SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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E-Z-EM, Inc.
(Name of Registrant as Specified In Its Charter)
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E-Z-EM, INC.
1111 Marcus Avenue
Lake Success, New York 11042
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
I am pleased to give you notice that the 2003 Annual Meeting of
Stockholders of E-Z-EM, Inc. will be held at the Long Island Marriott, 101 James
Doolittle Boulevard, Uniondale, New York, on Tuesday, October 21, 2003 at 9:30
a.m., local time. At the annual meeting you will be asked to:
- approve the election of Michael A. Davis, James L. Katz and
Anthony A. Lombardo as Class I directors of the Company, each
for a term of three years (with the exception of Michael A.
Davis who has indicated his intention to resign from the board
of directors of the Company, but has agreed to remain a
director until an appropriate replacement has been found),
- ratify the appointment of Grant Thornton LLP as our independent
auditors for the fiscal year ending May 29, 2004,
- vote on a stockholder proposal to urge the board of directors
to allow a stockholder vote regarding the establishment of a
retroactive 18-year term limit for directors, and
- transact such other business as may properly come before the
meeting.
The board of directors has fixed the close of business on September 12,
2003 as the record date for the annual meeting. Only stockholders of record of
the Company's common stock on the Company's stock transfer books on the close of
business on that date are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
PETER J. GRAHAM, Secretary
Lake Success, New York
Dated: September 22, 2003
Whether or not you expect to be present at the meeting, you are urged
to fill in, date, sign and return the enclosed proxy card in the envelope that
is provided, which requires no postage if mailed in the United States.
If you wish to attend the annual meeting, please check the appropriate
box on the enclosed proxy card and return it in the enclosed envelope.
The annual meeting for which this notice is given may be adjourned from
time to time without further notice other than announcement at the meeting or
any adjournment thereof. Any business for which notice is hereby given may be
terminated at any such adjourned meeting.
E-Z-EM, INC.
1111 Marcus Avenue
Lake Success, New York 11042
_______________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 21, 2003
_______________________
INTRODUCTION
This proxy statement is being furnished to the stockholders of E-Z-EM,
Inc., a Delaware corporation (the "Company"), by the board of directors of the
Company in connection with the solicitation of proxies for use at the 2003
Annual Meeting of Stockholders of the Company to be held at the Long Island
Marriott, 101 James Doolittle Boulevard, Uniondale, New York, on Tuesday,
October 21, 2003 at 9:30 a.m., local time, or at any adjournment or postponement
thereof.
The principal executive offices of the Company are located at 1111
Marcus Avenue, Lake Success, New York 11042. The approximate date on which this
proxy statement and the accompanying proxy are first being sent or given to
stockholders is September 22, 2003.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. Our Securities
and Exchange Commission filings are available to the public over the Internet at
the Securities and Exchange Commission's website at www.sec.gov. You may also
read and copy any document we file with the Securities and Exchange Commission
at the Securities and Exchange Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1- 800-SEC-0330 for further information on the public reference
room. We maintain a website at www.ezem.com. The information contained in our
website is not incorporated in this proxy statement by reference and you should
not consider it a part of this proxy statement.
You may request a copy of our recent Securities and Exchange Commission
filings, at no cost, by writing or telephoning us at the following address and
telephone number:
Stockholder Information
E-Z-EM, Inc.
1111 Marcus Avenue
Lake Success, New York 11042
Telephone: (516) 333-8230
If you would like to request documents, including any documents we may
subsequently file with the Securities and Exchange Commission before the annual
meeting, please do so by October 7, 2003 so that you will receive them before
the annual meeting.
TABLE OF CONTENTS
PAGE
----
INTRODUCTION.........................................................................................-i-
WHERE YOU CAN FIND MORE INFORMATION..................................................................-i-
THE STOCKHOLDER MEETING..............................................................................-1-
Date, Time and Place........................................................................-1-
Proposals To Be Considered..................................................................-1-
Record Date; Voting Securities..............................................................-1-
Votes Required..............................................................................-2-
Share Ownership of Management and Certain Stockholders......................................-2-
Voting of Proxies...........................................................................-2-
Revocability of Proxies.....................................................................-3-
Solicitation of Proxies.....................................................................-3-
ELECTION OF DIRECTORS................................................................................-4-
Nominees ...................................................................................-4-
Recommendation of the Board of Directors....................................................-5-
Other Directors.............................................................................-5-
Meetings ...................................................................................-6-
Compensation of Directors...................................................................-7-
Executive Officers..........................................................................-8-
EXECUTIVE COMPENSATION..............................................................................-10-
Summary Compensation Table.................................................................-10-
Option/SAR Grants Table....................................................................-11-
Aggregated Option Exercises and Fiscal Year-End Option Value Table.........................-11-
Long-Term Incentive Plan Awards Table and Defined Benefit or Actuarial Plan Table..........-12-
Employment Contracts.......................................................................-12-
Severance Arrangements.....................................................................-12-
Report on Repricing of Options / SARs......................................................-13-
Compensation Committee Interlocks and Insider Participation in Compensation Decisions......-13-
Audit Committee Report.....................................................................-13-
Principal Accountant Fees and Services.....................................................-15-
Compensation and Stock Option Committee Report on Executive Compensation...................-15-
Security Ownership.........................................................................-18-
Equity Compensation Plan Information.......................................................-21-
Common Stock Performance Graph.............................................................-21-
Certain Relationships and Related Transactions.............................................-24-
Section 16(a) Beneficial Ownership Reporting Compliance....................................-25-
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.................................................-26-
General....................................................................................-26-
Recommendation of the Board of Directors...................................................-26-
STOCKHOLDER PROPOSAL RELATING TO THE ESTABLISHMENT OF A RETROACTIVE
18-YEAR TERM LIMIT FOR DIRECTORS....................................................................-26-
Stockholder Proposal.......................................................................-26-
Recommendation of the Board of Directors...................................................-27-
ii
ANNUAL REPORT.......................................................................................-28-
STOCKHOLDER PROPOSALS...............................................................................-28-
OTHER MATTERS.......................................................................................-29-
iii
THE STOCKHOLDER MEETING
Date, Time and Place
This proxy statement is being furnished to you in connection with the
solicitation of proxies by the board of directors of E-Z-EM, Inc. from holders
of E-Z-EM's common stock for use at the annual meeting of stockholders to be
held at the Long Island Marriott, 101 James Doolittle Boulevard, Uniondale, New
York, on October 21, 2003 at 9:30 a.m., local time, and at any adjournments or
postponements of the annual meeting.
Proposals To Be Considered
At the annual meeting, we will ask holders of our common stock to
consider and vote upon the following items:
Election of Directors
The election of three of the Company's nine directors. If elected, two
of the board's nominees for Class I director, James L. Katz and Anthony A.
Lombardo, will each serve until the 2006 annual meeting of stockholders or until
their respective successors are duly elected and qualified. The remaining Class
I director, Michael A. Davis, has indicated his intention to resign from the
board of directors of the Company prior to the 2006 annual meeting of
stockholders, but has agreed to remain a director until an appropriate successor
has been found.
Ratification of Appointment of Independent Auditors
Ratification of the appointment of Grant Thornton LLP as the
independent auditors for the Company for the fiscal year ending May 29, 2004.
Stockholder Proposal
A stockholder proposal to urge the board of directors to allow a
stockholder vote regarding the establishment of a retroactive 18-year term limit
for directors.
Record Date; Voting Securities
As of the close of business on September 12, 2003, there were
10,255,410 outstanding shares of the Company's common stock entitled to notice
of and to vote at the annual meeting. Holders of our common stock have one vote
per share on each matter to be acted upon. Only stockholders of record at the
close of business on the record date for the annual meeting will be entitled to
vote at the meeting and at any adjournment or postponement thereof. A majority
of the outstanding shares of common stock present in person or by proxy is
required to constitute a quorum at the meeting. For purposes of determining the
presence of a quorum for transacting business at the annual meeting, abstentions
and broker "non-votes" (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.
Votes Required
Election of Directors
The directors nominated for election will be elected by a plurality of
the votes cast, in person or by proxy, at the annual 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 annual meeting for the purpose
of electing directors.
Ratification of the Appointment of Independent Auditors
The proposal to ratify the board's appointment of Grant Thornton LLP as
the Company's independent auditors for the fiscal year ending May 29, 2004 must
be approved by the affirmative vote of a majority of the votes cast at the
annual meeting. For the purposes of this vote, a vote to abstain and a broker
non-vote will each have no effect since they will not represent votes cast at
the annual meeting for the purpose of this proposal.
Stockholder Proposal
The stockholder proposal to urge the board of directors to allow a
stockholder vote regarding the implementation of a retroactive 18-year term
limit for directors must be approved by the affirmative vote of a majority of
the votes cast at the annual meeting. For the purposes of this vote, a vote to
abstain and a broker non-vote will each have no effect since they will not
represent votes cast at the annual meeting for the purpose of this proposal.
Share Ownership of Management and Certain Stockholders
As of the record date, directors and executive officers of the Company
beneficially owned (excluding currently exercisable options) an aggregate of
approximately 3,413,924 shares of our common stock, representing 33.3% of the
common stock issued and outstanding and 33.3% of the Company's voting power.
The Company's directors and executive officers have indicated that they
intend to vote their shares FOR the election of the nominees for director, FOR
the ratification of the appointment of Grant Thornton LLP as the Company's
independent auditors for the 2004 fiscal year and AGAINST the stockholder
proposal urging the board of directors to allow a stockholder vote regarding
implementation of a retroactive 18-year term limit for directors.
Voting of Proxies
Shares of our common stock will be voted in accordance with the
instructions contained therein. If no specification is indicated on the proxy,
the shares of common stock represented thereby will be voted:
o FOR the election as directors of the persons who have been
nominated by the board of directors;
-2-
o FOR the ratification of the appointment of Grant Thornton LLP
as the Company's independent auditors for the fiscal year
ending May 29, 2004;
o AGAINST the stockholder proposal urging the board of directors
to allow a stockholder vote regarding implementation of a
retroactive 18-year term limit for directors; and
o with respect to any other matter that may properly be brought
before the annual meeting in accordance with the judgment of
the person or persons voting. It is not expected that any
matter other than as described in this proxy statement will be
brought before the annual meeting.
Revocability of Proxies
The grant of a proxy on the enclosed proxy card does not preclude a
stockholder from voting in person. You may revoke a proxy at any time prior to
your proxy being voted at the annual meeting by:
o delivering to the Secretary of the Company, prior to the annual
meeting, a written notice of revocation bearing a later date or
time than the proxy,
o submitting another proxy by mail that is later dated and, if
applicable, that is properly signed, or
o attending the annual meeting and voting in person.
Attendance at the annual meeting will not by itself constitute
revocation of a proxy. If an adjournment occurs, it will have no effect on the
ability of stockholders of record as of the record date to exercise their voting
rights or to revoke any previously delivered proxies. E-Z-EM does not expect to
adjourn the annual meeting for a period of time long enough to require the
setting of a new record date for such meeting.
Solicitation of Proxies
The cost of solicitation of 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, facsimile and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding common stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
Stockholders should not send stock certificates with their proxy cards.
-3-
ELECTION OF DIRECTORS
Nominees
The Company's board of directors currently consists of nine directors.
The board is classified into three classes, each of which has a staggered
three-year term. At the annual meeting, the stockholders will elect three Class
I directors. If elected, Michael A. Davis, James L. Katz and Anthony A. Lombardo
will hold office until the annual meeting of stockholders to be held in 2006 and
until their successors are duly elected and qualified. Michael A. Davis has
indicated that he intends to resign from the board of directors of the Company
prior to the 2006 annual meeting of stockholders, but will remain a director
until an appropriate successor has been found. 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 nominees named below as directors of the Company. Directors will be
elected by a plurality of the votes cast, in person or by proxy, at the annual
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
annual meeting for the purpose of electing directors.
The term of each of the current Class I directors expires at the annual
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 annual 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
Name Principal Occupation Age Became Director
---- -------------------- --- ---------------
Michael A. Davis Medical Director of the Company 62 1995
James L. Katz CEO of Lakeshore Medical Fitness, LLC 67 1983
Anthony A. Lombardo President and CEO of the Company 56 2000
Michael A. Davis, M.D., age 62, has served as Medical Director of the
Company since 1994, a director of the Company since 1995, and Technical Director
of the Company from 1997 to 2000. Dr. Davis was a Visiting Professor of
Radiology at Harvard Medical School and Visiting Scientist in Radiology at
Massachusetts General Hospital from 2002 until May 2003. He also served as
Senior Vice President and Chief Medical Officer of MedEView, Inc. (radiology
informatics) from 2000 until February 2003. He was Professor of Radiology and
Nuclear Medicine and Director of the Division of Radiologic Research, University
of Massachusetts Medical Center from 1980 until 2002. During 1999, he also
served as the President and Chief Executive Officer, and from 1999 until April
2003, he served as a director of Amerimmune Pharmaceuticals, Inc. and its
wholly-owned subsidiary, Amerimmune, Inc. He is also a director of MacroChem
Corp.
-4-
James L. Katz, CPA, JD, age 67, has been a director of the Company
since 1983. He is a founder of Lakeshore Medical Fitness, LLC (owns and manages
medical fitness facilities), and has served as its Chief Executive Officer since
2000. He is also a founder of Medical Imaging of Northbrook Court, LLC
(screening and diagnostic imaging), and has served as an administrative member
since 2001. Previously, he had been a founder and managing director from its
organization in 1995 until 2000 of Chapman Partners LLC (investment banking).
From its acquisition in 1985 until its sale in 1994, he was the co-owner and
President of Ever Ready Thermometer Co., Inc. From 1971 until 1980 and from 1983
until 1985, he held various executive positions with Baxter International and
subsidiaries of Baxter International, principally that of Chief Financial
Officer of Baxter International. He is also a director of Intec, Inc., Lakeshore
Management Group, LLC and Lifestart Wellness Network, LLC, as well as a member
of the Board of Advisors of Jerusalem Global and AEG Partners.
Anthony A. Lombardo, age 56, has served as President, Chief Executive
Officer and director of the Company since 2000. Prior to joining the Company, he
served as President of ALI Imaging Systems, Inc. (radiology information
management) from 1998 to 2000. From 1996 to 1998, Mr. Lombardo served as Global
Manager of the Integrated Imaging Systems business of General Electric Medical
Systems. Mr. Lombardo is also a director of PointDx, Inc. The Company has an
investment in PointDx, Inc.
Recommendation of the Board of Directors
The board of directors recommends a vote for the election of each of
the nominees.
Other Directors
The following Class II and III directors will continue on the board of
directors for the terms indicated:
Class II Directors (Term Expiring in 2004):
Paul S. Echenberg, age 59, 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 has been the President, Chief Executive Officer and a director of Schroders
& Associates Canada Inc. (investment buy-out advisory services) and a director
of Schroders Ventures Ltd. since 1997. He is also a founder and has been a
general partner and a director of Eckvest Equity Inc. (personal investment and
consulting services) since 1989. He is also a director of Lallemand Inc.,
Benvest Capital Inc., Colliers MacAuley Nicholl, ITI Medical Technologies,
Inc., Flexia Corp., Fib-Pak Industries Inc., Med-Eng Systems Inc., MacroChem
Corp., Matra Plast Industries Inc. and A.P. Plasman Corp. The Company has an
investment in ITI Medical Technologies, Inc.
Donald A. Meyer, age 69, has been a director of the Company since 1968.
Since 1995, he has acted as 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.
He is also a director of Santa Fe Railyard Community Corporation, Santa Fe
Stages and Santa Fe Youth Symphony.
-5-
Robert J. Beckman, age 55, has been a director of the Company since
August 2002. He is a founder and has been a Managing Partner of The Channel
Group, a venture management and corporate advisory business focusing on global
life sciences, since 2002. Previously, he founded Intergen Co., a global leader
focused on providing technology and biologicals to thepharmaceutical/
biotechnology and clinical diagnostic industries, and served as
its Chief Executive Officer from 1987 until 2001.
Class III Directors (Term Expiring in 2005):
Howard S. Stern, age 72, 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. Mr. Stern has also served as President and Chief Executive Officer of the
Company from 1997 to 2000. From 1990 to 1994, Mr. Stern served as Chief
Executive Officer, and from the formation of the Company until 1990, he served
as President and Chief Executive Officer. Mr. Stern is also a director of ITI
Medical Technologies, Inc. The Company has an investment in ITI Medical
Technologies, Inc.
David P. Meyers, age 39, has been a director of the Company since 1996.
He is a founder of AlphaCord, Inc., which provides cryopreservation of umbilical
cord blood, and has served as its President since 2002. Previously, he founded
MedTest Express, Inc., an Atlanta, Georgia based provider of contracted
laboratory services for home health agencies, and served as its President, Chief
Executive Officer and a director from 1994 to September 2002.
George P. Ward, age 65, has been a director of the Company since August
2002. He has served as Executive Vice President - Business Development of Health
Center Internet Services, Inc. in San Francisco, California from 1997 until
2001. He served as a director and consultant for ALI Technologies, Inc. of
Richmond, British Columbia, Canada from 1996 until July 2002. After service as a
USAF officer, he began his career as a rocket engineer with Thiokol Chemical
Corp. in 1962, then joined the General Electric Space Division as a program
manager and marketing manager in 1966. After a GE corporate headquarters
assignment in 1973, Mr. Ward moved to the GE Medical Business, where he managed
the X-ray and other medical imaging businesses. In 1977, he became President,
CEO and a director of Systron Donner Corp., Concord, California (then NYSE). In
1982, he became President, CEO and a director of Vitalink Communications Corp.,
Mountain View, California, and in 1986, he founded MEICOR, Inc., Pleasanton,
California, as Chairman, CEO and a director. From 1987 until 1991, he was a
World Wide Business Group Managing Director for Philips Medical, and since 1991,
a director/consultant for several high technology companies. He also was a
director of Blue Cross of California, Woodland Hills, California from 1986 to
1996.
Meetings
The board of directors held four regular meetings, one special meeting
and two meetings by conference call during the 2003 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. No director attended fewer than
75% of all board meetings during the 2003 fiscal year.
The Company has a standing Executive Committee, Audit Committee,
Nominating Committee, Compensation Committee and Finance Committee.
-6-
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, Echenberg and Katz. The
Executive Committee did not meet during the 2003 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, Echenberg and Ward. The
Audit Committee met four times during the 2003 fiscal year and had several
informal discussions.
The Nominating Committee evaluates current and future directors and
their qualifications to serve on the Company's board of directors and recommends
to the board nominees for election to the board. The Nominating Committee will
consider nominees for directors recommended by stockholders upon submission in
writing to the Secretary of the Company of the names of such nominees, together
with their qualifications for service with the Company. The members of the
Nominating Committee are Messrs. Stern, Lombardo, Meyer and Meyers. The
Nominating Committee did not meet during the 2003 fiscal year.
The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. 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. Meyer, Katz and Ward. The Compensation
Committee met five times during the 2003 fiscal year and had several informal
discussions.
The board of directors created a Finance Committee in 1995. Its members
are Messrs. Katz and Meyers. The Finance Committee did not meet during the 2003
fiscal year.
Compensation of Directors
On an annual basis, directors who are not employees of the Company are
entitled to the following compensation: a retainer of $15,000; a fee of $1,000
for each board meeting attended; a fee of $250 for each telephonic board meeting
attended; 1,000 shares of the Company's common stock; and stock options for
1,000 shares of common stock, which vest one year from date of grant. Directors
who serve on committees of the board and who are not employees of the Company
are entitled to a fee of $500 for each committee meeting attended and a fee of
$250 for each telephonic committee meeting attended, except that the chairman of
a committee is entitled to a fee of $1,000 for each committee meeting attended
and $500 for each telephonic committee meeting attended. The Chairman of the
Board is entitled to twice the above-referenced fees. In addition, directors who
attend board meetings of AngioDynamics and who are not directors of
AngioDynamics are entitled to the Company meeting fee of $1,000 for each board
meeting attended. During 2003, the three members of the special committee formed
to evaluate the recapitalization of the Company completed in October 2002,
Messrs. Katz, Meyer and Echenberg, each received an additional fee of $15,000 in
consideration for their services. Directors who are employees of the Company do
not receive any compensation for their services as directors.
-7-
Executive Officers
The following table sets forth certain information with respect to the
Company's executive officers.
Name Age Positions
---- --- ---------
Anthony A. Lombardo 56 President, Chief Executive Officer, Director
Dennis J. Curtin 56 Senior Vice President - Chief Financial Officer
Eamonn P. Hobbs 45 Senior Vice President - AngioDynamics
Joseph J. Palma 61 Senior Vice President - Global Sales
Jeffrey S. Peacock 46 Senior Vice President - Global Scientific and
Technical Operations
Brad S. Schreck 46 Senior Vice President - Global Marketing
Arthur L. Zimmet 67 Senior Vice President - Special Projects
Sandra D. Baron 51 Vice President - Global Human Resources
Robert M. Bloomfield 62 Vice President - Market Research
Craig A. Burk 50 Vice President - Manufacturing
Joseph A. Cacchioli 47 Vice President - Controller
Agustin V. Gago 44 Vice President - Global Contrast Business Unit
Peter J. Graham 37 Vice President - General Counsel and Secretary
Archie B. Williams 52 Vice President - Clinical Affairs and Medical
Community Liaison
Officers are elected annually and serve at the pleasure of the board of
directors.
Mr. Curtin has served as Senior Vice President - Chief Financial
Officer since 1999, and previously served as Vice President - Chief Financial
Officer from 1985 to 1999. Mr. Curtin has been an employee of the Company since
1983.
Mr. Hobbs has served as Senior Vice President - AngioDynamics since
October 2002, and previously served as Vice President - AngioDynamics from 1991
until October 2002. Mr. Hobbs has been an employee of the Company since 1988.
Mr. Palma has served as Senior Vice President - Global Sales since
2002, and previously served as Senior Vice President - Sales and Marketing from
1999 to 2002, Vice President - Sales and Marketing from 1996 to 1999, and Vice
President - Sales from 1995 to 1996. Mr. Palma has been an employee of the
Company since 1994.
Mr. Peacock has served as Senior Vice President - Global Scientific and
Technical Operations since July 2002, and previously served as Vice President -
Scientific and Technical Operations from 2000 until July 2002. Mr. Peacock has
been an employee of the Company since 1986.
-8-
Mr. Schreck has served as Senior Vice President - Global Marketing
since 2002. Prior to joining the Company, he served as a consultant for Vyteris,
Inc. (pharmaceutical/drug delivery) and ACMI, Inc. (urology, gynecology,
laproscopy) from 2000 until 2002. From 1999 to 2000, he served as Vice
President, World Wide Marketing of Surgical Dynamics Inc., a wholly-owned
subsidiary of Tyco Inc. (spine/sports medicine). In 1999, he served as Vice
President, Marketing and Sales Services of Implex Inc. (orthopedics). From 1996
to 1999, he served as Vice President, Worldwide Marketing and Product
Development for Howmedica, a division of Pfizer (orthopedics).
Mr. Zimmet has served as Senior Vice President - Special Projects since
1988, and has been an employee of the Company since 1982.
Ms. Baron has served as Vice President - Global Human Resources since
August 2002, and previously served as Vice President - Human Resources from 1995
until August 2002. She has been an employee of the Company since 1985.
Mr. Bloomfield has served as Vice President - Market Research since
2000, and has been an employee of the Company since 1985.
Mr. Burk has served as Vice President - Manufacturing since 1987.
Mr. Cacchioli has served as Vice President - Controller since 1988, and
has been an employee of the Company since 1984.
Mr. Gago has served as Vice President - Global Contrast Business Unit
since 2002, and previously served as Vice President - International from 1997
until 2002. Mr. Gago has been an employee of the Company since 1979.
Mr. Graham has served as Vice President - General Counsel and Secretary
since 2001, and has been an employee of the Company since 1997.
Mr. Williams has served as Vice President - Clinical Affairs and
Medical Community Liaison since 2000, and previously served as Vice President -
Imaging Products Management from 1993 to 2000. Mr. Williams has been an employee
of the Company since 1980.
The business background of Mr. Lombardo has been previously set forth
in this proxy statement.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation
for services, in all capacities for 2003, 2002 and 2001, of (i) those persons
who were, during fiscal year 2003, Chief Executive Officer ("CEO") (Anthony A.
Lombardo), and (ii) those persons who were, at the end of fiscal year 2003, each
of the four most highly compensated executive officers of the Company other than
the CEO (collectively, with the CEO, the "Named Executive Officers"):
Annual Compensation Long-Term Compensation
---------------------------------- -----------------------------------------
Awards Payouts
---------------------------- ----------
Other Securities
Annual Restricted Underlying All Other
Name and Compensa- Stock Options LTIP Compensa-
Principal Fiscal Salary Bonus tion (1) Awards ----------------- Payouts tion (4)
Position Year ($) ($) ($) ($) # (2) #(3) ($) ($)
-------- ---- -------- ------ --------- ---------- ----- ---- ------- ----------
Anthony A. Lombardo.... 2003 $320,000 $46,560 None None None None None $ 9,773
President and Chief 2002 320,000 71,088 None None None None None 33,402
Executive Officer 2001 261,667 38,125 None None None None None 25,467
Eamonn P. Hobbs........ 2003 $240,000 $96,600 None None None None None $ 8,470
Senior Vice President 2002 218,820 114,880 None None None None None 22,760
2001 210,000 23,625 None None None .2273 None 22,384
Dennis J. Curtin....... 2003 $188,402 $31,541 None None None None None $10,164
Senior Vice President 2002 179,430 44,814 None None None None None 25,352
2001 170,917 11,424 None None None None None 25,167
Joseph J. Palma........ 2003 $176,776 $28,807 None None None None None $ 9,901
Senior Vice President 2002 169,488 30,669 None None None None None 30,683
2001 162,500 7,313 None None None None None 30,213
Brad S. Schreck........ 2003 $185,000 $20,098 None None None None None $481
Senior Vice President 2002 11,859 8,621 None None None None None None
(Effective May 2002) 2001 None None None None None None None None
__________
(1) The Company has concluded that the aggregate amount of perquisites and
other personal benefits paid to each of the Named Executive Officers for
fiscal years 2003, 2002 and 2001 did not exceed the lesser of 10% of such
officer's total annual salary and bonus for fiscal years 2003, 2002 or 2001
or $50,000; such amounts are, therefore, not reflected in the table.
(2) Options are exercisable into common stock of the Company.
(3) Options are exercisable into Class B common stock of AngioDynamics, Inc., a
wholly-owned subsidiary of the Company. A total of 162.79 shares of
AngioDynamics Class B common stock may be issued under this plan. A total
of 500 shares of Class A and 500 shares of Class B common stock of
AngioDynamics was issued and outstanding at May 31, 2003.
(4) For each of the Named Executive Officers, the amounts reported include
amounts contributed by the Company under its Profit-Sharing Plan and, as
matching contributions, under the companion 401(k) Plan. For 2003, 2002 and
2001, such amounts contributed were: $8,920, $9,375 and $1,333,
respectively, for Mr. Lombardo; $7,787, $9,115 and $8,479, respectively,
for Mr. Hobbs; $9,585, $8,315 and $8,015, respectively, for Mr. Curtin;
$9,356, $8,291 and $7,706, respectively, for Mr. Palma; and $0, $0 and $0,
respectively for Mr. Schreck.
For each of the Named Executive Officers, the amounts reported include term
life insurance premiums paid by the Company. For fiscal years 2003, 2002
and 2001, such amounts paid were: $853, $673 and $780, respectively, for
Mr. Lombardo; $683, $395 and $655, respectively, for Mr. Hobbs; $579, $409
and $524, respectively, for Mr. Curtin; $545, $392 and $507, respectively,
for Mr. Palma; and $481, $0 and $0, respectively, for Mr. Schreck.
For each of the Named Executive Officers, the amounts reported include
premiums paid by the Company under split dollar life insurance
arrangements ("arrangements"). For fiscal year 2003, no amounts were
paid by the Company under any split dollar life insurance arrangement.
For each of fiscal years 2002 and 2001, such amounts paid were:
$23,354 for Mr. Lombardo; $13,250 for Mr.
-10-
Hobbs; 5 $16,628 for Mr. Curtin; $22,000 for Mr. Palma; and $0 for Mr.
Schreck. During July 2003, such arrangements were modified. Under the
amended terms of the arrangements, title and ownership of the policies
were transferred to the Company and the Company will continue to pay
all insurance premiums. Upon the death of any Named Executive Officer,
such officer's beneficiaries will be entitled to a death benefit, the
amount of which was determined as of July 2003. The Company will be
entitled to the remaining life insurance proceeds. The Company will
also be entitled at all times to the cash surrender value of the life
insurance policies.
Option/SAR Grants Table
The Company did not grant any stock options or stock appreciation rights
to any of the Named Executive Officers during fiscal year 2003.
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table sets forth certain information concerning all
exercises of stock options during fiscal year 2003 by the Named Executive
Officers and the fiscal year-end value of unexercised stock options on an
aggregated basis:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
May 31, 2003 May 31, 2003
(#) ($) (1)
Shares ----------------- -----------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable (2) Unexercisable (2)
---- ------------ ------------ ----------------- -----------------
Anthony A. Lombardo............... None None 225,000/ None/
75,000 None
Eamonn P. Hobbs................... 6,955 $18,143 32,640/ $136,424/
None None
Dennis J. Curtin.................. None None 35,556/ $154,727/
None None
Joseph J. Palma................... None None 15,464/ $27,750/
None None
Brad S. Schreck................... None None 8,750/ None/
26,250 None
__________
(1) Options are "in-the-money" if on May 31, 2003, the market price of
the stock exceeded the exercise price of such options. At May 31,
2003, the closing price of the Company's common stock was $8.40. 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, 2003 and the aggregate exercise price of such
options.
(2) Options are exercisable into common stock of the Company.
-11-
Long-Term Incentive Plan Awards Table and Defined Benefit or
Actuarial Plan Table
The Company maintains no long-term incentive plans or defined benefit
or actuarial plans.
Employment Contracts
See "Certain Relationships and Related Transactions" for a description
of the consulting agreement between the Company and Howard S. Stern, the
Chairman of the Company's board.
During 2000, the Company entered into an employment contract with
Anthony A. Lombardo in his capacity as President and Chief Executive Officer.
This employment contract provides for annual base salary at $320,000. The
contract is cancelable at any time by either the Company or Mr. Lombardo, but
provides for severance pay of one year's base salary in the event of termination
by the Company without cause, as defined in the contract.
Severance Arrangements
The Company has entered into severance agreements with certain named
executive officers and certain other executive officers and key employees.
Each severance agreement provides certain security to the executive in
connection with a change of control. A 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 (E-Z-EM) 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. The Company is currently reviewing these arrangements in
light of the Sarbanes-Oxley Act of 2002.
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 under the severance
agreements if the basis of termination is (a) repeated acts or serious omissions
constituting dishonesty, intentional breach of fiduciary obligation or
intentional wrongdoing or malfeasance; (b) conviction of a crime involving
fraud, dishonesty or moral turpitude; or (c) a material breach of the severance
agreement or the conditions and requirements of employment.
Good reason exists under the severance agreements if there is (a) a
significant reduction in the nature or the scope of the executive's authority
and/or responsibility; (b) a material reduction in the executive's rate of base
salary; (c) a significant reduction in employee benefits; or (d) a change in the
principal location in which the executive is required to perform services, which
significantly increases commuting distance.
-12-
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: (a) accrued but unpaid base salary; (b) a
lump sum payment equal to between one and two times annual base salary, based
upon years of service; (c) any benefits accrued under any incentive and
retirement plans; (d) 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; (e) a lump sum payment equal to the unvested portion, if
any, of the executive's 401(k) plan; and (f) 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.
Report on Repricing of Options / SARs
In 2003, the Company did not adjust or amend the exercise price of any
stock options or SARs previously awarded to any of the Named Executive Officers.
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
The following directors serve on the Company's Compensation
Committee: James L. Katz, Donald A. Meyer and George P. Ward. None of these
persons was an officer or employee of the Company or any of its subsidiaries
during 2003, nor was formerly an officer or employee of the Company or any of
its subsidiaries. None of such directors had any relationship requiring
disclosure by the Company under Item 404 of Regulation S-K. Nevertheless, the
Company has disclosed its consulting arrangement with Mr. Meyer under "Certain
Relationships and Related Transactions".
Audit Committee Report
The audit committee of the board of directors is composed of three (3)
directors and operates under a written charter. Each member of the audit
committee is an independent director as such term is defined under the listing
standards of The American Stock Exchange.
As set forth in more detail in the audit committee's charter, as
previously filed with the SEC, management is responsible for the Company's
internal controls and financial operating system. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and issuing a report relating to this audit. The audit committee's
responsibility is to monitor and oversee these processes. The audit committee's
primary duties and responsibilities fall into three broad categories:
First, the audit committee will serve as an independent and objective
party to monitor the Company's financial reporting process and internal control
system;
Second, the audit committee is responsible for reviewing and
appraising the audit efforts of the Company's independent auditors; this
includes matters concerning the relationship between the Company and its
independent auditors, including recommending their appointment or removal,
-13-
reviewing the scope of their audit services and related fees, as well as any
other services being provided to the Company and determining whether the
auditors are independent (based in part on the annual letter provided to the
Company pursuant to Independence Standards Board Standard No. 1); and
Third, to provide an open avenue of communication among the independent
auditors, financial and senior management and the board of directors.
The audit committee has implemented procedures to ensure that during
the course of each fiscal year it devotes the attention that it deems necessary
or appropriate to each of the matters assigned to it under the audit committee's
charter. To carry out its responsibilities, the audit committee met four times
during fiscal year 2003 and had several informal discussions.
In overseeing the preparation of the Company's financial statements,
the audit committee met and held discussions with management and the independent
auditors. Management advised the audit committee that all financial statements
were prepared in accordance with generally accepted accounting principles. The
audit committee discussed with the independent auditors the matters required to
be discussed by the Statement on Auditing Standards ("SAS") No. 61,
"Communications with Audit Committees" and SAS No. 90, "Audit Committee
Communications."
The Company's independent auditors also provided the audit committee
with the written disclosures and the letter required by the Independence
Standards Board Standard No. 1, "Independence Discussions with Audit Committees"
and the audit committee has discussed with the independent auditors that firm's
independence.
Based upon the reviews and discussions referred to above, the audit
committee recommended to the board of directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 2003 and be filed with the U.S. Securities and
Exchange Commission.
This audit committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
this report therein.
THE AUDIT COMMITTEE,
James L. Katz, Chairman
Paul S. Echenberg
George P. Ward
-14-
Principal Accountant Fees and Services
The following table presents fees for professional audit services
rendered by the independent auditors, Grant Thornton LLP, for the audit of the
Company's financial statements for the fiscal years ended May 31, 2003 and June
1, 2002, and fees billed for other services rendered by Grant Thornton LLP
during those periods:
2003 2002
(in thousands)
Audit Fees $343 $309
Audit Related Fees(1) 71 38
Tax Fees(2) 53 104
All Other Fees(3) 98 -
---- ----
$565 $451
==== ====
__________
(1) Audit related fees consist primarily of profit sharing and 401(k) plan
audits, interpretation of accounting standards, procedures related to
registration statement filings and an SEC comment letter review.
(2) Tax fees include all tax services relating to tax compliance, tax
advice and tax planning.
(3) All other fees consist primarily of services in assisting with business
modeling for a foreign subsidiary product line and the recruiting of
non-managerial personnel for a subsidiary of the Company .
The audit committee understands the need for Grant Thornton LLP to
maintain objectivity and independence in its audit of the Company's financial
statements and has implemented procedures, including pre-approval of all
non-audit services, to minimize any relationship with Grant Thornton LLP which
could impair their independence. The committee has determined that the
engagement of Grant Thornton LLP to provide non-audit services should only be
used when the services offered by Grant Thornton LLP are more effective and
economical than the services from other providers, and, to the extent possible,
only after competitive bidding. The audit committee has considered the
compatibility of the Audit Related Fees, Tax Fees and All Other Fees paid to
Grant Thornton LLP in connection with Grant Thornton LLP's independence.
Compensation and Stock Option Committee Report on Executive Compensation
General
The compensation committee of the board of directors determines the
cash and other incentive compensation, if any, to be paid to the Company's
executive officers and key employees, and administers the Company's stock
option plans. The compensation committee is currently composed of three
non-employee directors: Donald A. Meyer, James L. Katz and George P. Ward.
Compensation Philosophy
The primary philosophy of the Company regarding compensation to
executive officers is to offer a program which rewards each member of
senior management commensurately with the Company's overall growth and
financial performance, including each person's individual
-15-
performance during the previous fiscal year. The three primary components
of executive compensation are base salary, annual performance bonus and
stock option awards. The committee believes that this three-part approach
enables the Company to remain competitive with its industry peers while
ensuring that senior management are appropriately incentivised to deliver
positive short- term results while creating sustainable long-term
stockholder value.
The key elements of the compensation committee's executive compensation
philosophy include (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.
In determining each executive's overall compensation, the compensation
committee has relied, in part, on executive compensation surveys, publicly
available information, informal survey information obtained by management, and
information known to various members of the board of directors. The committee
has also periodically sought the assistance of independent executive
compensation consultants who have provided information and data on the
compensation levels and philosophies adopted by other companies in the same
market for executive talent. In particular, the independent consultants have
compared the Company's total compensation program, which includes base salary,
annual bonus pay and stock option awards, with programs offered by other
companies of comparable size in the medical and healthcare industries.
Internal Revenue Code Section 162(m) Considerations
Section 162(m) of the Internal Revenue 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)
and to the four most highly compensated officers of the Company other than the
chief executive officer as of the end of the corporation's fiscal year (the
"Named Executive Officers"). The $1 million compensation deduction limitation
does not apply to "performance based compensation within the meaning of Section
162(m)." The Company believes that any compensation received by the Named
Executive Officers in connection with the exercise of options granted under the
1983 Stock Option Plan will qualify as "performance based compensation", except
for a certain de minimis option grant awarded in 1996. Stock options issued
pursuant to the Company's AngioDynamics subsidiary 1997 Stock Option Plan will
not 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
paid, and does not currently anticipate paying, annual compensation in excess of
$1 million to any employee.
-16-
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 executive's ability to manage growth of the
Company - and any increased responsibilities assumed by the executive.
Annual Incentive Compensation
The Company administers an Annual Incentive Bonus Plan ("AIP"), under
which cash bonuses may be made to the CEO and President, other corporate
officers, and certain other employees. At the beginning of each fiscal year, the
goals for the Company and each individual are established. During each fiscal
year, the level of bonus earned, if any, is dependent upon the Company's
financial results as compared to budget and the individual's achievement of his
or her personal goals. A bonus may be awarded if certain performance objectives,
including corporate, business unit and departmental goals, have been met, as
determined by the compensation committee. The Company awarded bonuses ranging up
to 40.3% of base salary to corporate officers under the bonus plan for the 2003
fiscal year.
Stock Option Agreements
The compensation committee views stock options as an important
long-term incentive vehicle for its executive officers. The use of stock options
ensures that the interests of the Company's executive officers are tied to the
interests of the Company's stockholders by making a portion of the executive's
long-term compensation dependent upon the value created for stockholders. This
promotes a continuing focus on the Company's profitability and stockholder
value. The compensation committee may grant options under the Company's
stockholder-approved stock option plans. Options are granted at an exercise
price equal to the fair market value of the Company's common stock on the date
of grant. Optionees can receive value from stock option grants only if the
underlying common stock appreciates in the long-term. Generally, stock options
utilize vesting periods ranging from two to nine years to encourage key
executives to continue in the employ of the Company. In determining long-term
incentive awards, the compensation committee considers the amount of stock
options previously granted to each officer, the officer's responsibilities, as
well as the officer's current performance and contribution to the Company.
Compensation of the Chief Executive Officer
The compensation committee has targeted Mr. Lombardo's total
compensation, including compensation derived from awards of stock options,
at a level it believes is competitive with the average amount paid by the
Company's competitors and companies with which the Company competes for
executive talent. During the 2003 fiscal year, Mr. Lombardo's base salary
was increased to $320,000. During the 2003 fiscal year, no options were
granted to Mr. Lombardo and no options previously granted to Mr. Lombardo
were exercised. Pursuant to the employment
-17-
contract between Mr. Lombardo and the Company, Mr. Lombardo participates in
the Company's AIP program and received a bonus of $46,560 for the 2003
fiscal year.
This compensation committee and stock option committee report shall not
be deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act or the
Exchange Act, except to the extent that the Company specifically incorporates
this report therein.
THE COMPENSATION COMMITTEE,
Donald A. Meyer, Chairman
James L. Katz
George P. Ward
Security Ownership
The following table sets forth information, as of the record date, as
to the beneficial ownership of the Company's common stock, by (i) each person
known by the Company to own beneficially more than 5% of the Company's common
stock, (ii) each of the Company's directors, (iii) each of the Company's Named
Executive Officers, and (iv) all directors and executive officers of the Company
as a group:
Name and Address of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class
---------------- ---------------------- --------
Howard S. Stern.................................... 2,076,199 (2) 20.2
Chairman of the Board, Director
23 Willets Road
Old Westbury, NY 11568
David P. Meyers ................................... 765,097 (3)(4)(8) 7.5
Director
813 Springdale Road
Atlanta, GA 30306
Stuart J. Meyers................................... 695,624 (3)(5)(8) 6.8
1841 Vermack Court
Dunwoody, GA 30338
Jonas I. Meyers.................................... 601,319 (3)(6)(8) 5.9
904 Oakland Avenue
Ann Arbor, MI 48104
Meyers Family Limited Partnership ................. 1,684,550 (3)(7)(8) 16.4
c/o David P. Meyers
1534 North Decatur Road, Suite 202
Atlanta, GA 30307
Ira Albert......................................... 800,042 (9) 7.8
1304 SW 160th Avenue
Suite 209
Ft. Lauderdale, FL 33326
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Name and Address of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class
---------------- ---------------------- --------
Wellington Management Company...................... 523,602 (10) 5.1
75 State Street
Boston, MA 02109
Anthony A. Lombardo................................ 225,000 2.1
President, Chief Executive Officer,
Director
Paul S. Echenberg.................................. 93,205 *
Chairman of the Board of
E-Z-EM Canada, Director
Donald A. Meyer.................................... 61,006 *
Director
James L. Katz...................................... 43,092 *
Director
Dennis J. Curtin................................... 40,180 *
Senior Vice President
Eamonn P. Hobbs.................................... 32,699 *
Senior Vice President
Michael A. Davis, M.D.............................. 15,786 *
Medical Director, Director
Joseph J. Palma.................................... 15,464 *
Senior Vice President
Brad S. Schreck.................................... 8,750 *
Senior Vice President
Robert J. Beckman.................................. 1,000 *
Director
George P. Ward..................................... 1,000 *
Director
All directors and executive 4,099,066 (2)(3) 37.5
officers as a group (22 persons)...................
_________
* Does not exceed 1%.
(1) Includes common stock shares issuable upon exercise of options currently
exercisable or exercisable within 60 days of the record date as follows:
Howard S. Stern (2,000), David P. Meyers (1,000), Anthony A. Lombardo
(225,000), Paul S. Echenberg (75,856), Donald A. Meyer (19,918), James
L. Katz (35,756), Dennis J. Curtin (35,556), Eamonn P. Hobbs (32,640),
Michael A. Davis, M.D. (12,091), Joseph J. Palma (15,464), Brad S.
Schreck (8,750) and all directors and executive officers as a group
(685,142).
(2) On July 15, 2002, Howard S. Stern and his son and daughter, Seth F.
Stern and Rachel Stern Graham, entered into an agreement (the
"Stockholders' Agreement") with David P. Meyers, a director of the
Company, and Jonas I. Meyers, Stuart J. Meyers and Betty K. Meyers, each
of whom is a relative of David P. Meyers, and the Meyers Family Limited
Partnership, an entity controlled by certain members of the Meyers
family. Pursuant to the Stockholders' Agreement, each party thereto has
agreed to, among other things, not submit certain types of stockholder
proposals to the Company until July 15, 2004 and not vote in favor of
any such proposals during such period. By virtue of the execution,
delivery and performance of the Stockholders' Agreement, each party to
the Stockholders' Agreement, including Mr. Stern, may
-19-
be deemed to beneficially own the shares owned by each other party to
the Stockholders' Agreement. However, Mr. Stern and each other party
to the Stockholders' Agreement have expressly disclaimed such
beneficial ownership. Accordingly, the shares beneficially owned by
the other parties to the Stockholders' Agreement are not listed as
beneficially owned by Mr. Stern in the table above. Seth F. Stern and
Rachel Stern Graham beneficially own 341,931 and 430,827 shares of the
Company's common stock, respectively, and, in the aggregate, Mr.
Stern, Seth F. Stern and Rachel Stern Graham collectively beneficially
own 2,848,957 shares of the Company's common stock, or approximately
27.8% of the issued and outstanding shares. The information set forth
above was derived from a Schedule 13D dated July 29, 2002 filed
jointly by Mr. Stern, Seth F. Stern and Rachel Stern Graham and other
information available to the Company.
(3) David P. Meyers, Jonas I. Meyers, Stuart J. Meyers, Betty K. Meyers and
the Meyers Family Limited Partnership (the "Meyers Stockholders") are
each parties to the Stockholders' Agreement described in footnote (2)
above. By virtue of the execution, delivery and performance of the
Stockholders' Agreement, each party to the Stockholders' Agreement,
including each of the Meyers Stockholders, may be deemed to beneficially
own the shares owned by each other party to the Stockholders' Agreement.
However, each of the Meyers Stockholders has expressly disclaimed such
beneficial ownership. Accordingly, except as otherwise noted, the shares
beneficially owned by the other parties to the Stockholders' Agreement
are not listed as beneficially owned by any of the Meyers Stockholders
in the table above. The information set forth above was derived from a
Schedule 13D dated July 16, 2003 filed jointly by the Meyers
Stockholders.
(4) Includes 385,231 shares owned directly by David P. Meyers (including the
1,000 shares issuable upon the exercise of options currently exercisable
or exercisable within 60 days of the record date per footnote (1) above)
and 379,866.03 shares beneficially owned by Mr. Meyers by virtue of his
beneficial ownership of 22.55% of the Meyers Family Limited Partnership.
Excludes 366,642.67 shares in which Mr. Meyers has only a remainder
interest. Betty K. Meyers holds a life estate in 45,012 of these shares
and the Meyers Family Limited Partnership holds a life estate (which is
measured by the life of Betty K. Meyers) in the balance of the shares in
which Mr. Meyers has a remainder interest. Also excludes 1,909 shares
owned by Mr. Meyers' wife, as well as any shares beneficially owned by
his wife or a trust established for the benefit of his children through
their ownership of interests in the Meyers Family Limited Partnership
(7.12% and 1.53%, respectively) as to which Mr. Meyers disclaims
beneficial ownership. The information set forth above was derived from a
Schedule 13D dated July 16, 2003.
(5) Includes 221,453 shares owned directly by Jonas I. Meyers and 379,866.03
shares beneficially owned by Mr. Meyers by virtue of his beneficial
ownership of 22.55% of the Meyers Family Limited Partnership. Excludes
366,641.67 shares in which Mr. Meyers has only a remainder interest.
Betty K. Meyers holds a life estate in 42,510 of these shares and the
Meyers Family Limited Partnership holds a life estate (which is measured
by the life of Betty K. Meyers) in the balance of the shares in which
Mr. Meyers has a remainder interest. The information set forth above was
derived from a Schedule 13D dated July 16, 2003.
(6) Includes 315,758 shares owned directly by Stuart J. Meyers and
379,866.03 shares beneficially owned by Mr. Meyers by virtue of his
beneficial ownership of 22.55% of the Meyers Family Limited Partnership.
Excludes 366,641.67 shares in which Mr. Meyers has only a remainder
interest. Betty K. Meyers holds a life estate in 42,510 of these shares
and the Meyers Family Limited Partnership holds a life estate (which is
measured by the life of Betty K. Meyers) in the balance of the shares in
which Mr. Meyers has a remainder interest. Also excludes 14,035 shares
owned by a trust established for the benefit of Mr. Meyers' children, as
well as any shares beneficially owned by his wife or a trust established
for the benefit of his children through their ownership of interests in
the Meyers Family Limited Partnership (7.12% and 16.59%, respectively)
as to which Mr. Meyers disclaims beneficial ownership. The information
set forth above was derived from a Schedule 13D dated July 16, 2003.
(7) The Meyers Family Limited Partnership is beneficially owned by David P.
Meyers, Jonas I. Meyers, Stuart J. Meyers and certain other Meyers
family members and related trusts. Stuart Meyers and Betty Meyers, the
mother of David, Jonas and Stuart Meyers, as co-trustees of the Meyers
Management Trust, the general partner of the Meyers Family Limited
Partnership, have shared voting and investment power over the shares
held by the Meyers Family Limited Partnership. In addition, Betty Meyers
owns 128,021 shares of the Company's common stock directly and holds a
life estate in 151,416 shares of the Company's common stock. The
information set forth above was derived from a Schedule 13D dated July
16, 2003.
(8) Collectively, David P. Meyers, Jonas I. Meyers, Stuart J. Meyers, Betty
K. Meyers and the Meyers Family Limited Partnership own an aggregate of
2,886,429 shares of the Company's common stock, representing
approximately 28.1% of the currently outstanding shares, excluding any
shares owned by their spouses (1,909) or trusts established for the
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benefit of their children (14,035) as members of a group under Section
13(d) of the Securities Exchange Act of 1934. Each member of the group
expressly disclaims beneficial ownership of the shares held by the other
members of the group. The information set forth above was derived from a
Schedule 13D dated July 16, 2003.
(9) Information was derived from a Schedule 13D dated July 18, 2003.
(10) Information was derived from a Schedule 13G dated February 14, 2003.
Equity Compensation Plan Information
The following table sets forth information, as of May 31, 2003, with
respect to compensation plans under which equity securities of the Company are
authorized for issuance.
(a) (b) (c)
Number of securities
remaining available
for future issuance
Number of securities Weighted-average under equity
to be issued upon exercise price compensation plans
exercise of of outstanding (excluding securities
outstanding options, options, warrants reflected in
Plan category warrants and rights and rights column (a))
------------- ------------------- ----------------- ----------------------
Equity compensation
plans approved
by security holders 1,219,893 $6.12 764,917 (1)
Equity compensation
plans not approved
by security holders None None None
Total 1,219,893 $6.12 764,917
(1) Consists of 658,909 shares reserved for issuance under the Company's
1983 and 1984 stock option plans and 106,008 shares reserved for
issuance under the Company's 1985 Employee Stock Purchase Plan.
Common Stock Performance Graph
On October 22, 2002 (the "Recapitalization Date"), the Company
completed a recapitalization merger in which the Company's two previously
outstanding classes of publicly traded equity securities - Class A common stock
and Class B common stock - were combined into a single class of common stock. As
a result of the recapitalization merger, on the Recapitalization Date, each
outstanding share of Class A common stock and each outstanding share of Class B
common stock was converted into one share of the currently outstanding single
class of common stock..
The following graph compares the cumulative total stockholder return
on the Company's common stock with returns on the AMEX Market Value (U.S. &
Foreign) Index ("AMEX Composite") and the Standard and Poor's Healthcare
Equipment (Supercap) Index ("S&P Healthcare Equipment (Supercap)") during the
five-year period ended May 31, 2003. Since the Company's current single class
of common stock did not commence trading until October 22, 2002, the graph
below shows the total five-year return for the Company's common stock assuming
(i) an initial $100
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investment in our previously outstanding Class A common stock on May 30, 1998
and (ii) an initial $100 investment in our previously outstanding Class B
common stock on May 30, 1998, in each case, assuming each share of Class A
common stock or Class B common stock held was converted into one share of the
current single class of common stock on the Recapitalization Date. Returns
reflected in the graph below are therefore based on the performance of the
Class A common stock or Class B common stock, as applicable, for periods prior
to the Recapitalization Date and on the performance of the current single
class of common stock for periods from and after the Recapitalization Date.
Total Return - Data Summary
Cumulative Total Return
----------------------------------------------------------------
Recap
5/98 5/99 5/00 5/01 5/02 Date 5/03
---- ---- ---- ---- ---- ---- ----
E-Z-EM, INC. - COMMON STOCK (EZM)
(ASSUMING INITIAL INVESTMENT IN
E-Z-EM CLASS A SHARES) 100.00 72.32 98.21 75.71 157.14 112.86 120.00
E-Z-EM, INC. - COMMON STOCK (EZM)
(ASSUMING INITIAL INVESTMENT IN
E-Z-EM CLASS B SHARES) 100.00 85.11 110.64 90.21 153.19 134.47 142.98
AMEX COMPOSITE 100.00 107.03 127.86 124.08 113.32 94.45 109.85
S & P HEALTHCARE
EQUIPMENT (SUPERCAP) 100.00 119.69 136.31 144.85 157.61 140.34 161.21
-22-
In order to provide stockholders with additional information regarding
the performance of the Company's current single class of common stock since the
completion of the recapitalization merger, the following graph compares the
cumulative total stockholder return on the Company's common stock with returns
on the AMEX Composite and the S&P Healthcare Equipment (Supercap) on a monthly
basis during the period from the Recapitalization Date through May 31, 2003. The
graph below shows the total return during this period for the Company's common
stock assuming an initial $100 investment on the October 22, 2002
Recapitalization Date. Returns reflected in the graph below are therefore based
solely on the performance of our current single class of common stock.
Total Return - Data Summary
Cumulative Total Return
-----------------------------------------------------------------------------------
Recap
Date 10/02 11/02 12/02 1/03 2/03 3/03 4/03 5/03
---- ----- ----- ----- ---- ---- ---- ---- ----
E-Z-EM, INC. COMMON
STOCK (EZM) 100.00 98.10 113.92 110.13 102.53 91.39 118.35 101.14 106.33
AMEX COMPOSITE 100.00 100.45 105.41 101.60 100.62 100.82 101.35 107.57 116.30
S & P HEALTHCARE
EQUIPMENT (SUPERCAP) 100.00 98.62 102.65 103.41 102.44 105.31 103.55 109.34 115.01
-23-
Certain Relationships and Related Transactions
During 2003, the Company leased a facility, located in Westbury, New
York, that was owned approximately 33% by Howard S. Stern, approximately 31% by
Betty K. Meyers, a principal stockholder, and David P. Meyers, a principal
stockholder and director of the Company, approximately 2% by other employees of
the Company and approximately 34% by unrelated parties, which included a 31%
owner who managed the property. Aggregate rentals, including real estate tax
payments, were $143,000 during 2003. The lease was terminated in April 2003.
Two facilities of the Company's wholly-owned subsidiary located in
Tokyo, Japan are owned by Tohru Nagami, the subsidiary's President, and his
mother. Aggregate rentals were $58,000 during 2003. The lease on one such
facility was terminated in April 2003, while the lease term on the second
facility expires in November 2003.
During 2003, the Company leased a facility, located in Old Westbury,
New York, that is owned by Howard S. Stern. Aggregate rentals, including real
estate tax payments, were $36,000 during 2003. The lease was terminated in
December 2002.
The Company has split dollar life insurance arrangements
("arrangements") with Howard S. Stern (including his spouse), the Company's
Chairman of the Board, and Betty K. Meyers, a principal shareholder, which were
entered into on May 27, 1998 and May 25, 1998, respectively. The Betty Meyers
policy is owned by the Betty Meyers Life Insurance Trust, the beneficiaries of
which include David P. Meyers, a director. Annually, through fiscal 2002, the
Company paid approximately $100,000 toward the cost of each life insurance
policy. Because of the uncertainty of the treatment of split dollar life
insurance policies under The Sarbanes-Oxley Act of 2002, for fiscal 2003, the
Company did not make any payments toward the cost of such policies. Through
August 2000, payments made by the Company were subject to repayment with
interest payable to the Company annually by the insureds. In August 2000, the
arrangements were modified to conform to the Company's other split dollar life
insurance arrangements, making subsequent payments non- interest bearing. In May
2002, the board of directors approved a resolution to forgive any unpaid
interest.
As a result of the Company's not advancing the cost of the policies,
Mr. Stern personally paid the premiums on his policy during fiscal 2003. The
Meyers family did not make similar premium payments and, as a result, the
insurance company charged the amount of the premium against the cash surrender
value of the Meyers' policy. The aggregate amount of premiums paid by the
Company for each policy is $500,000, the proceeds of which, under collateral
assignment agreements, will be first used to repay all payments made by the
Company for that policy. Additionally, beneficiaries of each policy may not
borrow against the amount paid by the Company. As a result of the insurance
company charging the Meyers' policy for the amount of the unpaid premium, the
cash surrender value of the Meyers' policy was reduced to $486,000. Both Howard
Stern (including his spouse) and Betty Meyers have committed to repay to the
Company any shortfall between the cash surrender value of his or her policy and
the aggregate amount of premiums paid by the Company. At May 31, 2003, the cash
surrender value of such policies aggregated $1,193,000 and the aggregate amount
of advances made by the Company totaled $1,000,000.
-24-
The Company has engaged Michael A. Davis, M.D., a director of the
Company, for consulting services. Fees for such services were approximately
$133,000 during 2003.
The Company had engaged Donald A. Meyer, a director of the Company, for
consulting services through October 31, 2002. Fees for such services were
approximately $13,000 during 2003. Mr. Meyer also serves as trustee for several
of the Company's Profit-Sharing and 401(k) Plans. Fees for such services were
approximately $15,000 during 2003.
Effective January 1, 2002, the Company entered into an agreement with
Howard S. Stern, the Chairman of the Company's board, pursuant to which Mr.
Stern has agreed to provide certain services to the Company until December 31,
2004. The Company agreed to include Mr. Stern in its slate of directors for the
2002 annual meeting and to appoint Mr. Stern as Chairman of the Board for a
one-year term beginning at the annual meeting. So long as Mr. Stern remains
Chairman of the Company, he is entitled to receive twice the regular fees and
other compensation (including cash, stock and options) paid to directors for
service on the board. Under the terms of the agreement, Mr. Stern is entitled to
receive 36 equal monthly payments of $20,833.34, as well as certain bonus
opportunities. Mr. Stern also receives other benefits and perquisites and, so
long as he remains Chairman, an annual sum of up to $80,000 for reimbursement of
reasonable business expenses.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of initial ownership and
changes in ownership with the Securities and Exchange Commission. Based solely
on its review of copies of such forms received by the Company, or on written
representations from certain reporting persons that no reports were required for
such persons, the Company believes that, during the fiscal year ended May 31,
2003, all of the filing requirements applicable to its executive officers,
directors and 10% shareholders were complied with, except as follows:
o Robert M. Bloomfield filed a Form 4 that was four business
days late, reporting the exercise of stock options and the
sale of stock.
o David P. Meyers filed a Form 5 on July 17, 2003 that was two
business days late, reporting i) the Company's issuance of
stock to Mr. Meyers on November 1, 2002 and ii) the Company's
granting of stock options to Mr. Meyers on May 31, 2003, in
each case, as compensation for services as a director of the
Company. Mr. Meyers failed to report each of these two
transactions on Form 4 within two business days of the
applicable transaction date, as required by applicable
regulations.
o Each of Jonas I. Meyers and Stuart J. Meyers filed a Form 3 on
July 31, 2003 that was required to be filed on or before June
19, 2002, the 10th day following the event that resulted in
them each becoming a reporting person.
o Each of Betty K. Meyers and The Meyers Family Limited
Partnership filed a Form 3 on August 8, 2003 that was required
to be filed on or before June 19, 2002, the 10th day following
the event that resulted in them each becoming a reporting person.
-25-
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
General
The board of directors appointed Grant Thornton LLP, independent
certified public accountants, who were the Company's independent auditors for
the 2003 fiscal year, as the Company's independent auditors for the fiscal year
ending May 29, 2004. 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 proposal to ratify the board's appointment of Grant Thornton LLP as
the Company's independent auditors for the fiscal year ending May 29, 2004 must
be approved by the affirmative vote of a majority of the votes cast at the
annual meeting. For the purposes of this vote, a vote to abstain and a broker
non-vote will each have no effect since they will not represent votes cast at
the annual meeting for the purpose of this proposal.
A representative of Grant Thornton LLP is expected to be present at the
annual meeting with the opportunity to make a statement and to respond to
appropriate questions.
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 fiscal year ending May 29, 2004.
STOCKHOLDER PROPOSAL RELATING TO THE ESTABLISHMENT OF A
RETROACTIVE 18-YEAR TERM LIMIT FOR DIRECTORS
Stockholder Proposal
Mr. Ira M. Albert has submitted the following stockholder proposal on
behalf of Albert Investment Associates, LP, an investment fund of which Mr.
Albert is the General Partner:
WHEREAS, Albert Investment Associates, LP (the "Shareholder")
urges the board of directors of E-Z-EM, Inc. (the "Company") to support
a resolution to adopt a retroactive maximum term of 18 years that any
director may serve on the Company's board, because the Shareholder
strongly believes that the Company's financial performance is closely
linked to its corporate governance policies and procedures, and the
level of management and board accountability they impose; and
WHEREAS, the Shareholder believes that the absence of term limits
has reduced the accountability of management and the board, thereby
negatively impacting the Company's financial and stock price
performance for over a decade; and
-26-
WHEREAS, the Shareholder further believes that the Company's
current board structure has been detrimental to stockholders' interests
by reducing Management and Board accountability and thereby adversely
affecting stockholder value; and
WHEREAS, the Shareholder believes that the Company's current Board
structure has hindered the stock's liquidity and the creation of
stockholder value, the Shareholder strongly believes that a term limit
for Directors would create greater accountability and result in a
higher price for the Company's common stock; and
WHEREAS, the Shareholder believes that the current Board and
Management have little or no security ownership in the Company (other
than shares issued upon exercise of options and the substantial
ownership positions of the Company's two founding families) and that a
change in Board composition that might result from implementation of
this Proposal could result in a Board that is more closely aligned with
stockholders' interests and more focused on creating stockholder value
than the current Board.
NOW, THEREFORE, BE IT RESOLVED, that the Company's stockholders
urge the Board of Directors to allow a vote by the Company's
stockholders to institute a retroactive 18-year term limit for all
Directors; provided, that the implementation of this Proposal shall not
have the effect of shortening the term of any incumbent Director.
The Shareholder urges you to vote FOR this Proposal.
The stockholder proposal to urge the board of directors to allow a
stockholder vote regarding the implementation of a retroactive 18-year term
limit for directors must be approved by the affirmative vote of a majority of
the votes cast at the annual meeting. For the purposes of this vote, a vote to
abstain and a broker non-vote will each have no effect since they will not
represent votes cast at the annual meeting for the purpose of this proposal.
Recommendation of the Board of Directors
The board of directors of the Company urges you to vote AGAINST this
proposal for the following reasons:
E-Z-EM's goal is to have the most competent, experienced and engaged
board of directors possible in order to provide leadership to the Company and
guidance to executive management. Because of the scope and complexity of the
Company's business, we believe that directors continue to deepen their
understanding of the Company's operations and the issues and challenges facing
our business throughout their years of service on the board. We further believe
that directors become increasingly effective as their knowledge of the Company's
businesses and its officers and employees increases. An arbitrary term limit for
directors would needlessly deprive the stockholders and the Company of the
benefits of directors' experience and knowledge at a time in their tenure when
they are becoming increasingly effective and productive and would remove
directors from the board that have acquired valuable knowledge and insights
about the Company and our industry.
-27-
Replacing directors solely because of their length of service could
also dramatically reduce the board's effectiveness. Imposing an arbitrary limit
on directors' terms of office could result in the Company losing the services of
directors who have acquired a great deal of knowledge and perspective about the
Company's operations and who may be in a position to make their most valuable
contributions to E-Z-EM's business. We also believe that the accelerated
turnover of directors that would result from the imposition of term limits would
be disruptive and could significantly diminish the Company's ability to attract
the most qualified candidates for board service.
We also believe that term limits for directors are not necessary to
enhance director accountability. Approximately one-third of our directors stand
for election each year, and stockholders may nominate their own candidates if
they believe that the Company's slate of nominees is not adequate. Because
adoption of this proposal would limit stockholder discretion in selecting the
best candidates to lead the Company, we do not believe it is in our
stockholders' best interests.
We believe that the proponent's term limits would deprive the Company
of experienced oversight, promote excessive turnover of directors and weaken our
system of governance.
We Recommend That You Vote
Against the Adoption of this Stockholder Proposal
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 2003 Annual Report
on Form 10-K for the 2003 fiscal year.
Any stockholder of the Company may obtain without charge additional
copies of the Company's Annual Report on Form 10-K for the 2003 fiscal year
(without exhibits), as filed with the Securities and Exchange Commission, by
writing to:
Stockholder Information
E-Z-EM, Inc.
1111 Marcus Avenue
Lake Success, New York 11042
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 21, 2004.
-28-
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.
-29-
EXHIBIT 99.1
E-Z-EM, Inc.
Proxy for the Annual Meeting of Stockholders
to be held on October 21, 2003
This Proxy is solicited on behalf of the Board of Directors of E-Z-EM,
Inc. for the 2003 Annual Meeting of Stockholders to be held on October 21, 2003.
The 2003 Annual Meeting of Stockholders will be held at the Long Island
Marriott, 101 James Doolittle Boulevard, Uniondale, New York, on Tuesday,
October 21, 2003, at 9:30 a.m., local time.
The undersigned, a holder of common stock of E-Z-EM, Inc., hereby
appoints Anthony A. Lombardo and Dennis J. Curtin, 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 common
stock of the Company which the undersigned would be entitled to vote if
personally present at the 2003 Annual Meeting of Stockholders, and at any
adjournment or postponement thereof, in all matters indicated on the reverse
side hereof, and with discretionary authority to vote as to any other matters
that may properly come before such meeting.
IMPORTANT - This Proxy is continued on the reverse
side. Please sign and date on the reverse side and
return today.
DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
This Proxy, when properly signed, will be voted in the manner
directed. If no direction is given, this Proxy will be voted FOR Proposal No.
1 and Proposal No. 2 and AGAINST Proposal No. 3.
1. To elect Michael A. Davis, James L. Katz and Anthony A. Lombardo as
Class I directors of the Company, each for a term of three years
(Proposal No. 1).
|_| FOR |_| WITHHOLD AUTHORITY Authority withheld for the
following nominee(s) only:
(Write the name(s) of such
nominee(s) in the
space provided below)
____________________
2. To ratify the appointment of Grant Thornton LLP as the independent
auditors of E-Z-EM, Inc. for the fiscal year ending May 29, 2004
(Proposal No. 2).
|_| FOR |_| AGAINST |_| ABSTAIN
3. To urge the board of directors to allow a vote by the Company's
stockholders to institute a retroactive 18-year term limit for all
directors; provided, that the implementation of this Proposal shall not
have the effect of shortening the term of any incumbent director
(Proposal No. 3).
|_| FOR |_| AGAINST |_| ABSTAIN
Please mark, date and sign exactly as name appears hereon. Joint owners
should each sign. When signing as an executor, corporate officer or in any other
representative capacity, please give full title as such.
Dated: _____________________, 2003
________________________________
________________________________
SIGNATURE(S)