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 Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
BIO-TECHNOLOGY GENERAL CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11: (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP.
70 WOOD AVENUE SOUTH
ISELIN, NEW JERSEY 08830
(732) 632-8800
April 30, 1998
Dear Fellow Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 11:00 a.m. on Wednesday, June 17, 1998, at The
University Club, 1 West 54th Street, New York, New York.
This year, in addition to electing directors, you are being asked to
approve the adoption of the Company's 1998 Employee Stock Purchase Plan. In
addition, I will be pleased to report on the affairs of the Company and a
discussion period will be provided for questions and comments of general
interest to stockholders.
We look forward to greeting personally those stockholders who are able to
be present at the meeting; however, whether or not you plan to be with us at the
meeting, it is important that your shares be represented. Accordingly, you are
requested to sign and date the enclosed proxy and mail it in the envelope
provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
SIM FASS
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
BIO-TECHNOLOGY GENERAL CORP.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
New York, New York
April 30, 1998
Notice is hereby given that the Annual Meeting of Stockholders of
Bio-Technology General Corp. will be held on Wednesday, June 17, 1998, at 11:00
a.m., at The University Club, 1 West 54th Street, New York, New York for the
following purposes:
(1) To elect nine directors to serve for the ensuing year;
(2) To consider and vote upon a proposal to adopt the 1998 Employee
Stock Purchase Plan; and
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Stockholders of record at the close of business on April 24, 1998 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. Stockholders who are unable to attend the Annual Meeting in person are
requested to complete and date the enclosed form of proxy and return it promptly
in the envelope provided. No postage is required if mailed in the United States.
Stockholders who attend the Annual Meeting may revoke their proxy and vote their
shares in person.
ROY L. GOLDMAN
Secretary
<PAGE>
BIO-TECHNOLOGY GENERAL CORP.
70 WOOD AVENUE SOUTH
ISELIN, NEW JERSEY 08830
----------------------
PROXY STATEMENT
----------------------
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of Common Stock, par value
$.01 per share (the "Common Stock"), of Bio-Technology General Corp. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies for use at the Annual Meeting of Stockholders to be held on
Wednesday, June 17, 1998, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors is not
currently aware of any other matters which will come before the meeting.
Proxies for use at the meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed to stockholders on or about May
5, 1998 and will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. Should it appear
desirable to do so in order to ensure adequate representation of shares at the
meeting, officers, agents and employees of the Company may communicate with
stockholders, banks, brokerage houses and others by telephone, facsimile or in
person to request that proxies be furnished. All expenses incurred in connection
with this solicitation will be borne by the Company. The Company has no present
plans to hire special employees or paid solicitors to assist in obtaining
proxies, but reserves the option of doing so if it should appear that a quorum
otherwise might not be obtained.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting of Stockholders and a return
envelope for the proxy are enclosed. Stockholders may revoke the authority
granted by their execution of proxies at any time before their effective
exercise by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the meeting. Shares of the Company's Common Stock represented by executed and
unrevoked proxies will be voted in accordance with the choice or instructions
specified thereon. If no specifications are given, the proxies intend to vote
the shares represented thereby for all nominees for director in accordance with
Proposal No. 1, to approve Proposal No. 2 as set forth in the accompanying
Notice of Annual Meeting of Stockholders and in accordance with their best
judgment on any other matters which may properly come before the meeting.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on April 24, 1998 are
entitled to notice of and to vote at the Annual Meeting or any and all
adjournments thereof. On April 24, 1998 there, were 48,131,809 shares of Common
<PAGE>
Stock outstanding; each such share is entitled to one vote on each of the
matters to be presented at the Annual Meeting. The holders of a majority of the
outstanding shares of Common Stock, present in person or by proxy and entitled
to vote, will constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes will be counted for purposes of determining the presence or absence of
a quorum. "Broker non-votes" are shares held by brokers or nominees which are
present in person or represented by proxy, but which are not voted on a
particular matter because instructions have not been received from the
beneficial owner. Under applicable Delaware law, the effect of broker non-votes
on a particular matter depends on whether the matter is one as to which the
broker or nominee has discretionary voting authority under the applicable rule
of the New York Stock Exchange. The effect of broker non-votes on the specific
items to be brought before the Annual Meeting of Stockholders is discussed under
each item.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 31, 1998 (except as
otherwise noted in the footnotes) regarding the beneficial ownership (as defined
by the Securities and Exchange Commission (the "SEC")) of the Company's Common
Stock of: (i) each person known by the Company to own beneficially more than
five percent of the Company's outstanding Common Stock; (ii) each director and
nominee for election as a director of the Company; (iii) each executive officer
named in the Summary Compensation Table (see "Executive Compensation"); and (iv)
all directors and executive officers of the Company as a group. Except as
otherwise specified, the named beneficial owner has the sole voting and
investment power over the shares listed.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNERSHIP OF COMMON STOCK COMMON STOCK
- ------------------------ --------------------------- -------------
<S> <C> <C>
Grace Brothers, Ltd.............................. 2,869,700(1) 6.0%
1560 Sherman Avenue, Suite 900
Evanston, Illinois 60201
Friess Associates, Inc........................... 2,500,000(2) 5.3%
115 E. Snow King
Jackson, Wyoming 83001
Herbert Conrad................................... 23,456(3) *
Sim Fass......................................... 570,000(4) 1.2%
Marian Gorecki................................... 201,250(5) *
David Haselkorn.................................. 211,250(6) *
Carl E. Kaplan................................... 3,000(7) *
Nadim Kassem..................................... 175,500(8) *
Moses Marx....................................... 277,381(9) *
William Pursley.................................. 36,250(10) *
Allan Rosenfield................................. 5,692(11) *
David Tendler.................................... 29,565(12) *
Virgil Thompson.................................. 21,875(13) *
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNERSHIP OF COMMON STOCK COMMON STOCK
- ------------------------ --------------------------- -------------
<S> <C> <C>
Dan Tolkowsky.................................... 52,264(14) *
Faye Wattleton................................... 5,692(11) *
Herbert Weissbach................................ 5,000(15) *
All directors and executive officers
as a group (17 persons)........................ 1,699,425(16) 3.6%
</TABLE>
- -------------
* Represents less than one percent of the Company's Common Stock.
(1) This figure is based upon information set forth in a Schedule 13G, filed
with the SEC on January 29, 1998 by Grace Brothers, Ltd. (the "Grace
Schedule 13G"). The Grace Schedule 13G states that as of January 29, 1998,
Grace Brothers, Ltd. was the beneficial owner of 2,869,700 shares of Common
Stock, with the sole power to vote and to dispose of 1,530,614 shares and
shared voting and dispositive power with respect to 1,339,086 shares of
Common Stock held by affiliates of Grace Brothers, Ltd.
(2) This figure is based upon information set forth in a Schedule 13G, filed
with the SEC on March 20, 1998 by Friess Associates, Inc. (the "Friess
Schedule 13G"). The Friess Schedule 13G states that as of March 20, 1998,
Friess Associates, Inc. was the beneficial owner of 2,500,000 shares of
Common Stock, with the sole power to vote and to dispose of such shares.
(3) Includes 21,875 shares which may be acquired through the exercise of stock
options. Does not include 5,625 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(4) Includes 365,000 shares which may be acquired through the exercise of stock
options. Does not include 277,500 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(5) Consists of shares which may be acquired through the exercise of stock
options. Does not include 151,250 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(6) Consists of shares which may be acquired through the exercise of stock
options. Dr. Haselkorn resigned from the Company effective April 30, 1998.
(7) Nominee for director. Upon election as a director, Mr. Kaplan will receive
an option to purchase 20,000 shares of Common Stock pursuant to the
Company's 1992 Stock Option Plan for Outside Directors. See "Executive
Compensation -- Compensation of Directors."
(8) Includes 20,000 shares of Common Stock owned by Dr. Kassem's wife, 5,000
shares of Common Stock owned by Dr. Kassem's children and 132,500 shares
which may be acquired through the exercise of stock options. Dr. Kassem
resigned from the Company as of March 6, 1998.
(9) Information included herein concerning the shares of Common Stock owned
beneficially by Moses Marx was taken from a Form 4 that was filed with the
SEC by Mr. Marx in April 1998. The information concerning options owned by
Mr. Marx was derived from the Company's records. The shares beneficially
owned by Mr. Marx
3
<PAGE>
include (a) 250,000 shares of Common Stock held by (i) Momar Corp. (200,000
shares), a corporation of which Mr. Marx is President and sole director,
and (ii) United Equities (Commodities) Company (50,000 shares), a
partnership in which Mr. Marx owns a majority interest; and (b) options to
purchase 21,875 shares of Common Stock. Mr. Marx, United Equities
(Commodities) Company and Momar Corp. filed a joint Schedule 13D on October
5
2, 1996 which stated that they may be deemed to constitute a "group"
within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Mr. Marx is not standing for
re-election as a director.
(10) Consists of shares which may be acquired upon the exercise of options. Does
not include 141,250 shares of Common Stock issuable upon the exercise of
options which are not exercisable within 60 days of March 31, 1998.
(11) Includes 5,000 shares which may be acquired through the exercise of stock
options. Does not include 15,000 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(12) Includes 21,875 shares which may be acquired through the exercise of stock
options. Does not include 5,625 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(13) Consists of shares which may be acquired upon the exercise of options. Does
not include 5,625 shares of Common Stock issuable upon the exercise of
options which are not exercisable within 60 days of March 31, 1998.
(14) Includes 1,875 shares which may be acquired through the exercise of stock
options. Does not include 5,625 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(15) Consists of shares which may be acquired through the exercise of stock
options. Does not include 15,000 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of March 31,
1998.
(16) Includes 200,000 shares beneficially owned by Momar Corp., 50,000 shares
beneficially owned by United Equities (Commodities) Company (see Note 9),
and 1,134,875 shares of Common Stock which may be acquired upon the
exercise of stock options. Does not include shares owned by Mr. Kaplan,
nominee for director.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Nine directors (constituting the entire Board) are to be elected at the
Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below to serve until the next annual meeting of
stockholders and until their successors shall have been duly elected and shall
qualify. In the event any of these nominees shall be unable to serve as a
director, the shares represented by the proxy will be voted for the person, if
any, who is designated by the Board of Directors to replace the nominee. All
nominees have consented to be named and have indicated their intent to serve if
elected. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve or that any vacancy on the Board of Directors
will occur.
4
<PAGE>
<TABLE>
<CAPTION>
The nominees, their ages, the year in which each first became a director
and their principal occupations or employment during the past five years are:
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
- -------- -- --------------- ---------------------------
<S> <C> <C> <C>
Herbert Conrad............................. 65 1993 Retired; President of Roche Pharmaceuticals
Division, Hoffmann-La Roche from
December 1981 until September 1993.
(1)(2)
Sim Fass................................... 56 1983 Chairman of the Board since March 1997;
President/CEO of the Company and
President of Bio-Technology General
(Israel) Ltd., the Company's wholly-owned
subsidiary ("BTG Israel"), since May 1984;
Treasurer of the Company since August
1983; Chief Operating Officer of BTG
Israel between August 1983 and May 1987.
(1)(3)
Carl Kaplan................................ 59 -- Senior Partner, Fulbright & Jaworski L.L.P.;
from January 1969 to January 1, 1989, a
partner of Reavis & McGrath, which
merged with Fulbright & Jaworski effective
January 1, 1989. (4)
Allan Rosenfield........................... 65 1997 Dean, School of Public Health, Joseph R.
DeLamar Professor of Public Health and
Professor of Obstetrics and Gynecology,
Columbia University, since 1986. (2)
David Tendler.............................. 60 1994 Partner, Tendler Beretz L.L.C. since January
1985; Chairman of V.I. Technologies, Inc.
(previously Melville BioLogics Inc.) since
February 1995; Co-Chairman and Chief
Executive Officer of Phibro-Salomon, Inc.
from May 1982 until October 1984.
(1)(2)(5)
Virgil Thompson............................ 58 1994 President and Chief Executive Officer of
Cytel Corporation since January 1996;
President and Chief Executive Officer of
CIBUS Pharmaceutical, Inc. from July
1994 until January 1996; President from
August 1991 to August 1993 and Executive
Vice President from March 1986 to August
1991 of Syntex Laboratories, Inc. (2)(5)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
- -------- -- --------------- ---------------------------
<S> <C> <C> <C>
Dan Tolkowsky.............................. 77 1985 Partner, Tolkowsky Associates; Partner, Adler
& Tolkowsky Management Associates, the
general partner of Athena Venture
Partners L.P., a venture capital
partnership, from May 1985 to September
1997; prior thereto, Vice Chairman and
Managing Director of Discount Investment
Corporation (Tel-Aviv); Chairman of the
Executive Committee of BTG Israel from
1983 through October 1989. (5)
Faye Wattleton............................. 54 1997 President of the Center for Gender Equality
since 1995; President of Planned
Parenthood Federation of America, Inc.
(New York) from 1978 to 1992. (1)
Herbert Weissbach.......................... 66 1997 Distinguished Research Professor, Department
of Biological Sciences, Florida Atlantic
University, since January 1997; prior
thereto, Vice President, Hoffmann-LaRoche
Inc. from 1983 to 1996; Director, Roche
Institute of Molecular Biology from 1983 to
1996. (2)
</TABLE>
- -----------------
(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Pursuant to Dr. Fass' employment agreement with the Company, the Company
has agreed to nominate Dr. Fass for election as a director during all
periods when Dr. Fass serves as President and Chief Executive Officer of
the Company. See "Executive Compensation--Employment Agreements."
(4) Fulbright & Jaworski L.L.P. has rendered legal services to the Company in
1997 and 1998.
(5) Member of the Compensation and Stock Option Committee of the Board of
Directors.
Mr. Conrad is a director of Gensia, Inc., Dura Pharmaceuticals, Inc.,
GenVec Inc. and Urocor Inc. Mr. Marx, a director of the Company who is not
standing for re- election at the Annual Meeting of Stockholders, is a director
of The Cooper Companies, Inc. and Cooper Life Sciences, Inc. Mr. Thompson is a
director of Cytel Corporation, Cypros Pharmaceuticals Corp. and Anadigm
Corporation. Mr. Tolkowsky is a director of The Israel Fund. Ms. Wattleton is a
director of Empire Blue Cross & Blue Shield, Estee Lauder Companies, the Henry
J. Kaiser Family Foundation, the Institute for International Education, Leslie
Fay Companies, Thirteen/WNET, Quidel Corporation and the Women's Environment and
Development Organization and a member of the advisory board of Columbia
University School of Public Health.
On December 6, 1994, the Board reestablished the Executive Committee to
exercise, to the extent authorized by law, all of the powers and authority of
the Board in the management of the business and affairs of the Company.
6
<PAGE>
Messrs. Herbert Conrad, Sim Fass, Moses Marx (a director of the Company who is
not standing for re-election at the Annual Meeting of Stockholders) and David
Tendler and Ms. Faye Wattleton are the current members of the Executive
Committee. During the fiscal year ended December 31, 1997, the Executive
Committee held three meetings.
In November 1989, the Board formed an Audit Committee which was established
to review the internal accounting procedures of the Company and to consult with
and review the Company's independent auditors and the services provided by such
auditors. Messrs. Herbert Conrad, Allan Rosenfield, David Tendler, Virgil
Thompson and Herbert Weissbach are the current members of the Audit Committee.
During the fiscal year ended December 31, 1997, the Audit Committee held three
meetings.
In January 1990, the Board formed a Compensation Committee. In May 1990,
the Board combined the Compensation Committee and the Stock Option Plan
Committee to form the Compensation and Stock Option Committee to review
compensation practices, to recommend compensation for executives and key
employees, and to administer the Company's stock option plans. Messrs. Moses
Marx (a director of the Company who is not standing for re-election at the
Annual Meeting of Stockholders), David Tendler, Virgil Thompson and Dan
Tolkowsky are the current members of the Compensation and Stock Option
Committee. During the fiscal year ended December 31, 1997, the Compensation and
Stock Option Committee held two meetings.
During the fiscal year ended December 31, 1997, the Board of Directors held
four meetings. Each director attended at least 75% of the meetings of the Board
of Directors held when he was a director and of all committees of the Board of
Directors on which he served.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, as well as persons who beneficially own more than ten percent of
the Company's Common Stock, to file initial reports of ownership and reports of
changes in ownership with the SEC. Executive officers, directors and greater
than ten percent beneficial owners are required by the SEC to furnish the
Company with copies of all Section 16(a) forms they file.
Based upon a review of the copies of such forms furnished to the Company
and written representations from the Company's executive officers and directors,
the Company believes that during fiscal 1997 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
ten percent beneficial owners were complied with, except David Haselkorn failed
to file one Form 4 and one Form 5, each for one transaction, on a timely basis.
VOTE REQUIRED
The nine nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy and entitled to vote, a quorum
being present, shall be elected as directors. Only votes cast for a nominee will
be counted, except that the accompanying proxy will be voted for all nominees in
the absence of instruction to the contrary. Abstentions, broker non-votes and
instructions on the accompanying proxy card to withhold authority to vote for
one or more nominees will result in the respective nominees receiving fewer
votes. However, the number of votes otherwise received by the nominee will not
be reduced by such action.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1 - ELECTION OF DIRECTORS" TO BE
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" EACH NOMINEE.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table shows all the cash compensation paid or to be paid by
the Company or its subsidiaries as well as certain other compensation paid or
accrued during the fiscal years indicated to the Chief Executive Officer of the
Company and each of the four other most highly compensated executive officers of
the Company (the "Named Executive Officers") for such period in all capacities
in which they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION(1)
FISCAL ---------------------------- ------------ ---------------
NAME AND PRINCIPAL POSITION(2) YEAR SALARY($) BONUS($)(3) OPTIONS(#)
- ------------------------------ ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Sim Fass............................... 1997 $321,000 $125,000 150,000 $ 4,750(6)
Chairman of the Board, 1996 98,500 110,000 90,000 4,750(6)
President and Chief 1995 282,500 100,000 60,000 4,620(6)
Executive Officer
Marian Gorecki......................... 1997 189,363 65,000 75,000 --
Senior Vice President - 1996 175,000 58,000 55,000 --
Chief Technical Officer 1995 163,102 55,000 35,000 --
David Haselkorn........................ 1997 200,363 90,000 92,500 --
Senior Vice President and Chief 1996 187,626 80,000 75,000 --
Operating Officer; General 1995 177,102 70,000 50,000 --
Manager of BTG-Israel(4)
Nadim Kassem........................... 1997 212,500 40,000 60,000 4,750(6)
Senior Vice President - 1996 200,500 30,000 30,000 4,750(6)
Chief Medical Officer(5) 1995 190,500 25,000 20,000 4,620(6)
William Pursley ....................... 1997 197,500 70,000 70,000 4,750(6)
Senior Vice President-- 1996 182,500 60,000 70,000 66,717(7)
Marketing, Sales and 1995 123,958 -- 75,000 4,620(6)
Commercial Development
</TABLE>
- ------------------
(1) Pursuant to the SEC's rules on executive compensation disclosure, "All
Other Compensation" does not include perquisites because the aggregate
amount of such compensation for each of the persons listed did not exceed
the lesser of (i) $50,000 or (ii) 10 percent of the combined salary and
bonus for such person in each such year.
(2) Each of the Named Executive Officers is a party to an employment agreement
with the Company. See "--Employment Agreements."
(3) Bonuses paid during a fiscal year are for the prior fiscal year.
(4) Dr. Haselkorn resigned from the Company effective April 30, 1998.
(5) Dr. Kassem resigned from the Company effective March 6, 1998.
(6) Represents the Company's matching contribution pursuant to its 401(k)
defined contribution plan.
(7) Represents the Company's matching contribution ($4,750) pursuant to its
401(k) defined contribution plan and the forgiveness of loan ($40,000) and
$21,967 gross-up payment to cover taxes on forgiveness. See "--Employment
Agreements."
8
<PAGE>
<TABLE>
<CAPTION>
The following table sets forth information with respect to option grants in
1997 to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO MARKET APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OR PRICE ON OPTION TERM (3)
OPTIONS FISCAL YEAR BASE PRICE DATE OF EXPIRATION ----------------------
NAME GRANTED(#)(1) (2) ($/SH) GRANT DATE 5% ($) 10% ($)
- ---- ------------- ------------ ----------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> > <C> <C>
Sim Fass.............. 150,000 8.0% $14.125 $14.125 06/18/07 $1,332,750 $3,377,250
Marian Gorecki........ 75,000 4.0% 14.125 14.125 06/18/07 666,375 1,688,625
David Haselkorn....... 92,500 4.9% 14.125 14.125 06/18/07 821,863 2,082,638
Nadim Kassem.......... 60,000 3.2% 14.125 14.125 06/18/07 533,100 1,350,900
William Pursley....... 70,000 3.7% 14.125 14.125 06/18/07 621,950 1,576,050
</TABLE>
- ---------------
(1) Options vest in four equal annual installments commencing on the first
anniversary date of the grant; however, options granted under the Company's
1992 Stock Option Plan and certain other options become immediately
exercisable upon a change in control of the Company. See "--Employment
Agreements." In addition, of Dr. Haselkorn's options to purchase 92,500
shares, options to purchase 7,500 shares were immediately exercisable on
the date of grant.
(2) Based upon options to purchase 1,873,050 shares granted to all employees in
1997.
(3) These amounts represent assumed rates of appreciation in the price of the
Company's Common Stock during the terms of the options in accordance with
rates specified in applicable federal securities regulations. Actual gains,
if any, on stock option exercises will depend on the future price of the
Common Stock and overall stock market conditions. The 5% rate of
appreciation over the 10-year option term of the $14.125 stock price on the
date of grant would result in a stock price of $23.01. The 10% rate of
appreciation over the 10-year option term of the $14.125 stock price on the
date of grant would result in a stock price of $36.64. There is no
representation that the rates of appreciation reflected in this table will
be achieved.
The following table sets forth information with respect to (i) stock
options exercised in 1997 by the Named Executive Officers and (ii) unexercised
stock options held by such individuals at December 31, 1997.
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
OPTIONS HELD AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR END FISCAL YEAR END ($)(1)
ACQUIRED ON VALUE ----------------------------- -------------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sim Fass (2)........... 295,000 $3,716,425 420,000 277,500 $2,362,425 $622,800
Marian Gorecki (3)..... 60,000 652,500 201,250 151,250 1,240,025 368,100
David Haselkorn (4).... 70,000 820,250 211,250 186,250 1,119,250 480,250
Nadim Kassem (5)....... 40,000 412,813 132,500 107,500 606,700 246,350
William Pursley (6).... 18,750 223,829 17,500 160,000 44,800 450,806
</TABLE>
- ---------------
(1) Based on a closing stock price of the Company's Common Stock on December
31, 1997 of $10.75.
(2) During 1997, Dr. Fass exercised options to purchase 25,000 shares of the
Company's Common Stock at a price of $1.06 per share, 155,000 shares of
the Company's Common Stock at a price of $2.34 per share and 115,000
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shares of the Company's Common Stock at a price of $3.00 per share. The
closing price of the Company's Common Stock on the dates of exercise
ranged from $11.875 to $17.125. Dr. Fass has retained ownership of 140,000
of these shares.
(3) On each of February 4, 1997 and July 9, 1997, Dr. Gorecki exercised
options to purchase 30,000 shares of the Company's Common Stock at a price
of $3.00 per share. The closing price of the Company's Common Stock on
February 4, 1997 and July 9, 1997 was $16.875 and $10.875, respectively.
Dr. Gorecki has retained ownership of 10,000 of these shares.
(4) During 1997, Dr. Haselkorn exercised options to purchase 60,000 shares of
the Company's Common Stock at a price of $2.34 per share and 10,000 shares
of the Company's Common Stock at a price of $3.00 per share. The closing
price of the Company's Common Stock on the dates of exercise ranged from
$12.3125 to $15.75.
(5) During 1997, Dr. Kassem exercised options to acquire 30,000 shares of the
Company's Common Stock at a price of $3.00 per share and 10,000 shares of
the Company's Common Stock at a price of $3.50 per share. The closing
price of the Company's Common Stock on the dates of exercise ranged from
$11.125 to $16.75. Dr. Kassem has retained ownership of 35,000 of these
shares.
(6) On May 1, 1997, William Pursley exercised options to acquire 18,750 shares
of the Company's Common Stock at a price of $2.3125 per share. The closing
price of the Company's Common Stock on May 1, 1997 was $14.25.
EMPLOYMENT AGREEMENTS
The Company and Sim Fass entered into an employment agreement dated as of
January 1, 1990 (the "Fass Agreement") pursuant to which Dr. Fass has served as
President and Chief Executive Officer of the Company. At January 1, 1998, the
Fass Agreement was automatically renewed for another two year period, and will
automatically be renewed for successive two year periods thereafter unless
either party gives the other notice of nonrenewal. The Fass Agreement also
provides that the Company will nominate Dr. Fass for election as a director
during all periods when he serves as President and Chief Executive Officer of
the Company. For his services, Dr. Fass is currently entitled to an annual
salary of $335,000, with bonuses to be determined at the discretion of the
Company's Board. In the event Dr. Fass' employment is terminated by the Company
at any time for any reason other than justifiable cause, disability or death, or
the Company shall fail to renew the Fass Agreement at any time within two years
following a "Change in Control of the Company," the Company shall pay Dr. Fass,
for a period equal to the longer of (1) the remaining term of the Fass Agreement
or (2) one year (such period being hereinafter referred to as the "Fass
Severance Period") a monthly payment equal to $20,000, which amount shall be in
lieu of any and all other payments due and owing to Dr. Fass under the terms of
the Fass Agreement. During the Fass Severance Period, the Company shall continue
to provide Dr. Fass with health, life and disability insurance. In the event the
Company elects not to renew the Fass Agreement other than within two years
following a "Change in Control of the Company," the Company is obligated to pay
Dr. Fass a severance payment equal to the sum of one month's salary plus 1/12 of
his most recently declared bonus for each year Dr. Fass has been employed by the
Company.
Pursuant to the Fass Agreement, all options granted or to be granted to Dr.
Fass under any Company stock option plan shall become immediately exercisable
and all restrictions against disposition, if any, which have not otherwise
lapsed shall immediately lapse if (i) Dr. Fass' employment with the Company is
terminated upon a determination by the Company's Board that the performance of
his duties has not been fully satisfactory for any reason that would not
constitute "justifiable cause" (as defined in the Fass Agreement), (ii) Dr. Fass
dies or is disabled (as defined in the Fass Agreement) while employed by the
Company, (iii) Dr. Fass is not nominated by the Company for re-election to the
Company's Board, other than for justifiable cause, (iv) there shall occur a
material reduction in Dr. Fass' duties, other than for justifiable cause, or (v)
any event constituting a "Change in Control of the Company" shall occur while
Dr. Fass is employed by the Company.
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For purposes of the Fass Agreement, the Haselkorn Agreement (as described
below), the Gorecki Agreement (as described below) and the Pursley Agreement (as
described below), a "Change in Control of the Company" shall be deemed to occur
if (i) there shall be consummated (x) any consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation or pursuant
to which shares of the Company's Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's Common Stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders of the
Company shall approve any plan or proposal for liquidation or dissolution of the
Company, or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the Company's
outstanding Common Stock other than pursuant to a plan or arrangement entered
into by such person and the Company, or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the entire Board shall cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
The Company and David Haselkorn entered into an employment agreement dated
as of September 5, 1990 (the "Haselkorn Agreement") pursuant to which Dr.
Haselkorn served as Senior Vice President and Chief Operating Officer of the
Company and General Manager of BTG Israel. At September 5, 1996, the Haselkorn
Agreement was automatically renewed for an additional two year period; however,
Dr. Haselkorn resigned from his position with the Company effective April 30,
1998. For his services, Dr. Haselkorn was entitled to an annual salary of
$208,500 and to bonuses to be determined at the discretion of the Company's
Board. In the event that Dr. Haselkorn's employment was terminated by the
Company at any time for any reason other than justifiable cause, disability or
death, or the Company failed to renew the Haselkorn Agreement at any time within
two years following a "Change in Control of the Company," the Company would have
been obligated to pay Dr. Haselkorn an amount equal to the greater of (i) one
year's salary plus Dr. Haselkorn's most recent bonus, if any, or (ii) the
product of one month's salary plus 1/12 of Dr. Haselkorn's most recently
declared bonus multiplied by the number of years Dr. Haselkorn had been employed
by the Company.
BTG Israel and Marian Gorecki entered into an employment agreement dated as
of September 5, 1990 (the "Gorecki Agreement") pursuant to which Dr. Gorecki
serves as Senior Vice President and Chief Technical Officer of the Company. Dr.
Gorecki also began to serve as General Manager of BTG Israel effective May 1,
1998. At September 5, 1996, the Gorecki Agreement was automatically renewed for
an additional two year period, and the Gorecki Agreement provides that it
automatically will be renewed for successive two year periods unless either
party gives the other notice of nonrenewal. For his services, Dr. Gorecki is
currently entitled to an annual salary of $197,500 and to bonuses to be
determined at the discretion of the Company's Board. In the event that Dr.
Gorecki's employment is terminated by BTG Israel at any time for any reason
other than justifiable cause, disability or death, or BTG Israel shall fail to
renew the Gorecki Agreement at any time within two years following a "Change in
Control of the Company," BTG Israel is obligated to pay Dr. Gorecki an amount
equal to the greater of (i) one year's salary plus Dr. Gorecki's most recent
bonus, if any, or (ii) the product of one month's salary plus 1/12 of Dr.
Gorecki's most recently declared bonus multiplied by the number of years Dr.
Gorecki has been employed by BTG Israel.
The Company and Nadim Y. Kassem, M.D. entered into an employment agreement
dated as of June 1, 1992 (the "Kassem Agreement") pursuant to which Dr. Kassem
served as Senior Vice President--Chief Medical Officer of the Company. At June
1, 1996, the Kassem Agreement was automatically renewed for an additional two
year period; however, as of March 6, 1998, Dr. Kassem resigned from his position
with the Company. For his services, Dr. Kassem was entitled to an annual salary
of $220,000 and to bonuses to be determined at the discretion of the Company's
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<PAGE>
Board. In connection with the commencement of his employment with the Company,
Dr. Kassem was granted options to purchase 100,000 shares of the Company's
Common Stock at an exercise price of $6.50 per share, which options were to
become exercisable in four annual installments of 25,000 shares each. On the
date of grant of the option, the fair market value of the Company's Common Stock
was $7.50. On June 1, 1996 these options became fully exercisable. In connection
with his resignation from the Company, Dr. Kassem will continue to receive his
annual salary and benefits for a period of one year.
The Company and William Pursley entered into an employment agreement dated
as of April 24, 1995 (the "Pursley Agreement") pursuant to which Mr. Pursley
serves as Senior Vice President--Marketing, Sales and Commercial Development of
the Company. At April 24, 1997, the Pursley Agreement was automatically renewed
for an additional two years, and the Pursley Agreement provides that it shall
automatically be renewed for successive two year periods unless either party
gives the other notice of nonrenewal. For his services, Mr. Pursley is currently
entitled to an annual salary of $205,000 and to bonuses to be determined at the
discretion of the Company's Board. In addition, pursuant to the Pursley
Agreement the Company loaned $80,000 to Mr. Pursley. The loans bore interest at
a rate of 6.8% per annum. Pursuant to the terms of one of the loans, the
repayment of $40,000 of indebtedness was forgiven upon his relocation to New
Jersey. The remaining $40,000 of indebtedness was due on June 30, 1997; however,
the loan remains outstanding. Furthermore, in connection with the Pursley
Agreement, Mr. Pursley was granted options to purchase 75,000 shares of the
Company's Common Stock at an exercise price of $2.3125 per share, the fair
market value on the date of grant. Such options become exercisable in four
annual installments of 18,750 shares each. In the event that Mr. Pursley's
employment is terminated by the Company at any time for any reason other than
justifiable cause, disability or death, or the Company shall fail to renew the
Pursley Agreement, the Company is obligated to pay Mr. Pursley an amount equal
to his then annual salary, payable bi-weekly in equal installments.
COMPENSATION OF DIRECTORS
The Company's non-employee directors are paid $10,000 annually in shares of
the Company's Common Stock pursuant to the Company's Stock Compensation Plan for
Outside Directors and $10,000 per annum in cash, payable quarterly. In addition,
non-employee members of the Executive Committee are paid $5,000 per annum in
cash, payable quarterly, and non-employee members of the Audit Committee and the
Compensation and Stock Option Committee receive $1,000 for each committee
meeting attended if not held on the same day as a meeting of the Board of
Directors. All directors are reimbursed for their expenses in connection with
attending meetings of the Company's Board. In addition, the Company pays each
director who attends the Company's research and development meetings a fee of
$1,500 per day.Upon becoming a director of the Company, non-employee directors
also receive a one time grant of options to purchase 20,000 shares of the
Company's Common Stock pursuant to the Company's 1992 Stock Option Plan for
Outside Directors. In addition, each non-employee director receives an option to
purchase 7,500 shares of Common Stock each year upon re-election as a director
pursuant to the Company's Stock Option Plan for Non-Employee Directors.
Stock Option Plan for Non-Employee Directors. Pursuant to the Company's
1997 Stock Option Plan for Non-Employee Directors (the "1997 Directors Option
Plan"), each non-employee director will receive an option to purchase 7,500
shares of Common Stock each year upon re-election as a director. The option
exercise price per share of Common Stock will be the Fair Market Value (as
defined in the 1997 Directors Option Plan) of the Common Stock subject to the
option on the date that the option is granted. Options granted under the 1997
Directors Option Plan have a term of ten years from the date the option is
granted, subject to earlier termination upon such person ceasing to be a
director. A total of 500,000 shares of Common Stock have been reserved for
issuance under the 1997 Directors Option Plan.
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<PAGE>
In general, options become exercisable in four equal installments on the
six month and first, second and third anniversaries of the date of grant. In the
event a director ceases to be a director of the Company for any reason, such
person may exercise the option, to the extent exercisable at the time he or she
ceases to be a director of the Company, within six months after the date he or
she ceases to be a director of the Company (one year if he or she ceases to be a
director of the Company by reason of death). Options may not be transferred
during the lifetime of an optionee. The 1997 Directors Option Plan provides that
the options will become immediately exercisable in full upon a "Change in
Control" (as defined in the 1997 Directors Option Plan) of the Company.
Pursuant to the 1997 Directors Option Plan, on June 18, 1997, Messrs.
Conrad, Marx, Tendler, Thompson and Tolkowsky, who were re-elected directors of
the Company at the 1997 Annual Meeting of Stockholders, each received an option
to purchase 7,500 shares of the Company's Common Stock at a per share exercise
price of $14.125. Upon the re-election of Messrs. Conrad, Rosenfield, Tendler,
Thompson, Tolkowsky and Weissbach and Ms. Wattleton as directors of the Company
at the 1998 Annual Meeting of Stockholders, each of them will receive an option
to purchase 7,500 shares of the Company's Common Stock at a per share exercise
price equal to Fair Market Value on the date of the annual meeting.
Stock Option Plan For Outside Directors. Pursuant to the Company's 1992
Stock Option Plan for Outside Directors (the "1992 Directors Plan"), each person
who is neither an officer nor employee of the Company or its subsidiaries and
who is elected or appointed a director of the Company (the "New Director")
automatically receives on the date of his initial election or appointment to the
Company's Board (the "Grant Date") an option to purchase 20,000 shares of the
Company's Common Stock (the "Option") at a per share exercise price equal to the
Fair Market Value (as defined in the 1992 Directors Plan) of the Company's
Common Stock on the Grant Date.
Options issued under the 1992 Directors Plan may be exercised as to 5,000
shares on the date which is six months and one day after the Grant Date and an
additional 5,000 shares on each of the three successive anniversaries of the
Grant Date. In the event that a New Director ceases to be a director of the
Company, such person may exercise any portion of the Option that is exercisable
by him at the time he ceases to be a director of the Company, but only to the
extent such Option is exercisable as of such date, within six months after the
date he ceases to be a director of the Company. However, in the event a "Change
of Control of the Corporation" (as defined in the 1992 Directors Plan) shall
occur, all options granted under the 1992 Directors Plan which are outstanding
at the time a Change of Control of the Corporation occurs shall immediately
become exercisable. Options granted under the 1992 Directors Plan have a term of
ten years from the Grant Date and are not "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
Mr. Herbert J. Conrad, who was elected a director of the Company on October
14, 1993, was automatically granted an Option at a per share price of $5.8125.
Mr. David Tendler and Mr. Virgil Thompson, who were elected as directors of the
Company on June 2, 1994, were each automatically granted an Option at a per
share exercise price of $2.9375. Mr. Moses Marx, who was elected as a director
of the Company on December 6, 1994, was automatically granted an Option at a per
share exercise price of $2.375. Ms. Wattleton and Messrs. Rosenfield and
Weissbach, who were elected directors of the Company on June 18, 1997, were each
automatically granted an Option at a per share exercise price of $13.9375. If
elected as a director at the Annual Meeting of Stockholders, Mr. Kaplan will
receive an Option to purchase 20,000 shares of the Company's Common Stock at a
per share price equal to the Fair Market Value on the date of the Annual Meeting
of Stockholders.
Stock Compensation Plan for Outside Directors. Pursuant to the Company's
Compensation Plan for Outside Directors (the "Compensation Plan"), each director
of the Company who is neither an officer nor employee of the Company or its
subsidiaries (an "Outside Director") is awarded automatically, in lieu of cash
compensation for
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<PAGE>
services as a director, on the last business day of each full fiscal quarter
subsequent to his election or appointment as an Outside Director, such number of
shares of the Company's Common Stock as has an aggregate Fair Market Value (as
defined in the Compensation Plan) equal to $2,500, based on the price of the
Company's Common Stock on the date of issue (the "Shares"). The Compensation
Plan provides that each Outside Director will be awarded Shares until such time
as he is no longer an Outside Director. If an Outside Director ceases to be an
Outside Director for any reason, the number of Shares which he will be awarded
on the last business day of the Company's next fiscal quarter will be equal to
one-third of the number of Shares which he would have been awarded on such date
for each complete month that he was an Outside Director in the fiscal quarter in
which he ceased to be an Outside Director.
The Compensation Plan allows any Outside Director to defer the issuance and
delivery of the Company's Common Stock awarded under the Compensation Plan until
the termination of his services on the Company's Board or such other time as the
Company's Board may determine. The Company entered into a deferral agreement
with Virgil Thompson in June 1994 and Herbert Weissbach in June 1997 (the
"Deferral Agreements") pursuant to which the issuance and delivery of the
Company's Common Stock to be awarded to each of Mr. Thompson and Mr. Weissbach
under the Compensation Plan has been deferred until after the date he ceases to
be a member of the Company's Board; provided, however, that any shares of the
Company's Common Stock, the issuance of which was deferred, will be issued to
Mr. Thompson and Mr. Weissbach at the time of a change in ownership or effective
control of the Company or a change in ownership of a substantial portion of the
Company's assets, as defined in the Code, except that in determining whether
there is a change in effective control by reason of a stock acquisition, there
must be an acquisition of stock possessing at least 40% (as opposed to the 20%
requirement set forth in the Code), of the total voting power of the Company's
Common Stock.
During the 1997 fiscal year, each Outside Director eligible to receive
shares under the Compensation Plan received 200 shares of the Company's Common
Stock on March 31, 1997, 185 shares of the Company's Common Stock on June 30,
1997, 166 shares of the Company's Common Stock on September 30, 1997 and 232
shares of the Company's Common Stock on December 31, 1997. On March 31, 1997,
June 30, 1997, September 30, 1997 and December 31, 1997, the Fair Market Value
of the Company's Common Stock was $12.50, $13.50, $15.00 and $10.75,
respectively. Each of Herbert Conrad, Moses Marx, David Tendler and Dan
Tolkowsky received an aggregate of 783 shares of the Company's Common Stock
under the Compensation Plan for their services as director during the 1997
fiscal year. Messrs. Hoffer Kaback and Charles MacDonald, who did not stand for
re-election at the 1997 Annual Meeting of Stockholders, each received an
aggregate of 323 shares of the Company's Common Stock under the Compensation
Plan for his services as a director during the 1997 fiscal year. Faye Wattleton
and Allan Rosenfield, who were elected directors at the 1997 Annual Meeting of
Stockholders, each received an aggregate of 398 shares of the Company's Common
Stock under the Compensation Plan for their services as a director during the
1997 fiscal year. On March 31, 1998, each of Ms. Wattleton and Messrs. Conrad,
Marx, Rosenfield, Tendler and Tolkowsky received 294 shares of the Company's
Common Stock under the Compensation Plan.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT TO STOCKHOLDERS
The report of the Compensation and Stock Option Committee (the
"Compensation Committee") 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
under the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The Compensation Committee is currently comprised of four directors. As
members of the Compensation Committee, it is our responsibility to determine the
most effective total executive compensation strategy based on the
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Company's business and consistent with stockholders' interests. Our specific
duties entail reviewing the Company's compensation practices, recommending
compensation for executives and key employees and administering the Company's
stock option plans.
Compensation Philosophy
The Company has been engaged in the research, development, manufacture and
marketing of products for human health care since its inception in 1980. One of
the Company's strengths contributing to its success is the strong management
team--many of whom have been with the Company for a significant period of time.
The central goal of the Compensation Committee is to ensure that the Company's
remuneration policy is such that the Company is able to attract, retain and
reward capable employees who can contribute, both short- and longer-term, to the
continued success of the Company. Equity participation and a strong alignment to
stockholders' interests are key elements of the Company's compensation
philosophy. The Company's executive compensation program consists of three
parts: base salary, annual bonus and stock options. In awarding salary increases
and bonuses, the Compensation Committee did not relate the various elements of
corporate performance to each element of executive compensation. Rather, the
Compensation Committee considered whether the compensation package as a whole
adequately compensated each executive for the Company's performance during 1997
and executive's contribution to such performance.
Under the Omnibus Budget Reconciliation Act ("OBRA") which was enacted in
1993, publicly held companies may be prohibited from deducting as an expense for
federal income tax purposes total remuneration in excess of $1 million paid to
certain executive officers in a single year. However, OBRA provides an exception
for "performance based" remuneration, including stock options. The Company
expects to keep "non-performance based" remuneration within the $1 million limit
to ensure that all executive compensation will be fully deductible.
Nevertheless, although the Committee considers the net cost to the Company in
making all compensation decisions (including, for this purpose, the potential
limitation on deductibility of executive compensation), there is no assurance
that compensation realized with respect to any particular award will qualify as
"performance based" remuneration.
Base Salary
Base salary represents the fixed component of the executive compensation
program. The Company's philosophy regarding base salaries is conservative,
maintaining salaries at approximately competitive industry average.
Determinations of base salary levels are established on an annual review of
marketplace competitiveness with similar biotechnology companies, and on
internal relationships. Periodic increases in base salary relate to individual
contributions to the Company's overall performance, relative marketplace
competitiveness levels, length of service and the industry's annual competitive
pay practice movement. No specific performance targets were established for
fiscal year 1996, which was the base year for determining the salary increases
awarded in June 1997. In determining appropriate levels of base salary, the
Compensation Committee relied in part on several biotechnology industry
compensation surveys.
Bonus
Bonuses represent the variable component of the executive compensation
program that is tied to the Company's performance and individual achievement.
The Company's policy is to base a significant portion of its senior executives'
cash compensation on bonus. In determining bonuses, the Compensation Committee
considers factors such as relative performance of the Company during the year
and the individual's contribution to the Company's performance.
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Stock Options
The Compensation Committee, which administers the Company's stock option
plans, believes that one important goal of the executive compensation program
should be to provide executives, key employees and consultants--who have
significant responsibility for the management, growth and future success of the
Company--with an opportunity to increase their ownership and potentially gain
financially from the Company's stock price increases. This approach ensures that
the best interests of the stockholders, executives and employees will be closely
aligned. Therefore, executive officers and other key employees of the Company
are granted stock options from time to time, giving them a right to purchase
shares of the Company's Common Stock in the future at a specified price. The
grant of options is based primarily on an employee's potential contribution to
the Company's growth and financial results. In determining the size of option
grants, the Compensation Committee considers the number of options owned by such
officer, the number of options previously granted and currently outstanding, and
the aggregate size of the current option grants. Options generally are granted
at the prevailing market value of the Company's Common Stock and will only have
value if the Company's stock price increases. Generally, grants of options vest
in equal amounts over four years and the individual must be employed by the
Company for such options to vest.
1997 Compensation to Chief Executive Officer
In reviewing and recommending Dr. Fass' salary and bonus and in awarding
him stock options for fiscal year 1997 and for his future services, the
Compensation Committee followed its compensation philosophy. Dr. Fass' annual
salary was increased to $335,000 in June 1997, a 9.1% increase over the prior
year, compared to a 5.9% increase in salary in June 1996 over the prior year.
The Compensation Committee recommended this increase in salary over the prior
year in recognition of Dr. Fass' achievements in establishing new commercial
relationships and advancing the commercialization of many of the Company's
products as well as achieving profitable financial results and enhancing
stockholder value and credibility with Wall Street. For the 1996 fiscal year,
Dr. Fass received a bonus of $125,000, representing approximately 28% of his
cash compensation in bonus, which bonus was paid in 1997. The Committee
recommended the particular dollar amount of Dr. Fass' bonus in recognition of
Dr. Fass' efforts in establishing new commercial relationships and advancing the
commercialization of many of the Company's products. In 1997, Dr. Fass was
granted options to purchase 150,000 shares of the Company's Common Stock at an
exercise price of $14.125, the fair market value on the date of grant, under the
terms of the 1992 Stock Option Plan. The options become exercisable in equal
installments over four years beginning on the first anniversary of the date of
grant. The Compensation Committee believes a grant of a stock option to purchase
150,000 shares of the Company's Common Stock is reasonable, based on marketplace
competitiveness, to secure the long-term services of the Company's chief
executive officer and to further align the chief executive officer's
compensation with stockholder interests.
COMPENSATION AND STOCK OPTION COMMITTEE
-- MOSES MARX
-- DAVID TENDLER
-- VIRGIL THOMPSON
-- DAN TOLKOWSKY
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THE COMPANY'S PERFORMANCE
The following Stock Price Performance Graph 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 under the
Exchange Act, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The following graph compares cumulative total return of the Company's
Common Stock with the cumulative total return of (i) the S&P 500 Index, (ii) an
industry peer group index (the "1997 Peer Index") and (iii) the industry peer
group index utilized in 1996 (the "1996 Peer Index"). The graph assumes (a) $100
was invested on December 31, 1992 in each of the Company's Common Stock, the
stocks comprising the S&P 500 Index, the stocks comprising the 1997 Peer Index
and the stocks comprising the 1996 Peer Index, and (b) the reinvestment of
dividends. The 1997 Peer Index consists of Advanced Tissue Sciences, Inc.,
Affymetrix, Inc., Agouron Pharmaceuticals Inc., Amgen Inc., Biogen Inc.,
Centocor Inc., Chiron Corp., COR Therapeutics, Inc., Genentech Inc., Genzyme
Corp., Gilead Sciences Inc., Human Genome Sciences, Inc., ICOS Corporation, IDEC
Pharmaceuticals Corp., Immunex Corp., Incyte Pharmaceuticals, Inc., Interneuron
Pharmaceuticals Inc., Ligand Pharmaceuticals Inc., MedImmune, Inc., Millennium
Pharmaceuticals Inc., North American Vaccine Inc., PathoGenesis Corporation,
Protein Design Labs Inc., SangStat Medical Corporation, Sepracor Inc.,
Transkaryotic Therapies, Inc. and Vertex Pharmaceuticals Inc. The 1996 Peer
Index consists of Agouron Pharmaceuticals Inc., Alkermes Inc., Alliance
Pharmaceutical Corp., Amgen Inc., Biochem Pharma Inc., Biogen Inc., Centocor
Inc., Cephalon Inc., Chiron Corp., Genentech Inc., Genzyme Corp., Gilead
Sciences Inc., IDEC Pharmaceuticals Corp., Immunex Corp., Interneuron
Pharmaceuticals Inc., Isis Pharmaceuticals Inc., Ligand Pharmaceuticals Inc.,
Liposome Company Inc., Millennium Pharmaceuticals Inc., North American Vaccine
Inc., Protein Design Labs Inc., QLT Phototherapeutics, Inc., Sepracor Inc.,
Sequus Pharmaceuticals, Inc. and Vertex Pharmaceuticals Inc. The 1997 Peer Index
and 1996 Peer Index both consist of all biotechnology companies with a market
capitalization at December 31, 1997, and 1996 respectively, of in excess of $400
million; at December 31, 1997 and 1996 the Company had a market capitalization
of $508.5 million and $599.6 million, respectively. The Company changed the
companies in the peer group index because of the change in the companies having
a market capitalization in excess of $400 million.
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STOCK PERFORMANCE GRAPH
BIO-TECHNOLOGY GENERAL CORPORATION
ANALYSIS OF PEER GROUP INDICES
--GRAPHICAL REPRESENTATION OF DATA TABLE BELOW--
1996 Peer 1997 Peer
BTG Index Group Index Group S&P 500
---------------------------------------------------------------
Dec-92 100.000 100.000 100.000 100.000
Dec-93 89.362 103.235 101.102 107.055
Dec-94 36.702 93.883 93.904 105.407
Dec-95 77.660 266.014 235.740 141.363
Dec-96 223.404 361.269 332.801 170.008
Dec-97 182.979 388.270 476.530 222.724
PROPOSAL NO. 2 -- ADOPTION OF 1998
EMPLOYEE STOCK PURCHASE PLAN
On April 15, 1998, the Board of Directors adopted the 1998 Employee Stock
Purchase Plan (the "1998 Plan"), subject to stockholder approval. The Company
believes that the 1998 Plan is an important part of providing incentives and
retaining employees. The Board of Directors believes that the continued growth
and success of the Company will depend, in large part, upon the ability of the
Company to retain as employees knowledgeable persons who, through their efforts
and expertise, can make a significant contribution to the success of the
Company's business and to provide incentive for such employees to work for the
best interests of the Company and its stockholders through ownership of its
Common Stock. In assessing the recommendation of the Board, stockholders should
consider that Dr. Fass, the sole employee-director of the Company, would benefit
from the adoption of the 1998 Plan and thus may be viewed to have a conflict of
interest. The primary features of the 1998 Plan are summarized below. The full
text of the 1998 Plan is set forth in Appendix A to this Proxy Statement and the
following discussion is qualified by reference thereto.
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GENERAL DESCRIPTION OF THE 1998 PLAN
The 1998 Plan is intended to qualify as an employee stock purchase plan
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
Rights granted under the 1998 Plan will run for a maximum of 27 months.
All full-time employees of the Company will be eligible to participate in
the 1998 Plan, except for any employee who owns five percent or more of the
total combined voting power or value of all classes of stock of the Company or
any subsidiary on the date of grant of a right to purchase shares under the 1998
Plan ("Right"). As of April 1, 1998, there are approximately 240 employees of
the Company eligible to participate in the 1998 Plan. Participation by officers
in the 1998 Plan will be on the same basis as that of any other employee. No
employee will be granted a Right which permits such employee to purchase shares
under the 1998 Plan at a rate which exceeds $25,000 of fair market value of such
shares (determined at the time such Right is granted) for each calendar year in
which such Right is outstanding. Rights will not be assignable or transferable
by a participating employee.
Under the 1998 Plan, no Right granted to any participating employee may
cover more than 12,000 shares. The total number of shares reserved for issuance
under the 1998 Plan will be 3,000,000 shares.
From time to time, the Board of Directors may fix a date or a series of
dates on which the Company will grant Rights to purchase shares of Common Stock
under the 1998 Plan at prices not less than 85% of the lesser of (i) the fair
market value of the shares on the date of grant of such Right or (ii) the fair
market value of the shares on the date such Right is exercised.
The Board of Directors or any committee or person(s) to whom it delegates
its authority will administer, interpret and apply all provisions of the 1998
Plan.
The Board of Directors may amend, modify or terminate the 1998 Plan at any
time without notice, provided that no such amendment, modification or
termination may adversely affect any existing Rights of any participating
employee, except that in the case of a participating employee of a foreign
subsidiary of the Company, the 1998 Plan may be varied to conform with local
laws. In addition, subject to certain appropriate adjustments to give effect to
relevant changes in the Company's capital stock, no amendments to the 1998 Plan
may be made without stockholder approval if such amendment would increase the
total number of shares offered under the 1998 Plan or would render Rights
"unqualified" for special tax treatment under the Code.
FEDERAL TAX CONSEQUENCES OF THE 1998 PLAN
The following is intended only as a general summary of the federal income
tax consequences in connection with participation in the 1998 Plan. All tax
matters discussed in this Proxy Statement should be verified with a tax advisor
. No taxable income will be recognized by a participant either at the time a
Right is granted under the 1998 Plan or at the time the shares are purchased.
Instead, tax consequences are generally deferred until a participant disposes of
the shares (e.g., by sale or gift). The federal income tax consequences of a
sale of shares purchased under the 1998 Plan will depend on the length of time
the shares are held after the relevant date of grant and date of exercise, as
described below.
If shares purchased under the 1998 Plan are held for more than one year
after the date of purchase and more than two years from the date of grant, the
participant generally will have taxable ordinary income on a sale or gift of the
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shares to the extent of the lesser of: (i) 15% of the fair market value of the
stock at the date of grant; or (ii) the amount by which the fair market value of
the shares on the date of sale or gift exceeds the purchase price paid by the
participant for the shares. In the case of a sale, any additional gain will be
treated as long-term capital gain. If the shares are sold for less than the
purchase price, there will be no ordinary income, and the participant will have
a long-term capital loss for the difference between the purchase price and the
sale price.
If the stock is sold or gifted within either one year after the date of
purchase or two years after the date of grant (a "disqualifying disposition"),
the participant generally will have taxable ordinary income at the time of the
sale or gift to the extent that the fair market value of the stock at the date
of purchase was greater than the purchase price. This amount will be taxable in
the year of sale or disposition even if no gain is realized on the sale, and the
Company would be entitled to a corresponding deduction. A capital gain would be
realized upon the sale of the shares to the extent the sale proceeds exceed the
fair market value of those shares on the date of purchase. A capital loss would
be realized to the extent the sales price of the shares disposed of is less than
the fair market value of such shares on the date of purchase. Special tax
consequences may follow from dispositions other than a sale or gift.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Company present or represented at the 1998 Annual Meeting of
Stockholders is required for the adoption of the 1998 Employee Stock Purchase
Plan. Broker non-votes with respect to this matter will be treated as neither a
vote "for" nor a vote "against" the matter, although they will be counted in
determining if a quorum is present. However, abstentions will be considered in
determining the number of votes required to attain a majority of the shares
present or represented at the meeting and entitled to vote. Accordingly, an
abstention from voting by a stockholder present in person or by proxy at the
meeting has the same legal effect as a vote "against" the matter because it
represents a share present or represented at the meeting and entitled to vote,
thereby increasing the number of affirmative votes required to approve this
proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Arthur Andersen LLP have been the independent auditors for the Company
since December 1990 and will serve in that capacity for the 1998 fiscal year. A
representative of Arthur Andersen LLP will be present at the Annual Meeting and
will have an opportunity to make a statement if he desires to do so, and will
respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the 1999
Annual Meeting of Stockholders of the Company must be received by the Company no
later than January 5, 1999 for inclusion in the Board of Directors' proxy
statement and form of proxy relating to that meeting.
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OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Annual Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
Roy L. Goldman
Secretary
Dated: April 30, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT
CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: BIO-TECHNOLOGY GENERAL
CORP., ATTENTION: LEAH BERKOVITS, 70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY
08830.
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APPENDIX A
BIO-TECHNOLOGY GENERAL CORP.
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of this 1998 Employee Stock Purchase Plan (the "Plan") is to
provide employees of Bio-Technology General Corp. (the "Company") and its
subsidiaries who wish to become stockholders of the Company an opportunity to
purchase shares of Common Stock of the Company (the "Shares"). The Plan is
intended to qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. ELIGIBLE EMPLOYEES
Subject to the provisions of Sections 7, 8 and 9 below, any individual who
is in the full-time employment of the Company or any subsidiary (as defined in
Section 424(f) of the Code) of the Company on the day on which a Grant Date (as
defined in Section 3 below) occurs is eligible to participate in an offering of
Shares made by the Company hereunder. Full-time employment shall mean customary
employment by the Company or any subsidiary for:
(a) 20 hours or more per week; and
(b) more than five months in the calendar year.
3. GRANT DATES
From time to time, the Board of Directors may fix a date (a "Grant Date")
or a series of dates (each of which is a "Grant Date") on which the Company will
grant rights to purchase Shares ("Rights") to employees eligible to participate.
4. PRICES
The purchase price per Share for Shares covered by a grant of Rights
hereunder shall be determined by the Board of Directors on or prior to the Grant
Date, but in no event shall be less than the lesser of:
(a) eighty-five percent (85%) of the fair market value of a Share on
the Grant Date; or
(b) eighty-five percent (85%) of the fair market value of a Share on
the date such Right is exercised as to that Share.
For purposes of the Plan, the term "fair market value" on any date means:
(a) the closing price (on that date) of the Common Stock on the
principal national securities exchange on which the Common Stock is traded,
if the Common Stock is then traded on a national securities exchange;
(b) the last reported sale price (on that date) of the Common Stock on
the Nasdaq National Market or SmallCap Market, if the Common Stock is then
traded on one of such markets; or
(c) the average of the closing bid and asked prices last quoted (on
that date) by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on a national securities
exchange, the Nasdaq National Market or the Nasdaq SmallCap market.
A-1
<PAGE>
5. EXERCISE OF RIGHTS AND METHOD OF PAYMENT
(a) Rights granted under the Plan will be exercisable on specific
dates as determined by the Board of Directors.
(b) The method of payment for Shares purchased upon exercise of Rights
granted hereunder shall be through regular payroll deductions or by lump
sum cash payment, or both, as determined by the Board of Directors. No
interest shall be paid upon payroll deductions or other payments in
exercise of Rights unless specifically provided for by the Board of
Directors.
6. TERMS OF RIGHTS
Rights granted hereunder shall be exercisable during a twenty-seven (27)
month period beginning on the Grant Date or such shorter period as determined by
the Board of Directors. All Rights granted to an employee shall terminate upon
termination of employment of the employee. Any amounts received or withheld by
the Company from or on behalf of a participating employee with respect to a
Right granted hereunder and not utilized for the purchase of Shares upon
exercise of such Right shall be promptly returned to such employee by the
Company after termination of such Right, except that amounts that were not so
utilized because such amounts were insufficient to purchase a whole Share may be
applied toward the purchase of Shares pursuant to a Right subsequently granted
hereunder, if any.
7. SHARES SUBJECT TO THE PLAN
No more than three million (3,000,000) Shares may be sold pursuant to
Rights granted under the Plan. Appropriate adjustments in the above figure, in
the number of Shares covered by outstanding Rights granted hereunder, in the
exercise price of the Rights and in the maximum number of Shares which an
employee may purchase (pursuant to Section 9 below) shall be made to give effect
to any mergers, consolidations, reorganizations, recapitalizations, stock
splits, stock dividends or other relevant changes in the capitalization of the
Company occurring after the effective date of the Plan, provided that no
fractional Shares shall be subject to a Right and each Right shall be adjusted
downward to the nearest full Share. Any agreement of merger or consolidation
will include provisions for protection of the then existing Rights of
participating employees under the Plan. Either authorized and unissued Shares or
issued Shares heretofore or hereafter reacquired by the Company may be made
subject to Rights under the Plan. If for any reason any Right under the Plan
terminates in whole or in part, Shares subject to such terminated Right may
again be subject to a Right under the Plan.
8. LIMITATIONS ON GRANTS
Anything to the contrary notwithstanding, pursuant to Section 423 of the
Code:
(a) No employee shall be granted a Right hereunder if such employee,
immediately after the Right is granted, owns stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of the Company or any subsidiary, in each case computed in accordance
with Section 423(b)(3) and 424(d) of the Code.
(b) No employee shall be granted a Right which permits his Rights to
purchase Shares under all employee stock purchase plans of the Company and its
subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) (or such other maximum as may be prescribed from time to time by the
Code) of fair market value of such Shares (determined at the time such Right
is granted) for each calendar year in which such Right is outstanding at any
time, all in accordance with the provisions of Section 423(b)(8) of the Code.
A-2
<PAGE>
9. LIMITS ON PARTICIPATION
(a) Participation shall be limited to eligible employees who enroll
under the Plan. All participating employees will have the same rights and
privileges under the Plan to the extent required by Section 423(b)(5) of
the Code.
(b) No Right granted to any participating employee shall cover more
than twelve thousand (12,000) Shares.
10. CANCELLATION OF ELECTION TO PARTICIPATE
An employee who has elected to participate in the Plan may, unless the
employee has waived this cancellation right at the time of such election in a
manner established by the Administrator (as defined in Section 18), cancel such
election as to all (but not less than all) of the Rights granted by giving
written notice of such cancellation to the Company before the next exercise date
specified by the Board of Directors. Any amounts paid by the employee or
withheld for the purchase of Shares from the employee's compensation through
payroll deductions shall be paid to the employee or to the employee's estate,
without interest.
11. TERMINATION OF EMPLOYMENT
Upon termination of employment for any reason, including the death of the
employee, before the date on which an outstanding Right granted under the Plan
is exercisable, such Right shall immediately terminate and amounts paid by the
employee or withheld for the purchase of Shares from the employee's compensation
through payroll deductions shall be paid to the employee or to the employee's
estate, without interest.
12. LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN
The Plan is intended to provide Shares for investment and not for resale.
The Company does not, however, intend to restrict or influence any employee in
the conduct of his or her own affairs. An employee may, therefore, sell Shares
purchased under the Plan at any time the employee chooses, subject to compliance
with any applicable federal or state securities laws; provided, however, that
because of certain federal tax requirements, each employee agrees, by entering
the Plan, promptly to give the Company notice of any such Shares disposed of
within two years after the date of grant of the applicable Right, showing the
number of such Shares disposed of.
13. EMPLOYEE'S RIGHTS AS STOCKHOLDER
No participating employee shall have any rights as a stockholder in the
Shares covered by a Right granted hereunder until such Right has been exercised,
full payment has been made for the corresponding Shares and the purchase has
been entered in the records of the Transfer Agent for the Shares.
14. RIGHTS NOT TRANSFERABLE
Rights under the Plan are not assignable or transferable by a participating
employee.
15. AMENDMENTS OR DISCONTINUANCE OF THE PLAN
The Board of Directors of the Company shall have the right to amend, modify
or terminate the Plan at any time without notice; provided, however, that the
then existing Rights of all participating employees shall not be adversely
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<PAGE>
affected thereby, except that in the case of a participating employee of a
foreign subsidiary of the Company the Plan may be varied to conform with local
laws, and provided further that, subject to the provisions of Section 7 above,
no such amendment to the Plan shall, without the approval of the stockholders of
the Company:
(a) Increase the total number of Shares which may be offered under the
Plan; or
(b) Amend the Plan in any manner which would render Rights granted
hereunder unqualified for special tax treatment under Section 421 of
the Code.
16. EFFECTIVE DATE AND APPROVALS
The Plan shall become effective as of August 1, 1998. The Company's
obligation to offer, sell or deliver its Shares under the Plan is subject to the
approval of the Company's stockholders and any governmental approval required in
connection with the authorized issuance or sale of such Shares and is further
subject to the determination by the Company that all applicable securities laws
have been complied with.
17. TERM OF THE PLAN
No Rights may be granted under the Plan after December 31, 2006.
18. ADMINISTRATION OF THE PLAN
The Board of Directors or any committee or person(s) to whom it delegates
its authority (the "Administrator") shall administer, interpret and apply all
provisions of the Plan. The Administrator may waive such provisions of the Plan
as it deems necessary to meet special circumstances not anticipated or covered
expressly by the Plan. Nothing contained in this Section shall be deemed to
authorize the Administrator to alter or administer the provisions of the Plan in
a manner inconsistent with the provisions of Section 423 of the Code.
A-4
<PAGE>
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BIO-TECHNOLOGY GENERAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1998
Herbert Conrad, Sim Fass and Dan Tolkowsky, and each of them, as the true
and lawful attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote all shares of
Common Stock of Bio-Technology General Corp. held of record by the undersigned
on April 24, 1998, at the Annual Meeting of Stockholders to be held at 11:00
A.M. on Wednesday, June 17, 1998, at The University Club, 1 West 54th Street,
New York, New York, and at any adjournment thereof. Any and all proxies
heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSAL
NOS. 1 AND 2.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
-----------
SEE REVERSE
SIDE
-----------
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- ---
X
- ---
PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
1. Proposal No. 1 - Election of Directors - Nominees are:
Herbert Conrad, Sim Fass, Carl Kaplan, Allan Rosenfield, David Tendler,
Virgil Thompson, Dan Tolkowsky, Faye Wattleton and Herbert Weissbach.
|_| FOR |_| WITHHOLD AUTHORITY to vote for the listed nominees.
FOR all listed nominees (except do not vote for the nominee(s) whose
name(s) appears(s) below):
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2. Proposal No. 2 - Adoption of the Bio-Technology General Corp. 1998 Employee
Stock Purchase Plan.
|_| FOR |_| AGAINST |_| ABSTAIN
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the meeting.
DATED _____________________________, 1998
------------------------------------------
SIGNATURE
------------------------------------------
SIGNATURE IF HELD JOINTLY
THE ABOVE-SIGNED ACKNOWLEDGES RECEIPT OF THE
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND
THE PROXY STATEMENT FURNISHED THEREWITH.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHALL
SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD GIVE FULL TITLE AS SUCH.
IF SIGNOR IS A CORPORATION, PLEASE GIVE FULL CORPORATE NAME BY DULY AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
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