BIO TECHNOLOGY GENERAL CORP, DEFR14A, 2000-08-04

BIO TECHNOLOGY GENERAL CORP
DEFR14A, 2000-08-04
MEDICINAL CHEMICALS & BOTANICAL PRODUCTS

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<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)

<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
</TABLE>

<TABLE>
<S> <C>
BIO-TECHNOLOGY GENERAL CORP.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
</TABLE>

Payment of Filing Fee (Check the appropriate box):

<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
---------------------------------------------------------------
1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
----------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
3) Filing Party:
----------------------------------------------------------
4) Date Filed:
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</TABLE>
<PAGE>
BIO-TECHNOLOGY GENERAL CORP.
70 WOOD AVENUE SOUTH
ISELIN, NEW JERSEY 08830
(732) 632-8800

August 4, 2000

Dear Fellow Stockholder:

You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 9:00 a.m. on Wednesday, September 6, 2000, at The
University Club, 1 West 54th Street, New York, New York.

This year, you are being asked only to elect nine directors to the Company's
Board of Directors. 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, or vote by telephone or electronically, at your earliest convenience.
For those stockholders who plan to be present at the Annual Meeting, please be
advised that The University Club has a dress code which requires gentlemen to
wear a jacket and tie and ladies to wear business attire.

Thank you for your cooperation.

<TABLE>
<S> <C>
Very truly yours,

[SIG]
SIM FASS
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
</TABLE>
<PAGE>
BIO-TECHNOLOGY GENERAL CORP.

---------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

---------------------

New York, New York
August 4, 2000

Notice is hereby given that the Annual Meeting of Stockholders of
Bio-Technology General Corp. will be held on Wednesday, September 6, 2000, at
9:00 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; and

(2) 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 July 15, 2000 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 either complete and date the enclosed form of proxy and return it
promptly in the postage-paid envelope provided or vote by telephone or
electronically through the Internet. Stockholders who attend the Annual Meeting
may revoke their proxy and vote their shares in person.

If you are a registered stockholder (that is, if you hold your stock in
certificate form), and you wish to vote by telephone or electronically through
the Internet, follow the instructions included with your proxy card. If your
shares are held in "street name", please check your proxy card or contact your
broker or nominee to determine whether you will be able to vote by telephone or
electronically.

ROBERT M. SHAW
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, September 6, 2000, 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 August 7,
2000 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.

VOTING AND REVOCABILITY OF PROXY

Stockholders of record can give a proxy to be voted at the Annual Meeting of
Stockholders either (i) by completing and mailing the enclosed proxy card in the
enclosed postage-paid return envelope, (ii) over the telephone by calling a
toll-free number or (iii) electronically, using the Internet. Stockholders who
hold their shares in "street name" must vote their shares in the manner
prescribed by their brokers. Signing and returning the proxy card or submitting
the proxy via the Internet or by telephone does not affect the right to vote in
person at the Annual Meeting.

Registered stockholders may vote electronically through the Internet or by
telephone by following the instructions included with their proxy card.
Stockholders whose shares are registered in the name of a bank or brokerage firm
may be eligible to vote electronically through the Internet or by telephone. A
large number of banks and brokerage firms are participating in the ADP Investor
Communication Services online program. This program provides eligible
stockholders the opportunity to vote via the Internet or by telephone. Voting
forms will provide instructions for stockholders whose bank or brokerage firm is
participating in ADP's program. Stockholders not wishing to vote electronically
through the Internet or whose form does not reference Internet or telephone
voting information should complete and return the enclosed paper proxy card.

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 listed
nominees for director and in accordance with their best judgment on any other
matters which may properly come before the meeting.

IF YOU VOTE BY TELEPHONE OR ELECTRONICALLY USING THE INTERNET, PLEASE DO NOT
MAIL YOUR PROXY.
<PAGE>
RECORD DATE AND VOTING RIGHTS

Only stockholders of record at the close of business on July 15, 2000 are
entitled to notice of and to vote at the Annual Meeting or any and all
adjournments thereof. On July 15, 2000, there were 54,440,161 shares of Common
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
item to be brought before the Annual Meeting of Stockholders is discussed under
that item.

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table sets forth information as of July 15, 2000 (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>
PERCENTAGE OF
AMOUNT AND NATURE OF BENEFICIAL COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP OF COMMON STOCK STOCK
------------------------ ------------------------------- -------------
<S> <C> <C>
Norman Barton......................................... 78,484(1) *
Herbert Conrad........................................ 21,120(2) *
Sim Fass.............................................. 772,410(3) 1.4%
Marian Gorecki........................................ 206,250(4) *
Carl E. Kaplan........................................ 24,562(5) *
Ernest Kelly.......................................... 108,450(6) *
Allan Rosenfield...................................... 32,731(7) *
David Tendler......................................... 47,229(8) *
Virgil Thompson....................................... 84,314(9) *
Dan Tolkowsky......................................... 73,928(10) *
Faye Wattleton........................................ 31,161(11) *
Herbert Weissbach..................................... 29,375(12) *
All directors and executive officers
as a group (14 persons)............................. 1,470,225(13) 2.6%
</TABLE>

------------------------

* Represents less than one percent of the Company's Common Stock.

(1) Consists of 77,500 shares which may be acquired through the exercise of
stock options. Does not include 165,750 shares of Common Stock issuable upon
the exercise of options which are not exercisable within 60 days of
July 15, 2000, including 50,000 shares issuable upon the exercise of options
granted to Mr. Barton on July 31, 2000.

2
<PAGE>
(2) Includes 16,875 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 July 15,
2000.

(3) Includes 682,500 shares which may be acquired through the exercise of stock
options. Does not include 400,000 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of July 15,
2000, including 150,000 shares issuable upon the exercise of options granted
to Dr. Fass on July 31, 2000.

(4) Consists of 198,650 shares which may be acquired through the exercise of
stock options. Does not include 175,750 shares of Common Stock issuable upon
the exercise of options which are not exercisable within 60 days of
July 15, 2000. Dr. Gorecki resigned as an executive officer of the Company
in 2000 and is now serving as a part-time consultant to the Company.

(5) Includes 18,750 shares which may be acquired through the exercise of stock
options. Does not include 8,750 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of July 15,
2000.

(6) Includes 107,500 shares which may be acquired through the exercise of stock
options. Does not include 117,300 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of July 15,
2000, including 35,000 shares issuable upon the exercise of options granted
to Mr. Kelly on July 31, 2000.

(7) Includes 29,375 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 July 15,
2000.

(8) Includes 36,875 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 July 15,
2000.

(9) Includes 83,125 shares which may be acquired through the exercise of stock
options. Does not include 276,875 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days of July 15,
2000, including 125,000 shares issuable upon the exercise of options granted
to Mr. Thompson on July 31, 2000. Mr. Thompson has resigned as an executive
officer effective August 31, 2000, but will remain a director of the
Company.

(10) Includes 16,875 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 July 15,
2000.

(11) Includes 29,375 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 July 15,
2000.

(12) Consists of 29,375 shares of Common Stock 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 July 15, 2000.

(13) Includes 1,290,503 shares of Common Stock which may be acquired through the
exercise of stock options. Does not include 1,482,306 shares of Common Stock
issuable upon the exercise of options which are not exercisable within
60 days of July 15, 2000, including 525,000 shares issuable upon the
exercise of options granted to the Company's executive officers on July 31,
2000.

3
<PAGE>
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.

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:

<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
-------- -------- --------------- -------------------------------------
<S> <C> <C> <C>
Herbert Conrad............................ 67 1993 Retired; President of Roche
Pharmaceuticals Division, Hoffmann-
La Roche from December 1981 until
September 1993. (1)(2)

Sim Fass.................................. 58 1983 Chairman of the Board since March
1997; CEO of the Company since May
1984; Treasurer of the Company since
August 1983; President of Bio-
Technology General (Israel) Ltd.,
the Company's wholly-owned
subsidiary ("BTG Israel"), since
November 1999; President of the
Company and BTG Israel, from May
1984 to May 1999; Chief Operating
Officer of BTG Israel between August
1983 and May 1987. (1)(3)

Carl Kaplan............................... 61 1998 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. (1)(4)(5)

Allan Rosenfield.......................... 67 1997 Dean and DeLamar Professor Mailman
School of Public Health, Columbia
University, since 1986. (2)

David Tendler............................. 62 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)
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
-------- -------- --------------- -------------------------------------
<S> <C> <C> <C>
Virgil Thompson........................... 61 1994 President and Chief Operating Officer
of the Company from May 1999 through
August 2000; President and Chief
Executive Officer of Cytel
Corporation from January 1996 to May
1999; President and Chief Executive
Officer of CIBUS Pharmaceutical,
Inc. from July 1994 until January
1996; President from 1991 through
1993, Chief Operating Officer from
1990 to 1991 and Executive Vice
President from 1986 to 1991 of
Syntex Laboratories, Inc.

Dan Tolkowsky............................. 79 1985 Venture capital investor; 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............................ 57 1997 President, Center for Gender Equality
since 1995; President, Planned
Parenthood Federation of America,
Inc. (New York) from 1978 to 1992.
(1)

Herbert Weissbach......................... 68 1997 Distinguished Research Professor,
Director, Center for Molecular
Biology and Biotechnology, 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/or 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
1999 and 2000.

(5) Member of the Compensation and Stock Option Committee of the Board of
Directors.

5
<PAGE>
Mr. Conrad is a director of Gensia Sicor Inc. and Urocor Inc. Mr. Tendler is
a director of V.I. Technologies, Inc. Mr. Thompson is a director of Questcor
Pharmaceuticals, Inc. and Aradigm Corporation. Ms. Wattleton is a director of
Estee Lauder Companies and Quidel Corporation.

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.
Messrs. Herbert Conrad, Sim Fass, Carl Kaplan and David Tendler and Ms. Faye
Wattleton are the current members of the Executive Committee. During the fiscal
year ended December 31, 1999, the Executive Committee held three meetings.
Mr. Thompson will be appointed a member of the Executive Committee and will
become its Chairman in September 2000.

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 (Chairman) and
Herbert Weissbach are the current members of the Audit Committee. During the
fiscal year ended December 31, 1999, the Audit Committee held two 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. Carl Kaplan, David Tendler
and Dan Tolkowsky (Chairman) are the current members of the Compensation and
Stock Option Committee. During the fiscal year ended December 31, 1999, the
Compensation and Stock Option Committee held two meetings and acted three times
by unanimous consent in lieu of a meeting.

During the fiscal year ended December 31, 1999, the Board of Directors held
six meetings. Each director attended at least 75% of the meetings of the Board
of Directors held when he or she was a director and of all committees of the
Board of Directors on which he or she served.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (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 1999 all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten percent
beneficial owners were complied with, except Faye Wattleton failed to file two
Forms 4 on a timely basis and each of Marian Gorecki, Norman Barton and Eli
Admoni (who served as an executive officer from May 1999 through November 1999)
failed to file one Form 4 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.

6
<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.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION(1)
FISCAL -------------------------- ------------ ---------------
NAME AND PRINCIPAL POSITION(2) YEAR SALARY($)(3) BONUS($)(4) OPTIONS(#)
------------------------------ -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Sim Fass............................. 1999 $372,500 $150,000 150,000 $5,000
Chairman of the Board 1998 347,500 125,000 200,000 5,000
and Chief Executive Officer 1997 321,000 125,000 150,000 4,750

Virgil Thompson...................... 1999 212,308 -- 200,000 3,125
President and Chief Operating 1998 -- -- -- --
Officer(5) 1997 -- -- -- --

Marian Gorecki....................... 1999 236,384 90,000 102,000 --
Senior Vice President-- 1998 209,388 80,000 150,000 --
Chief Technical Officer(6) 1997 189,363 65,000 75,000 --

Norman Barton........................ 1999 206,250 60,000 79,500 5,000
Senior Vice President-- 1998 193,150 50,000 85,000 5,000
Chief Medical Officer 1997 166,400 40,000 35,000 4,750

Ernest Kelly......................... 1999 205,250 60,000 59,800 5,000
Senior Vice President-- 1998 192,504 50,000 40,000 5,000
Quality Assurance, Quality 1997 182,250 65,000 50,000 4,750
Control and Regulatory Affairs
</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. Amount included represents the Company's matching
contribution pursuant to its 401(k) defined contribution plan.

(2) Each of the Named Executive Officers is a party to an employment or
severance agreement with the Company. See "--Employment Agreements."

(3) Effective July 1, 2000, the salary of each of Messrs. Fass, Thompson, Barton
and Kelly was increased to $405,000, $335,000, $225,500 and $220,500,
respectively, from $385,000, $320,000, $217,500 and $212,5000, respectively.

(4) Bonuses paid during a fiscal year are for the prior fiscal year. On
July 19, 2000, each of Messrs. Fass, Thompson, Barton and Kelly was awarded
a bonus of $155,000, $110,000, $65,000 and $62,500, respectively, covering
the period July 1, 1999 to June 30, 2000.

(5) Mr. Thompson joined the Company as President and Chief Operating Officer
effective May 3, 1999 and resigned as an executive officer effective
August 31, 2000. Mr. Thompson will remain a director of the Company. Does
not include compensation received by Mr. Thompson as a director of the
Company prior to May 3, 1999. See "--Compensation of Directors."

(6) Dr. Gorecki ceased to be an executive officer of the Company in 2000. He is
currently serving as a part-time consultant to the Company.

7
<PAGE>
The following table sets forth information with respect to option grants in
1999 to the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OR OPTION TERM(3)
OPTIONS FISCAL YEAR BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) (2) ($/SH) DATE 5% ($) 10% ($)
---- ------------- ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sim Fass......................... 150,000 5.6% $7.406 06/09/09 $698,639 $1,770,489

Virgil Thompson.................. 200,000 7.4 7.250 05/03/09 911,897 2,310,920

Marian Gorecki................... 22,000 0.8 5.938 04/01/09 82,156 208,200
80,000 3.0 7.406 06/09/09 372,607 944,261

Norman Barton.................... 19,500 0.7 5.938 04/01/09 72,820 184,541
60,000 2.2 7.406 06/09/09 279,456 708,195

Ernest Kelly..................... 19,800 0.7 5.938 04/01/09 73,941 187,380
40,000 1.5 7.406 06/09/09 186,304 472,130
</TABLE>

------------------------

(1) Options generally 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. In
addition, the options having an exercise price of $5.938 per share vest on
April 1, 2001.

(2) Based upon options to purchase 2,699,500 shares granted to all employees in
1999.

(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 each of the $5.938 stock price,
the $7.250 stock price and the $7.406 stock price on each date of grant
would result in a stock price of $9.67, $11.81 and $12.06, respectively. The
10% rate of appreciation over the 10-year option term of each of the $5.938
stock price, the $7.250 stock price and the $7.406 stock price on each date
of grant would result in a stock price of $15.40, $18.80 and $19.21,
respectively. There is no representation that the rates of appreciation
reflected in this table will be achieved.

8
<PAGE>
The following table sets forth information with respect to (i) stock options
exercised in 1999 by the Named Executive Officers and (ii) unexercised stock
options held by such individuals at December 31, 1999.

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...................... -- -- 535,000 397,500 $4,350,125 $2,572,950
Virgil Thompson............... -- -- 29,375 205,625 280,234 1,629,766
Marian Gorecki(2)............. 130,100 842,184 141,150 265,750 1,593,956 1,836,490
Ernest Kelly.................. -- -- 80,000 129,800 460,294 875,319
Norman Barton................. -- -- 83,750 175,750 557,481 1,281,593
</TABLE>

------------------------

(1) Based on a closing stock price of the Company's Common Stock on
December 31, 1999 of $15.25.

(2) During 1999, Dr. Gorecki exercised options to purchase 45,000, 30,100,
47,500 and 7,500 shares at an exercise price of $3.00, $3.50, $4.25 and
$4.44, respectively. The closing price of the Company's Common Stock on the
dates of exercise ranged from $6.875 to $11.3125. Dr. Gorecki has sold all
of these shares.

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 (through May 3, 1999) and Chief Executive Officer of the Company. At
January 1, 2000, 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/or Chief Executive
Officer of the Company. For his services, Dr. Fass is currently entitled to an
annual salary of $405,000, 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 the sum of (a) 1/12 of
Dr. Fass' salary at the time of such termination and (b) 1/12 of Dr. Fass' most
recently declared bonus, 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

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<PAGE>
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.

For purposes of the Fass Agreement, the Gorecki Agreement (as described
below) and the Thompson 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.

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 a Senior Vice President and Chief Technical Officer of the Company. At
September 5, 1998, the Gorecki Agreement was automatically renewed for an
additional two year period; however, Dr. Gorecki resigned from his position with
the Company in 2000 and is now serving as a part-time consultant. For his
services, Dr. Gorecki was entitled to an annual salary of $235,000 and to
bonuses to be determined at the discretion of the Company's Board. In the event
that Dr. Gorecki's employment was terminated by BTG Israel at any time for any
reason other than justifiable cause, disability or death, or BTG Israel failed
to renew the Gorecki Agreement at any time within two years following a "Change
in Control of the Company," BTG Israel would have been 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 Ernest Kelly entered into an employment agreement dated as
of January 29, 1996 (the "Kelly Agreement") pursuant to which Mr. Kelly serves
as Senior Vice President--Quality Assurance of the Company. At January 29, 2000,
the Kelly Agreement was automatically renewed for an additional two year period.
For his services, Mr. Kelly is currently entitled to an annual salary of
$220,500 and to bonuses to be determined at the discretion of the Company's
Board. In connection with the commencement of his employment with the Company,
Mr. Kelly was granted options to purchase 50,000 shares of the Company's Common
Stock at an exercise price of $7.1875 per share, the fair market value on the
date of grant. These options became exercisable in four annual installments of
12,500 shares each. In the event that Mr. Kelly'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 Kelly Agreement, the Company is
obligated to pay Mr. Kelly an amount equal to his then annual salary, payable
bi-weekly in equal installments.

The Company and Norman Barton entered into a severance agreement dated as of
April 26, 1996 (the "Barton Agreement"). In March 1998, Dr. Barton was appointed
Senior Vice President-Chief Medical Officer of the Company; prior thereto,
Dr. Barton served as Vice President-Medical Affairs of the

10
<PAGE>
Company. For his services, Dr. Barton is currently entitled to an annual salary
of $225,500 and to bonuses to be determined at the discretion of the Company's
Board. In connection with his appointment to Senior Vice President--Chief
Medical Officer, Dr. Barton was granted options to purchase 25,000 shares of the
Company's Common Stock at an exercise price of $7.875 per share, the fair market
value on the date of grant. These options became exercisable in four equal
annual installments of 6,250 shares each. Pursuant to the terms of the Barton
Agreement, in the event that Dr. Barton's employment is terminated by the
Company at any time for any reason other than justifiable cause, disability or
death, the Company is obligated to pay Dr. Barton an amount equal to his then
annual salary, payable bi-weekly in equal installments.

The Company and Virgil Thompson entered into an employment agreement dated
as of April 27, 1999 (the "Thompson Agreement") pursuant to which Mr. Thompson
served as President and Chief Operating Officer of the Company. The Thompson
Agreement had an initial term of two years from May 3, 1999; however,
Mr. Thompson resigned from his position with the Company effective August 31,
2000. For his services, Mr. Thompson was entitled to an annual salary of
$335,000, with bonuses to be determined at the discretion of the Company's
Board. In the event Mr. Thompson's employment was terminated by the Company at
any time for any reason other than justifiable cause, disability or death, or in
the event the Company failed to renew the Thompson Agreement at any time within
two years following a "Change in Control of the Company," the Company would have
been obligated to pay to Mr. Thompson a severance payment in an amount equal to
the greater of (i) one year's salary plus Mr. Thompson's most recent bonus, if
any, or (ii) the product of one month's salary plus 1/12 of Mr. Thompson's most
recently declared bonus multiplied by the number of years Mr. Thompson was
employed by the Company, payable bi-weekly in equal installments, which amount
would have been in lieu of any and all other payments due and owing to
Mr. Thompson under the terms of the Thompson Agreement. In connection with the
commencement of his employment with the Company, Mr. Thompson was granted
options to purchase 200,000 shares of the Company's Common Stock at an exercise
price of $7.25 per share, the fair market value on the date of the grant. These
options become exercisable in four annual installments of 50,000 shares each;
however, fifty percent of these options which are not then exercisable would
have become exercisable in the event Mr. Thompson's employment was terminated
for any reason other than justifiable cause, disability or death.

The Company and Robert Shaw entered into an Employment Agreement dated as of
July 23, 1999 (the "Shaw Agreement") pursuant to which Mr. Shaw serves as Senior
Vice President and General Counsel. The Shaw Agreement has an initial term of
two years from July 23, 1999 and will thereafter automatically be renewed for
successive two-year periods unless either party gives notice of non-renewal. For
his services, Mr. Shaw is currently entitled to an annual salary of $231,000,
with bonuses to be determined at the discretion of the Company's Board. In the
event Mr. Shaw's employment is terminated by the Company at any time for any
reason other than justifiable cause, disability or death, or in the event the
Company shall fail to renew the Shaw Agreement, the Company shall pay Mr. Shaw a
severance payment equal to his then current salary plus the amount of his last
bonus and Mr. Shaw shall have the right to exercise any options exercisable as
of the date of termination for a six month period following the termination
date. For a twelve month period following the termination date Mr. Shaw shall
continue to participate in the Company's 401(k) plan and in the Company's
health, dental, life and disability insurance programs.

The Company, BTG Israel and Dov Kanner entered into an Employment Agreement
dated as of January 23, 2000 (the "Kanner Agreement") pursuant to which
Mr. Kanner serves as Senior Vice President of the Company and General Manager of
BTG Israel. The Kanner Agreement has an initial term of two years and will
thereafter automatically be renewed for successive two year periods unless
either party gives notice of non-renewal. For his services Mr. Kanner is
currently entitled to receive an annual salary of $235,000, with bonuses to be
determined at the discretion of the Company's Board. In the event Mr. Kanner's
employment is terminated by the Company at any time for any reason other than

11
<PAGE>
justifiable cause, disability or death, or in the event the Company shall fail
to renew the Kanner Agreement, the Company shall pay Mr. Kanner a severance
payment equal to the greater of (i) one year's salary plus Mr. Kanner's most
recent bonus, (ii) the product of one month's salary plus 1/12 of Mr. Kanner's
most recently declared bonus multiplied by the number of years Mr. Kanner has
been employed by the Company or (iii) the amounts Mr. Kanner is entitled to
receive under applicable law. Such severance payment will be reduced by any
payments received though Israeli directors insurance and other similar programs.
In connection with Mr. Kanner assuming these new positions, he was granted
options to purchase 100,000 shares of the Company's Common Stock at an exercise
price of $15.063 per share, the fair market value on the date of the grant.
These options shall become exercisable in four annual installments of 25,000
shares each.

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 $15,000 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.

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 9, 1999,
Messrs. Conrad, Kaplan, Rosenfield, Tendler, Tolkowsky and Weissbach and
Ms. Wattleton, who were re-elected directors of the Company at the 1999 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 $7.40625. Upon the
re-election of Messrs. Conrad, Kaplan, Rosenfield, Tendler, Tolkowsky and
Weissbach and Ms. Wattleton as directors of the Company at the 2000 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.

12
<PAGE>
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. 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. Mr. Carl E. Kaplan, who was elected a director of the Company
on June 17, 1998, was automatically granted an Option at a per share price of
$7.91.

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 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)

13
<PAGE>
of the total voting power of the Company's Common Stock. As a result of
Mr. Thompson's appointment as President and Chief Operating Officer of the
Company in May 1999, Mr. Thompson is no longer eligible, whether by deferral or
otherwise, to receive shares of the Company's Common Stock under the
Compensation Plan other than those shares already accumulated pursuant to the
terms of his Deferral Agreement. Mr. Thompson will become eligible to receive
shares of the Company's Common Stock under the Compensation Plan beginning
September 2000.

During the 1999 fiscal year, each Outside Director eligible to receive
shares under the Compensation Plan received 418 shares of the Company's Common
Stock on March 31, 1999, 384 shares of the Company's Common Stock on June 30,
1999, 260 shares of the Company's Common Stock on September 30, 1999 and 163
shares of the Company's Common Stock on December 31, 1999. On March 31, 1999,
June 30, 1999, September 30, 1999 and December 31, 1999, the Fair Market Value
of the Company's Common Stock was $5.96875, $6.50, $9.59375 and $15.25,
respectively. Each of Messrs. Herbert Conrad, Carl Kaplan, Allan Rosenfield,
David Tendler and Dan Tolkowsky and Ms. Faye Wattleton received an aggregate of
1,225 shares of the Company's Common Stock under the Compensation Plan for their
services as director during the 1999 fiscal year. On March 31, 2000 and
June 30, 2000, respectively, each of Ms. Wattleton and Messrs. Conrad, Kaplan,
Rosenfield, Tendler and Tolkowsky received 161 and 189 shares of the Company's
Common Stock under the Compensation Plan. On those dates, the Fair Market Value
of the Company's Common Stock was $15.50 and $13.1875, respectively.

COMPENSATION AND STOCK OPTION COMMITTEE REPORT TO STOCKHOLDERS

The Compensation and Stock Option Committee of the Board of Directors (the
"Compensation Committee") is currently comprised of three directors. As members
of the Compensation Committee, it is our responsibility to determine the most
effective total executive compensation strategy based on the 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 1999
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

14
<PAGE>
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 1998, which was the base year for determining the salary increases
awarded in June 1999. 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 as well as the
degree to which Executive met certain objectives established for him.

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.

1999 COMPENSATION TO CHIEF EXECUTIVE OFFICER

In reviewing and recommending Dr. Fass' salary and bonus and in awarding him
stock options for fiscal year 1999 and for his future services, the Compensation
Committee followed its compensation philosophy. Dr. Fass' annual salary was
increased to $385,000 in June 1999, a 6.9% increase over the prior year,
compared to a 7.5% increase in salary in June 1998 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. For the 1998 fiscal
year, Dr. Fass received a bonus of $150,000, representing approximately 30% of
his 1998 cash compensation, which bonus was paid in 1999. The Committee
recommended the particular dollar amount of Dr. Fass' bonus in

15
<PAGE>
recognition of Dr. Fass' efforts in establishing new commercial relationships
and advancing the commercialization of many of the Company's products. In 1999,
Dr. Fass was granted options to purchase 150,000 shares of the Company's Common
Stock at an exercise price of $7.406, 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

--CARL KAPLAN
--DAVID TENDLER
--DAN TOLKOWSKY

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

BTG Israel entered into a consulting agreement effective April 1999 with
Dr. Lawrence Weissbach, the son of Herbert Weissbach, a director of the Company.
The agreement provides for Dr. L. Weissbach to act as a consultant to BTG
Israel's research and development department for a term of three years in
connection with a discovery made by Dr. L. Weissbach and several others. The
Company has entered into an exclusive license agreement and a research agreement
with Massachusetts General Hospital relating to the commercialization of this
discovery. Dr. L. Weissbach will receive compensation of $50,000 per contract
year for his services. The Company expects this arrangement will be terminated
by the end of 2000.

THE COMPANY'S PERFORMANCE

The following graph compares cumulative total return of the Company's Common
Stock with the cumulative total return of (i) the Standard & Poors 500 Index
("S&P 500 Index"), (ii) an industry peer group index (the "1998 Peer Index"),
(iii) the Amex Biotech Index and (iv) the Standard & Poors Drug Index ("S&P Drug
Index"). The graph assumes (a) $100 was invested on December 31, 1994 in each of
the Company's Common Stock, the stocks comprising the S&P 500 Index, the stocks
comprising the 1998 Peer Index, the stocks comprising the Amex Biotech Index and
the stocks comprising the S&P Drug Index, and (b) the reinvestment of dividends.
The 1998 Peer Index consists of Alkermes, Inc., Aviron, Cephalon, Inc., COR
Therapeutics, Inc., Coulter Pharmaceutical, Inc., EntreMed, Inc., GelTex
Pharmaceuticals, Inc., Gliatech Inc., Guilford Pharmaceuticals Inc., ImClone
Systems Incorporated, Immune Response, Inc., ISIS Pharmaceuticals, Inc., Ligand
Pharmaceuticals Inc., Neurogen Corporation, North American Vaccine Inc.,
Pharmacyclics, Inc., Protein Design Labs Inc., Regeneron Pharmaceuticals, Inc.,
SangStat Medical Corporation, Scios Inc., Transkaryotic Therapies, Inc.,
Triangle Pharmaceuticals, Inc. and Vical Incorporated. The 1998 Peer Index,
which is included because it was utilized in the Company's proxy statement for
the 1999 Annual Meeting of Stockholders, consists of all publicly-traded
biotechnology companies with a market capitalization at December 31, 1998 of
between $200 million and $500 million, other than NeXstar Pharmaceuticals Inc.
and Sugen, Inc., which are no longer publicly-traded; at that date the Company
had a market capitalization of $360.4 million. The Company decided to change
from a peer index based on market capitalization to well recognized, broad based
biotechnology and pharmaceutical indices because it has determined that these
indices are more indicative of the two industries in which the Company is
engaged and that an index based on market capitalization of companies, including
BTG, could vary significantly from year to year, thereby resulting in a change
in the peer group index each year and making year-to-year comparisons more
difficult for investors.

16
<PAGE>
STOCK PERFORMANCE GRAPH
BIO-TECHNOLOGY GENERAL CORP.
ANALYSIS OF PEER GROUP INDICES

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BTGC S&P 500 1998 PEER GROUP AMEX BIOTECH S&P DRUG
<S> <C> <C> <C> <C> <C>
12/31/94 100.000 100.000 100.000 100.000 100.000
12/31/95 211.594 134.111 215.367 163.015 166.985
12/31/96 608.696 161.286 298.414 175.847 204.607
12/31/97 498.551 211.298 307.017 197.928 319.623
12/31/98 321.739 267.649 266.414 225.603 478.930
12/31/99 707.246 319.910 374.414 477.017 390.143
</TABLE>

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 2000 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

Stockholder proxies obtained by the Board of Directors in connection with
the annual meeting of stockholders in the year 2001 will confer on the
proxyholders discretionary authority to vote on any matters presented at the
meeting which were not included in the proxy statement, unless notice of the
matter to be presented at the meeting is provided to the Company's Corporate
Secretary no later than March 23, 2001.

All stockholder proposals which are intended to be presented at the 2001
Annual Meeting of Stockholders of the Company must be received by the Company no
later than January 7, 2001 for inclusion in the Board of Directors' proxy
statement and form of proxy relating to that meeting.

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.

17
<PAGE>
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
Robert M. Shaw
SECRETARY

DATED: AUGUST 4, 2000

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.

18
<PAGE>
BIO-TECHNOLOGY GENERAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 6, 2000

Herbert Conrad, Sim Fass and Virgil Thompson, 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 July 15, 2000, at the Annual Meeting of Stockholders to be held at 9:00 A.M.
on Wednesday, September 6, 2000, 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--ELECTION OF DIRECTORS.

Proposal -- 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 all listed nominees (except do not vote for the nominee(s) whose
name(s) appears(s) below):

---------------------------------------------------------------------------

/ / WITHHOLD AUTHORITY to vote for the listed nominees.

Discretionary authority is hereby granted with respect to such other matters as
may properly come before the meeting.
<PAGE>
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.

Dated _________________________, 2000
_____________________________________
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.