<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 1999
Commission File Number 0-15313
BIO-TECHNOLOGY GENERAL CORP.
(Exact name of Registrant as specified in its charter)
Delaware 13-3033811
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
70 Wood Avenue South, Iselin, New Jersey 08830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 632-8800
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of each class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of the Registrant's Common Stock held by non-affiliates
at March 17, 2000 (based on the closing sale price for such shares as reported
by the National Association of Securities Dealers Automated Quotation System):
$931,270,144. Common Stock outstanding as of March 17, 2000: 54,166,260 shares.
DOCUMENTS INCORPORATED BY REFERENCE: None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The directors, 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 the Company and Bio-Technology
General (Israel) Ltd., the Company's wholly-
owned subsidiary ("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)
Virgil Thompson 60 1994 President and Chief Operating Officer of the
Company since May 1999; 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 1991 through 1993, Chief Operating
Officer from 1990 to 1991 and Executive Vice
President from 1986 to 1991 of Syntex
Laboratories, Inc.
</TABLE>
2
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<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
- -------- --- --------------- ---------------------------
<S> <C> <C> <C>
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 56 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 68 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>
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(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 "Item 11. 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.
Mr. Conrad is a director of Gensia Sicor Inc., Dura Pharmaceuticals,
Inc. and Urocor Inc. Mr. Tendler is a director of V.I. Technologies, Inc. Mr.
Thompson is a director of Cypros Pharmaceuticals Corp. 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.
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 and Herbert Weissbach are the current members of the Audit
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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 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.
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
4
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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.
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
5
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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) 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
any future awards of shares of the Company's Common Stock issued under the
Compensation Plan other than those shares already accumulated pursuant to the
terms of his Deferral Agreement.
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, each of Ms.
Wattleton and Messrs. Conrad, Kaplan, Rosenfield, Tendler and Tolkowsky received
161 shares of the Company's Common Stock under the Compensation Plan.
6
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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.
EXECUTIVE OFFICERS
See "Item 1. Business-Executive Officers of the Company."
ITEM 11. 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($) BONUS($)(3) 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(4) 1997 - - - -
Marian Gorecki......................... 1999 236,384 90,000 102,000 -
Senior Vice President - 1998 209,388 80,000 150,000 -
Chief Technical Officer 1997 189,363 65,000 75,000 -
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C>
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>
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(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) $50,000 or (ii) 10 percent of the combined salary and
bonus for such person in each such year. Amount included represents the
Company's matching contribution pursuant to its 401(k) defined contribution
plan.
(2) Each of the Named Executive Officers is a party to an employment agreement
with the Company. See "--Employment Agreements."
(3) Bonuses paid during a fiscal year are for the prior fiscal year.
(4) Mr. Thompson joined the Company as President and Chief Operating Officer
effective May 3, 1999. Does not include compensation received by Mr.
Thompson as a director of the Company prior to May 3, 1999. See"Item 10.
Directors and Executive Officers of the Registrant -Directors -Compensation
of Directors."
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The following table sets forth information with respect to option grants in 1999
to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OR OPTION TERM (3)
OPTIONS FISCAL YEAR BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1) (2) ($/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 06/09/09 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>
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(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 $19.21,
respectively. There is no representation that the rates of appreciation
reflected in this table will be achieved.
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The following table sets forth information with respect to (i)
stock options exercised in 1999 by the Named Executive Officers and (ii)
unexercised stock options held by such individuals at December 31, 1999.
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
OPTIONS HELD AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR END FISCAL YEAR END ($)(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 $385,000, 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
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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.
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 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, 1998, 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 $235,000 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
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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 $212,500 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. Such options become 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 Company. For
his services, Dr. Barton is currently entitled to an annual salary of $217,500
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. 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 serves as President and Chief Operating Officer of the Company. The
Thompson Agreement has an initial term of two years from May 3, 1999, and will
thereafter automatically be renewed for successive two year periods unless
either party gives notice of nonrenewal. For his services, Mr. Thompson is
currently entitled to an annual salary of $320,000, with bonuses to be
determined at the discretion of the Company's Board. In the event Mr. Thompson'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 Thompson Agreement at any time within two years following a "Change
in Control of the Company," the Company shall 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 shall be 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
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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. Such
options become exercisable in four annual installments of 50,000 shares each;
however fifty percent of these options which are not then exercisable shall
become exercisable in the event Mr. Thompson's employment is 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 $210,000, 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 $180,000, 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
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 on 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. Such
options shall become exercisable in four annual installments of 25,000 shares
each.
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ITEM 12. BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 31, 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 of
the Company; (iii) each executive officer named in the Summary Compensation
Table (see "Item 11. Executive Compensation"); and (iv) all current 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>
Norman Barton.................................... 36,250 (1) *
Herbert Conrad................................... 15,306 (2) *
Sim Fass......................................... 624,563 (3) 1.1%
Marian Gorecki................................... 108,650 (4) *
Carl E. Kaplan................................... 17,498 (5) *
Ernest Kelly..................................... 73,161 (6) *
Allan Rosenfield................................. 23,792 (7) *
David Tendler.................................... 41,415 (8) *
Virgil Thompson.................................. 81,214 (9) *
Dan Tolkowsky.................................... 68,114 (10) *
Faye Wattleton................................... 22,222 (11) *
Herbert Weissbach................................ 20,625 (12) *
All directors and executive officers
as a group (15 persons)........................ 1,231,771 (13) 2.2%
</TABLE>
- -----------------
* Represents less than one percent of the Company's Common Stock.
(1) Consists of 36,250 shares which may be acquired through the
exercise of stock options. Does not include 157,000 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(2) Includes 11,250 shares which may be acquired through the
exercise of stock options. Does not include 11,250 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(3) Includes 535,000 shares which may be acquired through the
exercise of stock options. Does not include 397,500 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
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<PAGE>
(4) Consists of 108,650 shares which may be acquired through the
exercise of stock options. Does not include 265,750 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(5) Includes 11,875 shares which may be acquired through the
exercise of stock options. Does not include 15,625 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(6) Includes 72,500 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 March 31, 2000.
(7) Includes 20,625 shares which may be acquired through the
exercise of stock options. Does not include 14,375 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(8) Includes 31,250 shares which may be acquired through the
exercise of stock options. Does not include 11,250 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(9) Includes 79,375 shares which may be acquired through the
exercise of stock options. Does not include 155,625 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(10) Includes 11,250 shares which may be acquired through the
exercise of stock options. Does not include 11,250 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(11) Includes 20,625 shares which may be acquired through the
exercise of stock options. Does not include 14,375 shares of
Common Stock issuable upon the exercise of options which are
not exercisable within 60 days of March 31, 2000.
(12) Consists of 20,625 shares of Common Stock which may be
acquired through the exercise of stock options. Does not
include 14,375 shares of Common Stock issuable upon the
exercise of options which are not exercisable within 60 days
of March 31, 2000.
(13) Includes 1,054,153 shares of Common Stock which may be
acquired through the exercise of stock options. Does not
include 1,568,056 shares of common stock issuable upon the
exercise of options which are not exercisable within 60 days
of March 31, 2000.
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ITEM 13. 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.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Bio-Technology General Corp.
By: /s/ SIM FASS
----------------------------
Name: Sim Fass
Title: Chairman and CEO
April 27, 2000
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