SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant (x)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
E-Z-EM, Inc.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(x) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
5) Total fee paid:
____________________________________________________________________
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
____________________________________________________________________
2) Form, Schedule or Registration Statement No.:
____________________________________________________________________
3) Filing Party:
____________________________________________________________________
4) Date Filed:
____________________________________________________________________
<PAGE>
E-Z-EM, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 21, 1997
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of E-Z-EM, INC., a Delaware corporation (the "Company"), will be
held at the Milleridge Inn, Jericho, New York, on October 21, 1997 at 10:00
a.m., Local Time, for the following purposes:
1. To elect three Class I directors, each to serve for a term of
three years;
2. To ratify the appointment of Grant Thornton LLP as the Company's
independent auditors for the fiscal year ending May 30, 1998;
3. To transact such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on September 25,
1997 as the record date (the "Record Date") for the Meeting. Only
stockholders of record of the Company's Class A Common Stock, $0.10 par
value, on the Company's stock transfer books on the close of business on
that date are entitled to vote at the Meeting.
By Order of the Board of Directors
PETER J. GRAHAM, Secretary
Westbury, New York
Dated: September 30, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
If you wish to attend, please check the appropriate box on the enclosed
proxy and return it in the enclosed envelope.
<PAGE>
E-Z-EM, INC.
717 MAIN STREET
WESTBURY, NEW YORK 11590-5021
_____________________
PROXY STATEMENT
FOR
MEETING OF STOCKHOLDERS
OCTOBER 21, 1997
_____________________
INTRODUCTION
This Proxy Statement is being furnished to stockholders by the Board
of Directors of E-Z-EM, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of the accompanying proxy (each a "Proxy"
and collectively, the "Proxies") for use at the 1997 Annual Meeting of
Stockholders of the Company (the "Meeting") to be held at the Milleridge
Inn, Jericho, New York, on Tuesday, October 21, 1997 at 10:00 a.m., or at
any adjournment thereof.
The principal executive offices of the Company are located at 717 Main
Street, Westbury, New York 11590-5021. The approximate date on which this
Proxy Statement and the accompanying Proxy will first be sent or given
to stockholders is September 30, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
accordingly files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission are available
for inspection and copying at the public reference facilities maintained by
the Commission at 450 Fifth Street, Washington, D.C. 20549 and at certain
of the Commission's regional offices. Copies of such documents may be
obtained from the Public Reference Section of the Commission at prescribed
rates. In addition, such material and other information concerning the
Company can be inspected at the American Stock Exchange, on which exchange
shares of the Company's securities are listed.
<PAGE>
TABLE OF CONTENTS
Page
----
Summary of Proxy Statement...................................... 1
Record Date and Voting Securities............................... 1
Voting of Proxies............................................... 1
Security Ownership.............................................. 2
Election of Directors........................................... 4
Nominees................................................... 4
Meetings................................................... 6
Executive Compensation..................................... 7
Compensation and Stock Option Committee Report.................. 11
Certain Transactions............................................ 14
Ratification of Appointment of Independent Auditors............. 14
Annual Report................................................... 14
Stockholder Proposals........................................... 14
Other Matters................................................... 15
-i-
<PAGE>
SUMMARY OF PROXY STATEMENT
The following is a summary of certain information contained in this
Proxy Statement. This summary should not be considered complete and is
qualified in its entirety by the more detailed information and financial
statements contained in the Proxy Statement. Certain capitalized terms
used in this summary are defined in the Proxy Statement.
The principal offices of the Company are located at 717 Main Street,
Westbury, New York 11590-5021, (516) 333-8230.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
Three of the Company's eight directors are to be elected at the Annual
Meeting. Each of the directors will serve until the 2000 Annual Meeting of
Shareholders and until, in each case, his successor is duly elected and
qualified.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
Shareholders are being asked at the Annual Meeting to ratify the
appointment of Grant Thornton LLP, certified public accountants, as the
independent auditors for the Company for the 1998 fiscal year.
RECORD DATE AND VOTING SECURITIES
As of the close of business on September 25, 1997, the record date
(the "Record Date"), there were 4,035,346 outstanding shares of the
Company's Class A Common Stock, $0.10 par value (the "Class A Common
Stock"). Holders of the Class A Common Stock have one vote per share on
each matter to be acted upon. Only stockholders of Class A Common Stock of
record at the close of business on the Record Date for the Meeting (the
"Stockholders") will be entitled to vote at the Meeting and at any
adjournment thereof. A majority of the outstanding shares of Class A
Common Stock present in person or by proxy is required to constitute a
quorum at the Meeting.
Additionally, the Company had 5,602,196 shares of Class B Common
Stock, $0.10 par value (the "Class B Common Stock" and collectively with
the Class A Common Stock, the "Common Stock") outstanding as of the Record
Date. Shares of Class B Common Stock are nonvoting shares.
VOTING OF PROXIES
Shares of Class A Common Stock represented by Proxies that are
properly executed, duly returned and not revoked, will be voted in
accordance with the instructions contained therein. If no specification is
indicated on the Proxy, the shares of Class A Common Stock represented
thereby will be voted: (i) for the election as Directors of the persons who
have been nominated by the Board of Directors; (ii) for the ratification of
the appointment of Grant Thornton LLP as the Company's independent auditors
for the fiscal year ending May 30, 1998 (the "1998 Fiscal Year"); and (iii)
with respect to any other matter that may properly be brought before the
Meeting in accordance with the judgment of the person or persons voting
the Proxies.
The execution of a Proxy will in no way affect a Stockholder's right
to attend the Meeting and vote in person. Any Proxy executed and returned
by a Stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy which is
presented before the Meeting, or if the Stockholder attends the Meeting and
votes by ballot, except as to any matter or matters upon which a vote shall
have been cast pursuant to the authority conferred by such Proxy prior to
such revocation. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes"
(i.e., proxies from brokers or nominees indicating that such persons have
not received instructions from the beneficial owner or other persons
entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as
shares that are present but which have not been voted.
-1-
<PAGE>
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the
use of the mail, proxy solicitation may be made by telephone, telegraph and
personal interview by officers, directors and employees of the Company.
The Company will, upon request, reimburse brokerage houses and persons
holding Class A Common Stock in the names of their nominees for their
reasonable expenses in sending soliciting material to their principals.
SECURITY OWNERSHIP
The following table sets forth information, as of September 25, 1997,
as to the beneficial ownership of the Company's voting Class A Common Stock
by each person known by the Company to own beneficially more than 5% of the
Company's voting Class A Common Stock:
Name and Address of Shares Percent of
Beneficial Owner Beneficially Owned Class
---------------- ------------------ -----
Howard S. Stern,................ 956,412 23.7
Chairman of the Board,
Director
717 Main Street
Westbury, NY 11590
Betty S. Meyers and estate...... 820,806 20.3
of Phillip H. Meyers, M.D.,
former officer and director
401 Emerald Street
New Orleans, LA 70124
Wellington Management Company,.. 219,258 5.4
75 State Street
Boston, MA 02109
Dimensional Fund Advisors, Inc., 215,575 5.3
1299 Ocean Avenue
Santa Monica, CA 90401
The following table sets forth information, as of September 25, 1997,
as to the beneficial ownership of the Company's voting Class A and
nonvoting Class B Common Stock, by (i) each of the Company's directors,
(ii) each of the Company's Named Executive Officers, and (iii) all
directors and executive officers of the Company as a group:
Class A Class B
--------------------- ---------------------
Shares Percent Shares Percent
Name of Beneficially of Beneficially of
Beneficial Owner Owned (1) Class Owned (2) Class
---------------- ------------ ------- ------------ -------
Howard S. Stern,........... 956,412 23.7 1,271,968 22.4
Chairman of the Board,
Director
David P. Meyers,........... 192,750 4.8 257,842 4.6
Director
Daniel R. Martin,.......... 24,389 * 180,581 3.1
President, Chief Executive
Officer, Director
-2-
<PAGE>
Class A Class B
--------------------- ---------------------
Shares Percent Shares Percent
Name of Beneficially of Beneficially of
Beneficial Owner Owned (1) Class Owned (2) Class
---------------- ------------ ------- ------------ -------
Arthur L. Zimmet,.......... 28,750 * 87,304 1.5
Senior Vice President
Robert M. Topol,........... 26,398 * 62,833 1.1
Director
Paul S. Echenberg,......... 3,398 * 72,472 1.3
Chairman of the Board of
E-Z-EM Canada, Director
James L. Katz,............. 3,423 * 52,343 *
Director
Dennis J. Curtin,.......... 2,052 * 51,770 *
Vice President
Donald A. Meyer,........... 20,577 * 31,542 *
Director
Eamonn P. Hobbs,........... 50 * 38,450 *
Vice President
Michael A. Davis, M.D.,.... None * 36,705 *
Medical Director/Technical
Director, Director
All directors and executive
officers as a group (18
persons)................. 1,258,199 (3) 31.0 2,330,181 (4) 36.5
_______________
* Does not exceed 1%.
(1) Includes Class A Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from September 25,
1997 as follows: Daniel R. Martin (17,389), Robert M. Topol (2,898),
Paul S. Echenberg (2,898), James L. Katz (2,898) and Donald A. Meyer
(2,898).
(2) Includes Class B Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from September 25,
1997 as follows: Howard S. Stern (76,491), Daniel R. Martin (171,354),
Arthur L. Zimmet (49,402), Robert M. Topol (39,035), Paul S. Echenberg
(71,816), James L. Katz (50,598), Dennis J. Curtin (49,084), Donald A.
Meyer (7,208), Eamonn P. Hobbs (38,442) and Michael A. Davis, M.D.
(36,705).
(3) Includes Class A Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from September 25,
1997 totalling 28,981 shares.
(4) Includes Class B Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from September 25,
1997 totalling 776,506 shares.
-3-
<PAGE>
PROPOSAL I ELECTION OF DIRECTORS
NOMINEES
As of January 1, 1997, the effective date of the retirement of Irwin
H. Nadel, the Company's Board of Directors consisted of eight Directors.
The Board is classified into three classes, each of which has a staggered
three-year term. At the Meeting, the Stockholders will elect three Class I
directors each of whom will hold office until the Annual Meeting of
Stockholders to be held in 2000 and until their successors are duly elected
and qualified. The Class II directors and Class III directors will
continue in office during the terms indicated below. Unless otherwise
specified, all Proxies received will be voted in favor of the election of
the persons named below (the "Nominees") as directors of the Company.
Directors shall be elected by a plurality of the votes cast, in person or
by proxy, at the Meeting. Abstentions from voting and broker non-votes on
the election of directors will have no effect since they will not represent
votes cast at the Meeting for the purpose of electing directors.
The term of each of the current Class I directors expires at the
Meeting when his respective successor is duly elected and qualified.
Management has no reason to believe that any of the Nominees will be unable
or unwilling to serve as a director, if elected. Should any of the
Nominees not remain a candidate for election at the date of the Meeting,
the Proxies will be voted in favor of the Nominees who remain candidates
and may be voted for substitute nominees selected by the Board of
Directors. The names of the Nominees and certain information concerning
them are set forth below:
Nominees to Class I of the Board of Directors
First
Year
Became
Name Principal Occupation Age Director
---- -------------------- --- --------
James L. Katz Founder and Principal, 61 1983
Chapman Partners LLC
Daniel R. Martin President and Chief 60 1990
Executive Officer of
the Company
Michael A. Davis Professor of Radiology 56 1995
and Nuclear Medicine,
University of
Massachusetts Medical
Center
JAMES L. KATZ, CPA, JD, age 61, has been a director of the Company
since 1983. He is a founder and has been a principal of Chapman Partners
LLC (investment banking) since its organization in 1995. Previously, he
had been the co-owner and President of Ever Ready Thermometer Co., Inc.
from its acquisition in 1985 until its sale in 1994. From 1971 until 1980
and from 1983 until 1985, he held various executive positions with Baxter
International and subsidiaries of Baxter International, including that of
Chief Financial Officer of Baxter International. He is also a director of
Intec, Inc. and Binax.
DANIEL R. MARTIN, age 60, has served as President, Chief Executive
Officer and Director since 1994, and previously served as President, Chief
Operating Officer and Director from 1990 to 1993.
MICHAEL A. DAVIS, M.D., age 56, has served as Medical Director/
Technical Director and Director of the Company since January 1997, and
previously served as Medical Director and Director of the Company from 1995
to 1996, as Medical Director from 1994 to 1995, and as Associate Medical
Director from 1988 to 1993. He has been Professor of Radiology and Nuclear
Medicine and Director of the Division of Radiologic Research, University of
Massachusetts Medical Center since 1980. He is also a director of
MacroChem Corp.
-4-
<PAGE>
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES.
The following Class II and III Directors will continue on the Board of
Directors for the terms indicated:
Class II Directors
(Term Expiring in 1998):
PAUL S. ECHENBERG, age 53, has been a director of the Company since
1987 and has served as Chairman of the Board of E-Z-EM Canada Inc. since
1994. He is the President, Chief Executive Officer and Director of
Schroders & Associates Canada Inc. (investment buy-out advisory services)
since January 1997 and Director of Schroders Ventures Ltd. since June 1997.
He is also a founder and has been a general partner and director of Eckvest
Equity Inc. (personal investment and consulting services) since 1989. He
was also a founder and had been a senior partner of BDE Capital Partners
(investment banking partnership) from 1992 to 1994. He is also a director
of Lallemand Inc., ISG Technologies, Inc., LDI Research Co., Inc., LDI
Marketing Co., Inc., Benvest Capital Inc., Colliers MacAuley Nicholl and
Huntington Mills (Canada) Ltd. The Company has an investment in ISG
Technologies, Inc.
DONALD A. MEYER, age 63, has been a director of the Company since
1968. He is currently an independent consultant in legal matters to arts
and business organizations, specializing in technical assistance. He had
been the Executive Director of the Western States Arts Federation, Santa
Fe, New Mexico, which provides and develops regional arts programs, from
1990 to 1995. From 1958 through 1990, he was an attorney practicing in New
Orleans, Louisiana.
ROBERT M. TOPOL, age 72, has been a director of the Company since
1982. Prior to his retirement in 1994, he served as an Executive Vice
President of Smith Barney, Inc. (financial services) for more than five
years. He is also a director of First American Health Concepts, Fund for
the Aging, City Meals on Wheels, American Health Foundation, State
University of New York -- Purchase, and Redstone Resources Inc.
Class III Directors
(Term Expiring in 1999):
HOWARD S. STERN, age 66, is a co-founder of the Company and has served
as Chairman of the Board and Director of the Company since its formation in
1962. Prior to 1994, Mr. Stern also served as Chief Executive Officer, and
from the formation of the Company until 1990, he served as President of the
Company.
DAVID P. MEYERS, age 33, has been a Director of the Company since
November 1996. He is the founder of MedTest Express, Inc., an Atlanta,
Georgia provider of contracted laboratory services for home health
agencies, and has served as its President and Chief Executive Officer since
1994. For the five years prior to that, Mr. Meyers was the Vice President
of Operations at Radiation Care, Inc., an Atlanta, Georgia operator of
radiation therapy and diagnostic imaging centers. Mr. Meyers is the son of
Dr. Phillip H. Meyers, a former director, officer and holder of over 23% of
the outstanding securities of the Company, who died during the past year.
-5-
<PAGE>
MEETINGS
The Board of Directors held three regular meetings and two special
meetings by conference call during the 1997 Fiscal Year. From time to time,
the members of the Board of Directors act by unanimous written consent
pursuant to the laws of the State of Delaware. All directors attended all
Board meetings during the 1997 Fiscal Year, except that Mr. Topol missed
one meeting.
The Company has a standing Executive Committee, Audit Committee,
Nominating Committee, Compensation Committee and Finance Committee.
The Executive Committee has the power and authority to act on behalf
of the Board during intervals between regularly scheduled Board meetings.
The members of the Executive Committee are Messrs. Stern, Martin,
Echenberg, Katz and Topol. The Executive Committee did not meet during the
1997 Fiscal Year.
The Audit Committee recommends to the Board the selection of
independent accountants and reviews the scope and results of the annual
audit. The members of the Audit Committee are Messrs. Katz and Topol. The
Audit Committee met twice during the 1997 Fiscal Year.
The Nominating Committee recommends to the Board nominees for election
to the Board. The members of the Nominating Committee are Messrs. Meyer and
Topol. The Nominating Committee did not meet during the 1997 Fiscal Year.
The Compensation Committee determines the compensation for the
President and the Chief Executive Officer. In addition, the Compensation
Committee also sets the policies and parameters of the Company's executive
compensation programs and awards thereunder, and makes determinations as to
stock option grants under the 1983 Stock Option Plan and the 1984 Directors
and Consultants Stock Option Plan. The members of the Compensation
Committee are Messrs. Stern and Meyer. The Compensation Committee met six
times during the 1997 Fiscal Year.
The Board of Directors created a Finance Committee in 1995. Its
members are Messrs. Topol and Katz. The Finance Committee did not meet
during the 1997 Fiscal Year.
-6-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation
for services, in all capacities for 1997, 1996 and 1995, of those persons
who were, at the end of 1997, Chief Executive Officer ("CEO") (Daniel R.
Martin) and each of the four most highly compensated executive officers of
the Company other than the CEO (collectively, the "Named Executive
Officers"):
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------- -------------------------------------
Awards Payouts
---------------------------- -------
Other
Annual Restricted All Other
Name and Compensa- Stock Options LTIP Compensa-
Principal Fiscal Salary Bonus tion (1) Awards ---------------- Payouts tion (4)
Position Year ($) ($) ($) ($) # (2) # (3) ($) ($)
--------- ------ ------ ----- --------- ---------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Howard S. Stern,..... 1997 $250,000 $11,538 None None None 8.5227 None $ 7,090
Chairman of the Board 1996 250,000 None None None None None None 7,245
1995 250,000 None None None 76,491 None None 11,712
Daniel R. Martin,.... 1997 $230,000 $ 7,962 None None None None None $ 7,270
President and Chief 1996 220,000 None None None None None None 9,261
Executive Officer 1995 200,000 None None None 120,200 None None 8,453
Arthur L. Zimmet,.... 1997 $153,000 $ 7,062 None None None None None $ 7,380
Senior Vice President 1996 153,000 None None None None None None 7,760
1995 153,000 10,000 None None 41,524 None None 7,466
Eamonn P. Hobbs,..... 1997 $176,250 $ 6,058 None None None 45.4545 None $ 7,902
Vice President 1996 170,648 None None None None None None 8,021
1995 120,000 15,000 None None 31,689 None None 5,856
Dennis J. Curtin,.... 1997 $144,000 $ 6,646 None None None 3.4091 None $ 7,534
Vice President 1996 144,000 7,500 None None None None None 7,880
1995 144,000 25,000 None None 41,205 None None 7,027
</TABLE>
_______________
(1) The Company has concluded that the aggregate amount of perquisites and
other personal benefits paid to each of the Named Executive Officers
for 1997, 1996 and 1995 did not exceed the lesser of 10% of such
officer's total annual salary and bonus for 1997, 1996 or 1995 or
$50,000; such amounts are, therefore, not reflected in the table.
(2) Options are exercisable in Class B Common Stock of the Company and have
been retroactively adjusted for the 3% stock dividends described in
Note L to the Consolidated Financial Statements.
(3) Options are exercisable in Class B Common Stock of AngioDynamics, Inc.,
a wholly-owned subsidiary of the Company.
(4) For 1997, 1996 and 1995, represents for each of the Named Executive
Officers the amounts contributed by the Company under the Profit-
Sharing Plan and, as matching contributions, under the companion 401(k)
Plan.
-7-
<PAGE>
Option Grants Table
The following table sets forth certain information concerning stock
option grants made during 1997 to the Named Executive Officers. These
grants are also reflected in the Summary Compensation Table. All of the
options granted during 1997 have an exercise price not less than the fair
market value of the Class B Common Stock of AngioDynamics, Inc., a wholly-
owned subsidiary of the Company, on the date of grant, and expire in ten
years. In accordance with SEC disclosure rules, the hypothetical gains or
"option spreads" for each option grant are shown based on compound annual
rates of stock price appreciation of 5% and 10% from the grant date to the
expiration date. The assumed rates of growth are prescribed by the SEC and
are for illustrative purposes only; they are not intended to predict future
stock prices, which will depend upon market conditions and the Company's
future performance. The Company did not grant any stock appreciation rights
during 1997.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
- ---------------------------------------------------------------- ---------------------------------------
Number of % of Total
Securities Options 5% 10%
Underlying Granted to Exercise ------------------ ------------------
Options Employees or Base Stock Potential Stock Potential
Granted Fiscal Year Price Expiration Price Value Price Value
Name (#) (1) 1997 (3) ($/Sh) Date ($/Sh) $ ($/Sh) $
---- ---------- ----------- -------- ---------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Howard S. Stern... 8.5227 (2) 8.7% $80,000 3/03/07 $130,312 $428,794 $207,499 $1,086,636
Daniel R. Martin.. None
Arthur L. Zimmet.. None
Eamonn P. Hobbs... 45.4545 (2) 46.4% $80,000 3/03/07 $130,312 $2,286,907 $207,499 $5,795,403
Dennis J. Curtin.. 3.4091 (2) 3.5% $80,000 3/03/07 $130,312 $171,519 $207,499 $434,657
</TABLE>
_______________
(1) Options are exercisable in Class B Common Stock of AngioDynamics, Inc.,
a wholly-owned subsidiary of the Company.
(2) Options are exercisable 20% per year over five years from the date of
grant, provided a threshold event occurs or 100% on the ninth
anniversary of the grant, if no threshold event occurs. A threshold
event is the earlier of (i) fourteen months after either an initial
public offering ("IPO") or the spin off of all AngioDynamics stock to
the Company's shareholders, or (ii) two months after the occurrence of
both an IPO and the spin off of all AngioDynamics stock to the
Company's shareholders.
(3) Represents the percentage of total options granted to employees during
1997 and exercisable in Class B Common Stock of AngioDynamics, Inc.
-8-
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table sets forth certain information concerning all
exercises of stock options during 1997 by the Named Executive Officers and
the fiscal year-end value of unexercised stock options on an aggregated
basis:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
May 31, 1997 May 31, 1997
(#) ($) (1)
------------- -------------
Shares Value Exercisable/ Exercisable/
Acquired on Realized Unexercisable Unexercisable
Name Exercise (#) ($) (2) (2)
---- ------------ -------- ------------- -------------
Howard S. Stern....... None None 76,491/ $250,743/
None None
Daniel R. Martin...... None None 188,743/ $472,445/
None None
Arthur L. Zimmet...... None None 49,402/ $152,442/
None None
Eamonn P. Hobbs....... None None 38,442/ $117,871/
None None
Dennis J. Curtin...... None None 49,084/ $157,515/
None None
_______________
(1) Options are "in-the-money" if on May 31, 1997, the market price of the
stock exceeded the exercise price of such options. At May 31, 1997,
the closing price of the Company's Class A and Class B Common Stock was
$8.25 and $7.63, respectively. The value of such options is calculated
by determining the difference between the aggregate market price of the
stock covered by the options on May 31, 1997 and the aggregate exercise
price of such options.
(2) Options granted prior to the Company's recapitalization on October 26,
1992 are exercisable one-half in Class A Common Stock and one-half in
Class B Common Stock. Options granted after the recapitalization are
exercisable in Class B Common Stock.
Employment Contract
During 1994, the Company entered into an employment contract with
Howard S. Stern. This employment contract is for a term of eight years at
an annual compensation of $250,000.
-9-
<PAGE>
Severance Arrangements
The Company has entered into severance agreements ("Severance
Agreements") with the Named Executive Officers (excluding Howard S. Stern)
and certain other executive officers and key employees ("Executives").
Each Severance Agreement provides certain security to the Executives
in connection with a change of control. A change of control ("Change of
Control") is defined as the acquisition of 50% or more of the outstanding
voting power of all capital stock of the Company; or the transfer of all or
substantially all of the assets of either or both of the AngioDynamics or
Contrast Systems business segments. Upon a Change of Control, all
outstanding stock options vest and remain exercisable until the original
expiration date of such options without regard to the need to remain
employed by the Company. The Company will provide the Executive (or his
estate) with an interest-free loan in the amount necessary to pay the
exercise price and the income and employment taxes due as a result of the
option exercise.
If an Executive's employment with the Company is terminated by the
Company for good cause (as defined below), death or disability, or by the
Executive other than for good reason (as defined below), during the term of
the Severance Agreement and within two years following a Change of Control,
the Executive shall be entitled to accrued but unpaid base salary.
A termination of employment is for good cause ("Good Cause") under the
Severance Agreements if the basis of termination is (i) repeated acts or
serious omissions constituting dishonesty, intentional breach of fiduciary
obligation or intentional wrongdoing or malfeasance; (ii) conviction of a
crime involving fraud, dishonesty or moral turpitude; or (iii) a material
breach of the Security Agreement.
Good reason ("Good Reason") exists under the Severance Agreements if
there is (i) a significant reduction in the nature or the scope of the
Executive's authority and/or responsibility; (ii) a material reduction in
the Executives rate of base salary; (iii) a significant reduction in
employee benefits; or (iv) a change in the principal location in which the
Executive is required to perform services, which significantly increases
commuting distance.
If an Executive's employment with the Company is terminated by the
Company without Good Cause or by the Executive for Good Reason, during the
term of the Severance Agreement and within two years following a Change of
Control, the Executive shall be entitled to: (i) accrued but unpaid base
salary; (ii) a lump sum payment equal to between one and two times annual
base salary, based upon years of service; (iii) any benefits accrued under
any incentive and retirement plans; (iv) paid medical plan coverage until
the earlier of 18 months from termination or the time when the Executive
obtains comparable coverage through a new employer; (v) a lump sum payment
equal to the unvested portion, if any, of the Executive's 401(k) plan; and
(vi) outplacement and career counseling services.
Each Severance Agreement provides that if any amounts due to an
Executive thereunder become subject to the "golden parachute" rules set
forth in Section 4999 of the Internal Revenue Code, then such amounts will
be reduced to the extent necessary to avoid the application of such rules.
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COMPENSATION AND STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
General
The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and
key employees. Howard S. Stern and Donald A. Meyer are the members of the
Compensation Committee.
Compensation Philosophy
The Compensation Committee's executive compensation philosophy is to
base management's pay, in part, on the achievement of the Company's annual
and long-term performance goals by (a) setting levels of compensation
designed to attract and hold superior executives in a highly competitive
business environment, (b) providing incentive compensation that varies
directly with the Company's financial performance and individual initiative
and achievement contributions to such performance, (c) linking compensation
to elements which affect the Company's annual and long-term performance,
(d) evaluating the competitiveness of executive compensation programs based
upon information drawn from a variety of sources, and (e) establishing
salary levels and bonuses intended to be consistent with competitive
practice and level of responsibility, with salary increases and bonuses
reflecting competitive trends, the overall financial performance of the
Company, the performance of the individual executive and the contractual
arrangements that may be in effect with the individual executive.
Executive compensation consists of base salary, annual performance bonuses,
and stock options.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), prohibits a publicly held corporation, such as the Company, from
claiming a deduction on its federal income tax return for compensation in
excess of $1 million paid for a given fiscal year to the chief executive
officer (or person acting in that capacity) or to the four most highly
compensated officers of the corporation, other than the chief executive
officer, at the end of the corporation's fiscal year. The $1 million
compensation deduction limitation does not apply to "performance-based
compensation." The Company believes that any compensation received by
executive officers in connection with the exercise of options granted under
the 1983 Stock Option Plan will qualify as "performance-based
compensation." The Company has not established a policy with respect to
Section 162(m) of the Code because the Company has not and does not
currently anticipate paying compensation in excess of $1 million per annum
to any employee.
Base Salaries
Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive
marketplace for management talent, including a comparison of base salaries
for comparable positions at comparable companies. Annual salary
adjustments are determined consistent with the Company's compensation
policy by evaluating the competitive marketplace, the performance of the
Company, the performance of the executive particularly with respect to the
ability to manage growth of the Company, and any increased responsibilities
assumed by the executive.
Annual Performance Bonuses
The Company administers an Executive Incentive Bonus Plan (the "Bonus
Plan"), under which cash bonuses may be made to the CEO and President,
other corporate officers, and certain divisional personnel. The bonus pool
is determined at the beginning of each fiscal year based on budgeted
earnings for the year. The bonus pool is limited to an aggregate of 10% of
the annual pretax profit of the Company and its subsidiaries taken as a
whole. In general, individual bonus awards under the Bonus Plan are
determined as follows:
o 50% of such individual award is based on the attainment by the
Company of certain pretax profit level goals which are approved in
advance by the Board of Directors ("Profit Objectives");
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o 50% of such individual award is based on the attainment of
individual objectives (an "MBO") which have been proposed,
evaluated, and approved at the beginning of each fiscal year by the
Compensation Committee in the case of the CEO and President, and by
Mr. Martin, the President and CEO, in the case of all other
participants.
A bonus may be awarded if either the Profit Objective or the
individual MBO has been met, as determined by the Compensation Committee in
the case of the CEO and President, and by Mr. Martin, in the case of all
other participants. The Company did not award bonuses to corporate
officers under the Bonus Plan for the 1997 Fiscal Year.
Stock Option Agreements
Long-term compensation awards are granted pursuant to the stockholder
approved stock option plans. The use of stock options ensures that the
interest of the Company's executive officers are tied to the interest of
the Company's stockholders by making a portion of the executive's long-term
compensation dependent upon the value created for stockholders. Options
are granted at an exercise price equal to the fair market value of the
Company's Class B Common Stock on the date of the grant. The Committee
considers the amount of stock options previously granted to each officer,
as well as the officer's current performance and contribution to the
Company when determining the size of an option grant.
Compensation of Chief Executive Officer
During the 1997 Fiscal Year, no options were granted to Mr. Martin. No
options previously granted were exercised by Mr. Martin. During the 1997
Fiscal Year, the base salary for Mr. Martin was not adjusted and remained
at $230,000. Based upon the reported 1997 Fiscal Year profits of the
Company, Mr. Martin did not receive a cash bonus under the Bonus Plan.
Compensation of Directors
Directors, who are not employees of the Company, are entitled to
directors fees of $15,000 annually. Directors, who serve on committees of
the Company and who are not employees or consultants of the Company, are
entitled to a fee of $500 for each committee meeting attended, except that
the chairman of a committee is entitled to a fee of $1,000 for each
committee meeting attended.
Common Stock Performance
On October 27, 1992 (the "Recapitalization Date"), the Company
effected a recapitalization which was accomplished by a one-for-two reverse
stock split of the then existing common stock of the Company (the "Old
Common Stock"), and the reclassification of the Old Common Stock as voting
Class A Common Stock. In addition, a dividend of one share of new
nonvoting Class B Common Stock was paid on each share of Class A Common
Stock.
The following graph provides a comparison of the cumulative total
return of (i) the Company's Old Common Stock and its Class A Common Stock
after its creation on the Recapitalization Date and (ii) the Class B Common
Stock after its creation on the Recapitalization Date, with returns on the
American Stock Exchange Market Value Index ("AMEX Market Value") and the
Standard and Poor's Medical Products and Supplies Index ("S&P Medical
Index"), for the five year period ended May 31, 1997. The total return of
the Class A Common Stock presented in the following graph treats all stock
dividends payable in Class B Common Stock as cash dividends and assumes the
reinvestment of such dividends in Class A Common Stock. As prescribed by
the SEC, the measurements are indexed to a value of $100 at May 31, 1992,
and assume all dividends were reinvested.
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(GRAPH OMITTED - TO BE SUBMITTED UNDER SEPARATE COVER)
Total Return - Data Summary
Cumulative Total Return
-----------------------
5/92 5/93 5/94 5/95 5/96 5/97
---- ---- ---- ---- ---- ----
E-Z-EM, INC. - CLASS A (EZM.A) 100 77 63 60 187 112
E-Z-EM, INC. - CLASS B (EZM.B) 100(1) 100 74 72 231 137
AMEX MARKET VALUE (2) (IAMX) 100 111 112 125 155 157
S&P INDEX (IMDP) 100 81 76 112 153 190
Graph Produced by Research Data Group
_______________
(1) The Class B Common Stock was authorized and issued in October 1992.
(2) As of July 24, 1995 the Company's Common Stock commenced trading on the
American Stock Exchange ("AMEX") and ceased being quoted on NASDAQ.
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<PAGE>
CERTAIN TRANSACTIONS
A facility of the Company located in Westbury, New York is owned 27%
by Howard S. Stern, 25% by Betty S. Meyers, a principal shareholder, 2% by
other employees of the Company and 46% by unrelated parties, which includes
a 25% owner who manages the property. Aggregate rentals, including real
estate tax payments, were $145,000 during 1997. The lease term expired in
June 1996 and is currently being extended on a month-to-month basis.
The Company has engaged Paul S. Echenberg, a director of the Company,
both as a consultant and employee. Fees for such services, including fees
relating to attendance at directors' meetings, were approximately $333,000
during 1997.
The Company has engaged Michael A. Davis, M.D., a director of the
Company, for consulting services. Fees for such services were
approximately $107,000 during 1997.
PROPOSAL II RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors appointed Grant Thornton LLP, certified public
accountants, who were the Company's independent auditors for the 1997
Fiscal Year, as the Company's independent auditors for the 1998 Fiscal
Year. Although the selection of auditors does not require ratification,
the Board of Directors has directed that the appointment of Grant Thornton
LLP be submitted to the Stockholders for ratification due to the
significance of their appointment to the Company.
The approval of the proposal to ratify the appointment of Grant
Thornton LLP requires the affirmative vote of a majority of the votes cast
by all Stockholders represented and entitled to vote thereon. Therefore,
an abstention, withholding of authority to vote or broker non-vote will not
have the same legal effect as an "against" vote and will not be counted in
determining whether the proposal has received the required shareholder
vote.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE 1998 FISCAL YEAR.
ANNUAL REPORT
All stockholders of record as of the Record Date, have been sent, or
are concurrently herewith being sent, a copy of the Company's 1997 Annual
Report for the 1997 Fiscal Year.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE 1997 FISCAL YEAR (WITHOUT
EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY WRITING
TO STOCKHOLDER INFORMATION, E-Z-EM, INC., 717 MAIN STREET, WESTBURY, NEW
YORK 11590-5021.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next Annual Meeting of Stockholders of
the Company, stockholder proposals for such meeting must be submitted to
the Company no later than May 1, 1998.
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OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
other than those set forth herein which will be presented for consideration
at the Meeting. If any other matter or matters are properly brought before
the Meeting or any adjournment thereof, the persons named in the
accompanying Proxy will have discretionary authority to vote, or otherwise
act, with respect to such matters in accordance with their judgment.
PETER J. GRAHAM
Secretary
September 30, 1997
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
E-Z-EM, INC.
Proxy--Annual Meeting of Stockholders
October 21, 1997
The undersigned, a stockholder of Class A Common Stock, $.10 par value
(the "Class A Common Stock") of E-Z-EM, Inc., a Delaware corporation
(the "Company"), does hereby appoint Howard S. Stern and Daniel R. Martin,
and each of them, the true and lawful attorneys and proxies with full power
of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Class A Common Stock of the Company which the
undersigned would be entitled to vote if personally present at the
1997 Annual Meeting of Stockholders of the Company to be held at the
Milleridge Inn in Jericho, New York, on Tuesday, October 21, 1997, at 10:00
a.m., Local Time, or at any adjournment or adjournments therof.
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.
1. ELECTION OF DIRECTORS
For James L. Katz, Daniel R. Martin and Michael A. Davis as Class
I directors:
TO WITHHOLD AUTHORITY TO VOTE
WITHHOLD FOR ANY NOMINEE(S), PRINT
FOR ________ VOTE ________ NAME(S) BELOW
_____________________________
2. RATIFICATION OF APPOINTMENT OF AUDITORS
FOR ________ AGAINST _________ ABSTAIN ________
To transact such other business as may properly come before the meeting or
any adjournment thereof.
Please mark, date and sign exactly as your name appears on this Proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title. If the holder is a corporation or partnership, the full
corporate or partnership name should be signed by a duly authorized
officer.
Signature ____________________ Signature ____________________ Date ________
