.54 184.49
17
PROPOSAL 2
2005 EQUITY COMPENSATION INCENTIVE PLAN PROPOSAL
We have established a 2005 Equity Compensation Incentive Plan (the "2005
Plan") for the purpose of recruiting and retaining our officers, employees,
directors and consultants. The 2005 Plan authorizes the issuance of options to
purchase shares of common stock and the grant of restricted common stock awards.
Section 162(m) of the Code ("Section 162(m)") limits a corporation's income tax
deduction for compensation paid to each executive officer to $1 million per year
unless the compensation qualifies as "performance-based compensation." In
general, for a grant under the 2005 Plan to qualify as "performance-based
compensation," the 2005 Plan must have been approved by the Company's public
stockholders. The availability of the exemption for awards of "performance-based
compensation" depends upon obtaining approval of the 2005 Plan by the Company's
public stockholders. The Board of Directors determined that it was in the best
interests of the Company to seek stockholder approval at the Annual Meeting.
The discussion below is a summary of material terms of the 2005 Plan. The
discussion below is merely a summary of the Plan and does not provide detailed
information for every aspect of the 2005 Plan. For a more complete description
of the terms of the 2005 Plan, please see a copy of the 2005 Plan attached as
Exhibit A to this proxy statement.
SUMMARY OF THE 2005 EQUITY COMPENSATION INCENTIVE PLAN
ADMINISTRATION
Administration of the 2005 Plan is carried out by the Compensation
Committee of the Board of Directors. The Compensation Committee may delegate a
portion of its authority under the 2005 Plan to one or more of our officers. As
used in this summary, the term "administrator" means the Compensation Committee
or its delegate.
ELIGIBILITY
Our officers and employees and those of our subsidiaries are eligible to
participate in the 2004 Plan. Our directors and other persons that provide
consulting or advisory services to us and our subsidiaries are also eligible to
participate in the 2005 Plan. The term subsidiary is used in this summary to
refer to both corporate subsidiaries and other entities for which we directly or
indirectly control at least 50% of the equity and any other entity in which we
have a material equity interest.
MAXIMUM SHARES AND AWARD LIMITS
Under the 2005 Plan, the maximum number of shares of common stock that may
be subject to stock options and stock awards is 1,000,000. No one participant
may receive awards for more than 200,000 shares of common stock in any one
calendar year. These limitations, and the terms of outstanding awards, will be
adjusted without the approval of our stockholders as the administrator
determines is appropriate in the event of a stock dividend, stock split,
reclassification of stock or similar events. If an option terminates, expires or
becomes unexercisable, or shares of common stock subject to a stock award are
forfeited, the shares subject to such option or stock award are available under
the first sentence of this paragraph for future awards under the 2005 Plan. In
addition, shares which are issued under any type of award under the 2005 Plan
and which are repurchased or reacquired by us at the original purchase price for
such shares are also available under the first sentence of this paragraph for
future awards under the 2005 Plan.
STOCK OPTIONS
The 2005 Plan provides for the grant of both options intended to qualify as
incentive stock options under Section 422 of the Internal Revenue Code (the
"Code") and options that are not intended to so qualify. Options intended to
qualify as incentive stock options may be granted only to persons who are our
employees or are employees of our subsidiaries which are treated as corporations
for federal income tax purposes. No participant may be granted incentive stock
options that are exercisable for the first time in any calendar year for common
stock having a total fair market value (determined as of the option grant) in
excess of $100,000.
The administrator will select the participants who are granted options and,
consistent with the terms of the 2005 Plan, will prescribe the terms of each
option, including the vesting rules for such option. The option exercise price
cannot be less than the common stock's fair market value on the date the option
is granted, and in the event a participant is deemed to be a 10% owner of our
Company or one of our subsidiaries, the exercise price of an
18
incentive stock option cannot be less than 110% of the common stock's fair
market value on the date the option is granted. The 2005 Plan prohibits
repricing of an outstanding option, and therefore, the administrator may not,
without the consent of the stockholders, lower the exercise price of an
outstanding option. This limitation does not, however, prevent adjustments
resulting from stock dividends, stock splits, reclassifications of stock or
similar events. The option price may be paid in cash or by surrendering shares
of common stock, or a combination of cash and shares of common stock. Options
may be exercised in accordance with requirements set by the administrator. The
maximum period in which an option may be exercised will be fixed by the
administrator but cannot exceed ten years, and in the event a participant is
deemed to be a 10% owner of our Company or one of our corporate subsidiaries,
the maximum period for an incentive stock option granted to such participant
cannot exceed five years. Options generally will be nontransferable except in
the event of the participant's death but the administrator may allow the
transfer of non-qualified stock options through a gift or domestic relations
order to the participant's family members.
Unless provided otherwise in a participant's stock option agreement and
subject to the maximum exercise period for the option, an option generally will
cease to be exercisable upon the earlier of three months following the
participant's termination of service with us or the expiration date under the
terms of the participant's stock option agreement. The right to exercise an
option will expire immediately upon termination if the termination is for
"cause" or a voluntary termination any time after an event that would be grounds
for termination for cause. Upon death or disability, the option exercise period
is extended to the earlier of one year from the participant's termination of
service or the expiration date under the terms of the participant's stock option
agreement.
STOCK AWARDS AND PERFORMANCE BASED COMPENSATION
The administrator also will select the participants who are granted
restricted common stock awards and, consistent with the terms of the 2005 Plan,
will establish the terms of each stock award. A restricted common stock award
may be subject to payment by the participant of a purchase price for shares of
common stock subject to the award, and a stock award may be subject to vesting
requirements or transfer restrictions or both, if so provided by the
administrator. Those requirements may include, for example, a requirement that
the participant complete a specified period of service or that certain
performance objectives be achieved. The performance objectives may be based on
the individual performance of the participant, our performance or the
performance of our subsidiaries, divisions, departments or functions in which
the participant is employed or has responsibility. In the case of a performance
objective for an award intended to qualify as "performance based compensation"
under Section 162(m), the objectives are limited to specified levels of and
increases in our or a business unit's return on equity; total earnings; earnings
per share; earnings growth; return on capital; return on assets; economic value
added; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; sales growth; gross margin return on investment;
increase in the fair market value of the shares; share price (including but not
limited to growth measures and total stockholder return); net operating profit;
cash flow (including, but not limited to, operating cash flow and free cash
flow); cash flow return on investments (which equals net cash flow divided by
total capital); funds from operations; internal rate of return; increase in net
present value or expense targets. Transfer of the shares of common stock subject
to a stock award normally will be restricted prior to vesting.
AMENDMENT AND TERMINATION
No awards may be granted under the 2005 Plan after the tenth anniversary of
the adoption of the 2005 Plan. The Board of Directors may amend or terminate the
2005 Plan at any time, but an amendment will not become effective without the
approval of our stockholders if it increases the aggregate number of shares of
common stock that may be issued under the 2005 Plan, changes the class of
employees eligible to receive incentive stock options or stockholder approval is
required by any applicable law, regulation or rule, including any rule of the
NYSE. No amendment or termination of the 2005 Plan will affect a participant's
rights under outstanding awards without the participant's consent.
FEDERAL INCOME TAX ASPECTS OF THE 2005 PLAN
The following is a brief summary of the federal income tax aspects of
awards that may be made under the 2005 Plan based on existing U.S. federal
income tax laws. This summary provides only the basic tax rules. It does not
describe a number of special tax rules, including the alternative minimum tax
and various elections that may be applicable under certain circumstances. The
tax consequences of awards under the 2005 Plan depend upon the type of award and
if the award is to an executive officer, whether the award qualifies as
performance-based compensation under Section 162(m) of the Code.
19
INCENTIVE STOCK OPTIONS
The recipient of an incentive stock option generally will not be taxed upon
grant of the option. Federal income taxes are generally imposed only when the
shares of stock from exercised incentive stock options are disposed of, by sale
or otherwise. The amount by which the fair market value of the stock on the date
of exercise exceeds the exercise price is, however, included in determining the
option recipient's liability for the alternative minimum tax. If the incentive
stock option recipient does not sell or dispose of the stock until more than one
year after the receipt of the stock and two years after the option was granted,
then, upon sale or disposition of the stock, the difference between the exercise
price and the market value of the stock as of the date of exercise will be
treated as a capital gain, and not ordinary income. If a recipient fails to hold
the stock for the minimum required time, at the time of the disposition of the
stock, the recipient will recognize ordinary income in the year of disposition
in an amount equal to any excess of the market value of the common stock on the
date of exercise (or, if less, the amount realized on disposition of the shares)
over the exercise price paid for the shares. Any further gain (or loss) realized
by the recipient generally will be taxed as short-term or long-term gain (or
loss) depending on the holding period. The Company will not receive a tax
deduction for incentive stock options which are taxed to a recipient as capital
gains; however, the Company will receive a tax deduction if the sale of the
stock does not qualify for capital gains tax treatment.
NONQUALIFIED STOCK OPTIONS
The recipient of stock options not qualifying as incentive stock options
generally will not be taxed upon the grant of the option. Federal income taxes
are generally due from a recipient of nonqualified stock options when the stock
options are exercised. The difference between the exercise price of the option
and the fair market value of the stock purchased on such date is taxed as
ordinary income. Thereafter, the tax basis for the acquired stock is equal to
the amount paid for the stock plus the amount of ordinary income recognized by
the recipient. The Company will take a tax deduction equal to the amount of
ordinary income realized by the option recipient by reason of the exercise of
the option.
STOCK AWARDS
The payment of stock awards under the 2005 Plan will generally be treated
as ordinary compensation income at the time of payment or, in the case of
restricted common stock subject to a vesting requirement, at the time
substantial vesting occurs. A recipient who receives restricted shares which are
not substantially vested, may, within 30 days of the date the shares are
transferred, elect in accordance with Section 83(b) of the Code to recognize
ordinary compensation income at the time of transfer of the shares. The amount
of ordinary compensation income is equal to the amount of any cash and the
amount by which the then fair market value of any common stock received by the
participant exceeds the purchase price, if any, paid by the participant. Subject
to the application of Section 162(m), the Company will receive a tax deduction
for the amount of the compensation income.
SECTION 162(m)
Section 162(m) would render non-deductible to the Company certain
compensation in excess of $1,000,000 in any year to certain officers of the
Company unless such excess is "performance-based compensation" (as defined in
the Code) or is otherwise exempt from Section 162(m) granted under the 2005 Plan
are designed to qualify as performance-based compensation. As described above
with respect to restricted common stock, the administrator may condition such
awards on attainment of one or more performance goals that are intended to
qualify such awards as performance-based compensation.
All future awards under the 2005 Plan will be discretionary and therefore
are not determinable at this time.
Approval of the 2005 Equity Compensation Incentive Plan Proposal requires
the affirmative vote of a majority of the votes cast on the matter by holders of
our outstanding common shares at the Annual Meeting, provided a quorum is
present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2 RELATING TO THE
APPROVAL AND ADOPTION OF OUR 2005 EQUITY COMPENSATION INCENTIVE PLAN. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY
IN THEIR PROXIES A CONTRARY CHOICE.
20
PROPOSAL 3
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP, as independent
auditors, to audit the accounts of the Company for the fiscal year ending July
31, 2005. The Board of Directors approved the reappointment of Ernst & Young LLP
(which has been engaged as the Company's independent auditors since 1983). Ernst
& Young LLP has advised the Company that neither the firm nor any of its members
or associates has any direct financial interest in the Company or any of its
affiliates other than as auditors. Although the selection and appointment of
independent auditors is not required to be submitted to a vote of shareholders,
the Directors deem it desirable to obtain the shareholders' ratification and
approval of this appointment.
The following table sets forth the aggregate fees billed by Ernst & Young
LLP for the years ended July 31, 2004 and 2003 for audit and non-audit services
(as well as all "out-of-pocket" costs incurred in connection with these
services) and are categorized as Audit Fees, Audit-Related Fees, Tax Fees and
All Other Fees. The nature of the services provided in each such category is
described following the table.
2004 2003
---- ----
AUDIT FEES $215,000 $178,000
AUDIT-RELATED FEES 16,000 12,000
TAX FEES 8,000 75,000
ALL OTHER FEES 0 0
-------- --------
TOTAL FEES $239,000 $265,000
-------- --------
AUDIT FEES - Consists of professional services rendered in connection with
the annual audit of the Company's consolidated financial statements on Form 10-K
and quarterly reviews of the Company's interim financial statements on Form
10-Q. Audit fees also include fees for services performed by Ernst & Young LLP
that are closely related to the audit and in many cases could only be provided
by the Company's independent auditors. Such services include the issuance of
comfort letters and consents related to the Company's registration statements
and capital raising activities, assistance with and review of other documents
filed with the Commission and accounting advice on completed transactions.
AUDIT RELATED FEES - Consists of services related to audits of properties
acquired, due diligence services related to contemplated property acquisitions
and accounting consultations. The 2004 and 2003 fees were incurred in connection
with consultations regarding the Company's implementation of The Sarbanes-Oxley
Act of 2002.
TAX FEES - Consists of services related to corporate tax compliance,
including review of corporate tax returns, review of the tax treatments for
certain expenses and tax due diligence relating to acquisitions.
ALL OTHER FEES - There were no professional services rendered by Ernst &
Young LLP that would be classified as other fees during the years ended July 31,
2004 and 2003.
PRE-APPROVAL POLICIES AND PROCEDURES - The Audit Committee has adopted a
policy that requires advance approval of all audit, audit-related, tax services,
and other services performed by the independent auditor. The policy provides for
pre-approval by the Audit Committee of specifically defined audit and non-audit
services. Unless the specific service has been previously pre-approved with
respect to that year, the Audit Committee must approve the permitted service
before the independent auditor is engaged to perform it. The Audit Committee has
delegated to the Chair of the Audit Committee authority to approve permitted
services provided that the Chair reports any decisions to the Committee at its
next scheduled meeting.
In making its recommendations to ratify the appointment of Ernst & Young
LLP as the Company's independent accountants for the fiscal year ending July 31,
2005, the Audit Committee has considered whether the non-audit services provided
by Ernst & Young LLP are compatible with maintaining the independence of Ernst &
Young LLP.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3 RELATING TO THE
RATIFICATION OF THE APPOINTMENT OF THE AUDITORS. PROXIES SOLICITED BY THE BOARD
OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXIES A
CONTRARY CHOICE.
21
GENERAL
The Management of the Company does not know of any matters other than those
stated in this Proxy Statement which are to be presented for action at the
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such matters
in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such matters is conferred by such proxies
upon the persons voting them.
The Company will bear the cost of preparing, assembling and mailing the
Proxy, Proxy Statement and other material which may be sent to the shareholders
in connection with this solicitation. In addition to the solicitation of proxies
by use of the mails, officers and regular employees may solicit the return of
proxies. The Company may reimburse persons holding stock in their names or in
the names of other nominees for their expense in sending proxies and proxy
material to principals. In addition, American Stock Transfer & Trust Company,
6201 15th Avenue, Brooklyn, NY 11219, the Company's transfer agent, has been
engaged to solicit proxies on behalf of the Company for a fee, excluding
expenses, of approximately $5,000. Proxies may be solicited by mail, personal
interview, telephone and telegraph.
ENZO WEBSITE
In addition to the information about the Company and its subsidiaries
contained in this proxy statement, extensive information about the Company can
be found on our website located at www.enzo.com, including information about our
management team, products and services and our corporate governance practices.
The corporate governance information on our website includes the Company's
Corporate Governance Guidelines, the Code of Conduct and the charters of each of
the committees of the Board of Directors. These documents can be accessed at
www.enzo.com. Printed versions of our Corporate Governance Guidelines, our Code
of Conduct and the charters for our Board committees can be obtained, free of
charge, by writing to the Company at: Enzo Biochem, Inc., 60 Executive
Boulevard, Farmingdale, New York 11735, Attn: Corporate Secretary.
This information about Enzo's website and its content, together with other
references to the website made in this proxy statement, is for information only
and the content of the Company's website is not deemed to be incorporated by
reference in this proxy statement or otherwise filed with the Securities and
Exchange Commission.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON BEING SOLICITED BY
THIS PROXY STATEMENT, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
ANNUAL REPORT OF THE COMPANY ON FORM 10-K FOR THE YEAR ENDED JULY 31, 2004 (AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) INCLUDING THE FINANCIAL
STATEMENTS AND THE SCHEDULES THERETO. ALL SUCH REQUESTS SHOULD BE DIRECTED TO
SHAHRAM K. RABBANI, SECRETARY, ENZO BIOCHEM, INC., 60 EXECUTIVE BOULEVARD,
FARMINGDALE, NEW YORK 11735.
22
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT THE NEXT ANNUAL MEETING
SHAREHOLDER PROPOSALS. Proposals of shareholders intended to be presented
at the Company's 2005 Annual Shareholder Meeting (i) must be received by the
Company at its offices no later than July 29, 2005 (120 days preceding the one
year anniversary of the Mailing Date), (ii) may not exceed 500 words and (iii)
must otherwise satisfy the conditions established by the Securities and Exchange
Commission for stockholder proposals to be included in the Company's Proxy
Statement and form of proxy for that meeting.
DISCRETIONARY PROPOSALS. Shareholders intending to commence their own proxy
solicitations and present proposals from the floor of the 2005 Annual
Shareholder Meeting in compliance with Rule 14a-4 promulgated under the Exchange
Act of 1934, as amended, must notify the Company of such intentions before
October 12, 2005 (45 days preceding the one year anniversary of the Mailing
Date). After such date, the Company's proxy in connection with the 2005 Annual
Shareholder Meeting may confer discretionary authority on the Board to vote.
By Order of the Board of Directors
Shahram K. Rabbani, Secretary
Dated: November 26, 2004
23
PROXY
ENZO BIOCHEM, INC.
60 EXECUTIVE BOULEVARD, FARMINGDALE, NEW YORK 11735
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Elazar Rabbani, Ph.D. and Shahram K.
Rabbani as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
the Common Stock of Enzo Biochem, Inc. held of record by the undersigned on
November 24, 2004, at the Annual Meeting of Shareholders to be held on January
20, 2005 or any adjournment thereof.
PROPOSAL 1. Election of Barry W. Weiner, John J. Delucca and Melvin F. Lazar,
CPA as Class II Directors.
[ ] FOR all nominees [ ] WITHHOLDING AUTHORITY
(except as marked to the as to all nominees
contrary below)
(INSTRUCTION: To withhold authority to vote for any individual
nominee, print that nominee's name on the line provided below.)
Withheld for:
-----------------------------------
PROPOSAL 2. To consider and vote upon a proposal to approve and adopt our 2005
Equity Compensation Incentive Plan (which we refer to in the
accompanying proxy statement a the "2005 Equity Compensation
Incentive Plan Proposal").
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3. Ratification of the appointment of Ernst & Young LLP as
independent auditors for the fiscal year ending July 31, 2005.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting. This proxy when
properly executed will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR Proposals 1,2
and 3.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES OF COMMON
STOCK ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN.
Dated: , 2004 / 2005 (circle one)
-------------------
Signature:
-----------------------------------
Signature if held jointly:
----------------------------
(When signing as attorney, as executor, as
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.)
2
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(4) Date Filed: November 26, 2004
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