<PAGE>
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ENZO BIOCHEM, INC.
(Name of Registrant as Specified in Its Charter)
-------------------------------------------
(Name of Persons(s) Filing Proxy Statement, if other than Registrant
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or Rule 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
- - --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE>
ENZO BIOCHEM, INC.
60 EXECUTIVE BOULEVARD
FARMINGDALE, NEW YORK 11735
(516) 755-5500
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 1997
------------------------
To the Shareholders of Enzo Biochem, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Enzo
Biochem, Inc. (the "Company") will be held at The American Stock Exchange, 86
Trinity Place, 13th Floor Board Room, New York, New York 10006-1881, on January
14, 1997, at 10:30 A.M. local time, for the following purposes:
1. To elect Elazar Rabbani, Ph.D. and John B. Sias as Class III
directors for a term of three years or until their successors are elected
and qualified; and
2. To ratify the appointment of Ernst & Young LLP as the independent
auditors for the Company for the year ending July 31, 1997.
The close of business on November 25, 1996 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting. The transfer books of the Company will not be closed.
All shareholders are cordially invited to attend the 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 Secretary, Enzo Biochem, Inc., 60 Executive Boulevard, Farmingdale, New
York 11735. 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 27, 1996
<PAGE>
ENZO BIOCHEM, INC.
60 EXECUTIVE BOULEVARD
FARMINGDALE, NEW YORK 11735
(516) 755-5500
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 1997
This Proxy Statement is furnished in connection with the solicitation, by
the Board of Directors of Enzo Biochem, Inc. (the "Company"), of proxies in the
enclosed form for the Annual Meeting of Shareholders to be held at The American
Stock Exchange, 86 Trinity Place, 13th Floor Board Room, New York, New York
10006-1881, on January 14, 1997, at 10:30 A.M. local time, and for any
adjournment or adjournments thereof, for the purposes set forth in the foregoing
Notice of Annual Meeting of Shareholders. The persons named in the enclosed
proxy form 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 and 2 listed below and, in
their best judgment, will be voted on any other matters as may come before the
meeting. Any shareholder giving such 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 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 Secretary, Enzo Biochem,
Inc., 60 Executive Boulevard, Farmingdale, New York 11735. A return envelope
which requires no postage if mailed in the United States is enclosed for your
convenience.
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 27, 1996.
VOTING SECURITIES
Only holders of shares of Common Stock, par value $.01 per share ("Shares"),
of record as of the close of business on November 25, 1996 are entitled to vote
at the meeting. On the record date there were issued and outstanding 23,075,601
Shares. Each outstanding Share is entitled to one vote upon all matters to be
acted upon at the meeting. The holders of a majority of the outstanding Shares
shall constitute a quorum.
The election of each nominee for director requires a plurality of the votes
cast. An affirmative vote of the majority of the votes cast is required for
approval of all other matters submitted to the shareholders. 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, the executive
officers named under "Executive Compensation," all directors, and all directors
and executive officers of the Company as a group based upon the number of
outstanding Shares as of the close of business on November 25, 1996. For the
purposes of this Proxy Statement, beneficial ownership is defined in accordance
with the rules of the Securities and
<PAGE>
Exchange Commission and generally means the power to vote or to dispose of the
securities regardless of any economic interest therein.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP PERCENT
BENEFICIAL OWNER (1) OF CLASS
- - ----------------------------------------------------------------- ---------------------- -----------
<S> <C> <C>
Elazar Rabbani, Ph.D............................................. 1,556,517(2) 6.7%
60 Executive Boulevard
Farmingdale, N.Y. 11735
Shahram K. Rabbani............................................... 1,558,690(2)(3) 6.7%
60 Executive Boulevard
Farmingdale, N.Y. 11735
Barry W. Weiner.................................................. 901,494(4) 3.9%
60 Executive Boulevard
Farmingdale, N.Y. 11735
J. Morton Davis.................................................. 1,746,539(5) 7.6%
c/o D.H. Blair Investment
Banking Corp.
44 Wall Street
New York, N.Y. 10005
John B. Sias..................................................... 67,151(6) .3%
c/o Enzo Biochem, Inc.
60 Executive Boulevard
Farmingdale, N.Y. 11735
John J. Delucca.................................................. 4,134(7) .02%
c/o Enzo Biochem, Inc.
60 Executive Boulevard
Farmingdale, N.Y. 11735
Dean Engelhardt, Ph.D............................................ 175,768(8) .8%
c/o Enzo Biochem, Inc.
60 Executive Boulevard
Farmingdale, N.Y. 11735
Norman Kelker, Ph.D.............................................. 123,488(9) .5%
c/o Enzo Biochem, Inc.
60 Executive Boulevard
Farmingdale, N.Y. 11735
All directors and executive officers as
a group (10 persons)........................................... 4,490,097(10)(11) 18.7%
</TABLE>
- - ------------------------
(1) All Shares are beneficially owned and the sole investment and voting power
is held by the persons named, except as otherwise noted.
(2) Includes 664,808 Shares contributed by each of Elazar and Shahram K. Rabbani
to a general partnership (the "Partnership") in which Dr. and Mr. Rabbani,
and Barry W. Weiner and his wife are partners, and includes Shares issuable
upon exercise of options to purchase 169,418 Shares granted to each of
Elazar and Shahram K. Rabbani which are exercisable within 60 days. Does not
include Shares issuable upon exercise of options to purchase 156,880 Shares
granted to each of Elazar and Shahram K. Rabbani.
2
<PAGE>
(3) Includes 742 shares held in the name of Mr. Rabbani's son and 1,377 shares
that Mr. Rabbani holds as custodian for certain of his nephews.
(4) Includes 664,808 Shares contributed by Mr. and Mrs. Weiner to the
Partnership. Includes Shares issuable upon exercise of options to purchase
236,686 Shares granted to Barry Weiner which are exercisable within 60 days.
Does not include Shares issuable upon exercise of options to purchase
122,687 Shares granted to Mr. Weiner.
(5) Includes (i) 1,174,456 Shares owned by D.H. Blair Investment Banking Corp.
("Blair Banking") of which Mr. Davis is Chairman of the Board and sole
shareholder; (ii) 441,826 Shares owned by Engex, Inc., a closed-end
investment company of which Mr. Davis is the Chairman of the Board; (iii)
86,378 Shares owned by Mr. Davis' wife, Rosalind Davidowitz; and (iv) 43,879
Shares owned by Rivkalex Corporation, a privately-held corporation owned by
Rosalind Davidowitz. Does not include 53,912 Shares owned by Kinder
Investments, L.P., a Delaware limited partnership whose limited partners
include the children and grandchildren of Mr. Davis. Mr. Davis has expressly
disclaimed beneficial ownership of all securities held by Rosalind
Davidowitz, Rivkalex Corporation or Kinder Investments, L.P. for any
purpose.
(6) Includes Shares issuable upon exercise of options to purchase 34,903 Shares
which are exercisable within 60 days. Does not include 20,278 Shares
issuable upon exercise of options held by Mr. Sias which are not exercisable
within 60 days.
(7) Includes Shares issuable upon exercise of options to purchase 4,134 Shares
which are exercisable within 60 days. Does not include 12,010 Shares
issuable upon exercise of options held by Mr. Delucca which are not
exercisable with 60 days.
(8) Includes Shares issuable upon exercise of options to purchase 141,370 Shares
which are exercisable within 60 days. Does not include 21,647 Shares
issuable upon exercise of options held by Dr. Engelhardt which are not
exercisable within 60 days.
(9) Includes options to purchase 112,400 Shares which are exercisable within 60
days. Does not include 4,134 shares issuable upon exercise of options held
by Dr. Kelker which are not exercisable within 60 days.
(10) Includes Shares issuable upon exercise of options to purchase 906,845
Shares which are exercisable within 60 days. Does not include 551,472 Shares
issuable upon exercise of options held by such individuals which are not
exercisable within 60 days.
(11) The total number of directors and executive officers includes three
executive officers who were not named under "Executive Compensation".
3
<PAGE>
EXECUTIVE OFFICERS
The 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.
<TABLE>
<CAPTION>
YEAR BECAME AN
NAME AGE EXECUTIVE OFFICER POSITION
- - --------------------------------- --- ----------------- -------------------------------------------------------
<S> <C> <C> <C>
Elazar Rabbani, Ph.D. 52 1976 Chairman of the Board of Directors and Chief Executive
Officer
Shahram K. Rabbani 44 1976 Chief Operating Officer, Treasurer, Secretary and
Director
Barry W. Weiner 46 1977 President and Director
Norman E. Kelker, Ph.D. 57 1981 Senior Vice President
Dean Engelhardt, Ph.D. 56 1981 Senior Vice President
Herbert B. Bass 48 1995 Vice President of Finance
Barbara E. Thalenfeld, Ph.D. 56 1995 Vice President, Corporate Development
David C. Goldberg 39 1995 Vice President, Business Development
</TABLE>
PROPOSAL 1 ELECTION OF DIRECTORS
The Company has a classified Board of Directors who serve staggered
three-year terms. At the Annual Meeting, two directors will be elected to hold
office for a term of three years or until their successors are elected and
qualified. The accompanying form of proxy will be voted for the election of the
nominees listed below, to serve as directors, and who are currently directors of
the Company, unless the proxy contains contrary instructions. Management has no
reason to believe that the nominees will not be candidates or will be unable to
serve as directors. However, in the event that the nominees should become unable
or unwilling to serve as directors, the proxy will be voted for the election of
such persons as shall be designated by the directors.
THE FOLLOWING IS INFORMATION REGARDING THE NOMINEES FOR ELECTION AS CLASS
III DIRECTORS TO SERVE UNTIL THE 2000 ANNUAL MEETING:
NOMINEES
CLASS III: NEW TERM TO EXPIRE IN 2000
<TABLE>
<CAPTION>
NAME AGE YEAR FIRST BECAME A DIRECTOR
- - ------------------------------------------------------------ --- -----------------------------
<S> <C> <C>
Elazar Rabbani, Ph.D........................................ 52 1976
John B. Sias................................................ 69 1982
</TABLE>
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.
4
<PAGE>
THE FOLLOWING IS INFORMATION REGARDING THE DIRECTORS WHO ARE CONTINUING IN
OFFICE:
DIRECTORS CONTINUING IN OFFICE
CLASS I: TERM TO EXPIRE IN 1998
<TABLE>
<CAPTION>
NAME AGE YEAR FIRST BECAME A DIRECTOR
- - ------------------------------------------------------------ --- -----------------------------
<S> <C> <C>
Shahram K. Rabbani.......................................... 44 1976
CLASS II: TERM TO EXPIRE IN 1999
Barry W. Weiner............................................. 46 1976
John J. Delucca............................................. 53 1982
</TABLE>
BIOGRAPHICAL INFORMATION
ELAZAR RABBANI, Ph.D. (age 52) has served as Chairman of the Board of
Directors and Chief Executive Officer of the Company since the Company's
inception in 1976 and has served as the Company's President from its inception
to November 1996. Dr. Rabbani received his B.A. degree from New York University
in Chemistry and his Ph.D. degree in Biochemistry from Columbia University. He
is a member of the American Society for Microbiology.
SHAHRAM K. RABBANI (age 44) has served as Chief Operating Officer and
Secretary of the Company since November 1996, as Executive Vice President from
September 1981 to November 1996 and as Vice President, Treasurer and Director
since the Company's organization. Mr. Rabbani received a B.A. degree in
Chemistry from Adelphi University.
BARRY W. WEINER (age 46) has served as President of the Company since
November 1996 and as Director of the Company since its organization. Mr. Weiner
has served as an Executive Vice President of the Company from September 1981 to
November 1996, as a Vice President of the Company from the Company's
organization to November 1996 and as Secretary of the Company from March 1980 to
November 1996. He was employed by Colgate-Palmolive Company, New York, New York
from August 1974 until March 1980, when he joined the Company on a full-time
basis. Mr. Weiner received his B.S. degree in Economics from New York University
and an M.B.A. from Boston University.
JOHN J. DELUCCA (age 53) has been a Director of the Company since January
1982. Since October 1993, Mr. Delucca has been Senior Vice President and
Treasurer of RJR Nabisco, Inc. From January 1992 until October 1993, he was the
Chief Financial Officer and Managing Director of Hascoe Associates, Inc. From
October 1, 1990 until January 1992, he served as President and Chief Financial
Officer of The Lexington Group, Ltd. From September 1988 until September 1990,
he had been Senior Vice President -- Finance of The Trump Group. From May 1986
until August 1988, 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. Prior to that he was a Vice President and Treasurer
of the Avco Corporation, which was acquired by Textron.
JOHN B. SIAS (age 69) has been a Director of the Company since January 1982.
Since April 1993, Mr. Sias has been President and Chief Executive Officer of
Chronicle Publishing Company. From January 1986 until December 1992, Mr. Sias
was President of ABC Television Network Division and Executive Vice President,
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.
NORMAN E. KELKER, Ph.D. (age 57) has been a Vice President of the Company
since September 1981. Effective January 1, 1989, he was promoted to Senior Vice
President. From 1975 until he joined
5
<PAGE>
the Company, Dr. Kelker was an Associate Professor in the Department of
Microbiology of the New York University School of Medicine. He holds a Ph.D.
from Michigan State University.
DEAN ENGELHARDT, Ph.D. (age 56) has been Vice President since September
1981. Effective January 1, 1989, he was promoted to Senior Vice President. Prior
to joining the Company he was Associate Professor of Microbiology at Columbia
University College of Physicians and Surgeons. He obtained his Ph.D. from
Rockefeller University.
HERBERT B. BASS (age 48) is Vice President of Finance and has been with the
Company since 1986. Prior to his position as Vice President of Finance, Mr. Bass
was the Corporate Controller of the Company. From 1979 to 1986, Mr. Bass held
various positions at Danziger & Friedman, Certified Public Accountants, the most
recent of which was audit manager. For the preceding seven years he held various
positions at Berenson & Berenson, C.P.A.'s. Mr. Bass holds a Bachelor degree in
Business Administration from Baruch College.
BARBARA E. THALENFELD, Ph.D. (age 56) is Vice President of Corporate
Development and has been with the Company since 1982. Prior to joining the
Company, she held an HIH research fellowship at Columbia University. She
received a Ph.D. from Hebrew University-Hadassah Medical Center and an MS from
Yale University.
DAVID C. GOLDBERG (age 39) is Vice President of Business Development. Prior
to joining the Company in 1985, he was employed at DuPont NEN Products. He
received an MS from Rutgers University and an M.B.A. from New York University.
Dr. Elazar Rabbani and Shahram K. Rabbani are brothers and Barry W. Weiner
is their brother-in-law.
MEETINGS OF THE BOARD
During the fiscal year ended July 31, 1996 there were three formal meetings
of the Board of Directors, several actions by unanimous consent and several
informal meetings. The Board of Directors has an Audit Committee and Stock
Option Committee, each of which was organized in November 1982. During the
fiscal year ended July 31, 1996, there were several informal meetings of the
Audit Committee and the Stock Option Committee. Each director of the Company
attended at least 75% of all Board meetings during the fiscal year ended July
31, 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee is authorized to review proposals of the Company's
auditors regarding annual audits, recommend the engagement or discharge of the
auditors, review recommendations of such auditors concerning accounting
principles and the adequacy of internal controls and accounting procedures and
practices, to review the scope of the annual audit, to approve or disapprove
each professional service or type of service other than standard auditing
services to be provided by the auditors, and to review and discuss the audited
financial statements with the auditors. Its members are Shahram K. Rabbani, John
B. Sias and John J. Delucca.
The Stock Option Committee has the plenary authority in its discretion to
determine the purchase price of the Common Stock issuable upon the exercise of
each option, to determine the employees to whom, and the time or times at which
options shall be granted and the number of shares to be issuable upon the
exercise of each option, to interpret the plans, to prescribe, amend and rescind
rules and regulations relating to them, to determine the term and provisions of
the respective option agreements and to make all other determinations deemed
necessary or advisable for the administration of the plans. Its members are
Messrs. Sias and Delucca.
6
<PAGE>
The Company does not have a formal Compensation Committee, Nominating
Committee or Executive Committee of the Board of Directors.
SECTION 16(A) REPORTING UNDER THE SECURITIES EXCHANGE ACT OF 1934
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 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 S.E.C. 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 all filing requirements applicable to the Company's executive officers,
directors and greater than 10% beneficial owners were complied with, except that
each of Dean Engelhardt, Norman Kelker, John Sias and John Delucca inadvertently
failed to timely file a Form 5 for the year ending July 31, 1995 and Barbara
Thalenfeld and David Goldberg inadvertently failed to timely file a Form 5 for
the year ending July 31, 1996, relating solely to the acquisition and/or
exercise of Company stock options.
7
<PAGE>
EXECUTIVE COMPENSATION
In 1992, the United States Securities and Exchange Commission amended the
proxy disclosure requirements covering compensation of executive officers. These
requirements call for a new format that includes a report by the Board of
Directors on the Company's policies for making executive compensation decisions,
including the factors and criteria on which the chief executive officer's pay is
based, a series of tables covering annual and long-term compensation and a
performance graph comparing the Company's five-year cumulative total shareholder
return with the cumulative return of the American Stock Exchange Market Value
Index and another selected index.
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 $100,000 for the fiscal year ended July 31, 1996
(collectively, the "Named Executive Officers") for services during the fiscal
years ended July 31, 1996, 1995 and 1994 (giving effect to the Company's 5%
stock dividend effective on October 8, 1996):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
COMPENSATION LONG TERM
--------------------- COMPENSATION
NAME AND ANNUAL AWARDS
PRINCIPAL POSITION YEAR SALARY ($) BONUS($) OPTIONS/SARS(#)
------------------ ---- ---------- -------- ---------------
<S> <C> <C> <C> <C>
Elazar Rabbani, Ph.D., 1996 250,228 120,000 52,500
Chairman of the Board 1995 240,621 120,000 --
of Directors and CEO 1994 224,400 60,000 233,762
Shahram K. Rabbani,
Chief Operating Officer, 1996 207,636 100,000 52,500
Treasurer, Secretary and 1995 199,600 100,000 --
Director 1994 186,585 50,000 233,762
Barry W. Weiner, 1996 207,636 100,000 52,500
President and Director 1995 199,600 100,000 --
1994 186,585 50,000 165,375
Dean Engelhardt, Ph.D., 1996 145,949 20,000 15,750
Senior Vice President 1995 135,770 20,000 5,513
1994 125,766 15,000 11,025
Norman Kelker, Ph.D., 1996 139,996 15,000 --
Senior Vice President 1995 135,770 15,000 5,513
1994 125,766 15,000 --
</TABLE>
The Company does not have a Compensation Committee or other board committee
performing equivalent functions. During the fiscal year ended July 31, 1996,
deliberations concerning executive officer compensation were made by the
Company's Board of Directors, which board includes Elazar Rabbani, Ph.D.
(Chairman of the Board and Chief Executive Officer of the Company), Shahram K.
Rabbani (Chief Operating Officer, Secretary and Treasurer of the Company), Barry
W. Weiner (President of the Company), John J. Delucca and John B. Sias.
8
<PAGE>
OPTION GRANTS IN FISCAL 1996
The following table sets forth, as to the Named Executive Officers, certain
information relating to stock options granted during the fiscal year ended July
31, 1996 (giving effect to the Company's 5% stock dividend effective on October
8, 1996).
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10%($)
----------- ------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Elazar Rabbani, Ph.D........ 52,500 14.68 14.05 2005 463,888 1,175,584
Shahram K. Rabbani.......... 52,500 14.68 14.05 2005 463,888 1,175,584
Barry W. Weiner............. 52,500 14.68 14.05 2005 463,888 1,175,584
Dean Engelhardt, Ph.D....... 15,750 4.41 14.05 2005 90,800 230,105
Norman Kelker, Ph.D......... -- -- -- -- -- --
</TABLE>
- - ------------------------
(1) The 5% and the 10% assumed rates of appreciation are mandated by the rules
of the Securities and Exchange Commission and do not represent the
Corporation's estimate or projection of the future Common Stock price. Of
course, the actual realizable value of the stock options will depend on the
appreciation of the stock price and the executive officer's continued
employment with the Corporation through the applicable vesting periods of
the stock options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
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, 1996 and the value of unexercised options held by them at fiscal
year-end (giving effect to the Company's 5% stock dividend effective on October
8, 1996).
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END# FISCAL YEAR END ($)(1)
SHARES ACQUIRED VALUE -------------------------- --------------------------
NAME ON EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISEABLE UNEXERCISABLE
- - --------------------------------- ------------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elazar Rabbani, Ph.D............. -- -- 169,418 156,880 959,974 539,179
Shahram K. Rabbani............... -- -- 169,418 156,880 959,974 539,179
Barry W. Weiner.................. -- -- 236,686 122,687 1,875,658 381,444
Dean Engelhardt, Ph.D............ -- -- 141,370 21,647 1,504,432 45,439
Norman Kelker, Ph.D.............. -- -- 112,400 4,134 1,239,919 20,010
</TABLE>
- - ------------------------
(1) Market value of the underlying securities at fiscal year end minus the
exercise price
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, Messrs. Weiner and Rabbani and Dr. Rabbani are
compensated at a base annual salary of $210,912, $210,912 and $254,176,
respectively. Each Executive will also receive an annual bonus, the amount of
which shall be determined by the Board of Directors in their 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,
9
<PAGE>
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 is three (3)
years from the date of execution of the Employment Agreement with a renewal
period of two (2) years, such renewal to occur automatically unless either the
Company or the Executive terminates the Employment Agreement upon six (6) months
written notice.
COMPENSATION OF DIRECTORS
Each director who is not an officer or an employee of the Company (an
"Outside Director") received $12,000 in compensation for the fiscal year ended
July 31, 1996. Under the 1994 Stock Option Plan, each Outside Director
automatically receives, on the day immediately following the date of each annual
meeting of stockholders and as long as such director is a member of the Board of
Directors, an option ("Director's Option") to purchase 7,500 shares of Common
Stock. The exercise price of each share subject to a Director's Option shall be
equal to the fair market value of the Common Stock on the date of grant.
Director's Options are exercisable in two equal annual installments commencing
on the date the option is granted and expires 10 years after the date of grant
or 90 days after the termination of the director's service on the Board. During
fiscal year 1996, each Outside Director received an option to purchase 7,500
shares of Common Stock.
BOARD OF DIRECTORS COMPENSATION 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 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
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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 increases, thus aligning their financial
interests directly with those of the shareholders.
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 15% of annual earnings (not to exceed the maximum allowable in any calendar
year which is $9,500 for 1996). Employee contributions are made by salary
reduction under Section 401(k) of the Internal Revenue Code of 1986 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 six (6) 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. To date, the Company has made no
discretionary contributions to the Plan.
1994 STOCK OPTION PLAN
On November 8, 1994, the Board of Directors of the Company approved the
adoption of the 1994 Stock Option Plan (the "1994 Plan") which provides for the
awarding of the Company's Common Stock to selected key employees and directors
of the Company and on January 18, 1995, the Company's shareholders approved the
1994 Plan. The 1994 Plan authorizes the awarding of up to 950,000 shares of the
Company's Common Stock in the aggregate. The awards under the 1994 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, 1996, 340,500 shares of the Company's Common Stock
were awarded under the 1994 Plan.
INSURANCE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has in effect, with Chubb Insurance Group under a policy
effective January 20, 1996, and expiring on January 21, 1997, 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 $128,600.
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 which
commenced on December 20, 1989 and terminates on November 30, 2004 provides for
a
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<PAGE>
minimum net annual rent of $515,000 through December 31, 1996 and $818,250 for
the period beginning January 1, 1997, subject to annual cost of living
adjustments. During fiscal 1996, Enzolabs paid $771,372 (including $115,992 in
real estate taxes) to Pari with respect to such facility. The Company, which has
guaranteed Enzolabs' obligations to Pari under the lease, believes that the
lease terms are as favorable to the Company as would be available from an
unaffiliated party.
This report has been provided by the Board of Directors of the Company.
Elazar Rabbani, Ph.D.
Shahram K. Rabbani
Barry W. Weiner
John J. Delucca
John B. Sias
The compensation report 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 the Company specifically incorporates
such report.
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 with the comparable return for the American Stock
Exchange Market Value Index and two peer issuer indexes selected on an industry
basis. The two peer group indexes include: (i) 64 biotechnology companies
engaged in the research and development of diagnostic substances and (ii) 34
companies engaged in the medical laboratories business. All of the indexes
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.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN OF COMPANY, PEER GROUPS AND BROAD
MARKET
COMPANY 1991 1992 1993 1994 1995 1996
---- ----- ---- ---- ---- ----
ENZO BIOCHEM INC. 100 672.73 1,418.18 1,381.82 2,578.30 2,215.43
INDUSTRY INDEX 100 100.13 86.44 91.62 95.63 71.26
BROAD MARKET 100 107.85 117.77 120.70 146.38 149.82
ASSUMES $100 INVESTED ON AUG. 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED JULY 31, 1996
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PROPOSAL 2
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, 1997. The Board of Directors approved the reappointment of Ernst & Young LLP
(the firm resulting from the merger of Ernst & Whinney and Arthur Young &
Company, 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.
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 2 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.
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, Continental Stock Transfer & Trust Company,
2 Broadway, New York, New York 10004, the Company's transfer agent, has been
engaged to solicit proxies on behalf of the Company for a fee, excluding
expenses, of approximately $3,750. Proxies may be solicited by mail, personal
interview, telephone and telegraph.
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, 1996 (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.
All proposals of shareholders intended to be included in the Proxy Statement
to be presented at the next Annual Meeting of Shareholders must be received at
the Company's executive office in Farmingdale, New York, no later than July 30,
1997.
By Order of the Board of Directors
Shahram K. Rabbani, SECRETARY
Dated: November 27, 1996
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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 Shahram K.Rabbani and Barry W. Weiner 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 25,
1996, at the Annual Meeting of Shareholders to be held on January 14, 1997 or
any adjournment thereof.
<TABLE>
<S> <C> <C>
1. Election of Elazar Rabbani, Ph.D. and John B. Sias as Class III Directors
FOR the nominees listed above / / WITHHOLDING AUTHORITY / /
(EXCEPT AS MARKED TO THE CONTRARY
BELOW)
(INSTRUCTION: To withhold authority to vote for any individual nominee, print that
nominee's name on the line provided below.)
<CAPTION>
1.
<S> <C>
</TABLE>
- - --------------------------------------------------------------------------------
(TO BE DATED AND SIGNED ON THE OTHER SIDE)
<PAGE>
<TABLE>
<S> <C>
2. To ratify the appointment of Ernst & Young LLP as the independent auditors for the Company for the fiscal year ending
July 31, 1997.
</TABLE>
FOR / / AGAINST / / ABSTAIN / /
<TABLE>
<S> <C>
3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the 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 and 2. Please sign exactly as name appears below. When shares
are held by joint tenants, both should sign.
</TABLE>
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN.
Dated: _______________________, 199
___________________________________
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.)
