<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of
the Securities Exchange Act of 1934
/X/ Filed by the Registrant
/ / Filed by a Party other than the Registrant
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)
(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PHOTOGEN TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
NOTICE OF 2000 ANNUAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT
April 19, 2000
The 2000 annual meeting of stockholders of Photogen Technologies, Inc.,
a Nevada corporation (the "Company"), will be held on Wednesday, May 17, 2000,
at 10:00 a.m., Chicago time, at the Ritz Carlton Hotel, 160 East Pearson Street,
Chicago, Illinois. The purposes of the meeting are to:
1. Elect six directors;
2. Approve an Amendment to Article Fifth of the Company's
Articles of Incorporation increasing the size of the Board of
Directors from six to seven directors and providing that all
vacancies on the Board of Directors shall be filled in the
manner provided in the Company's Bylaws;
3. Approve the 2000 Long Term Incentive Compensation Plan;
4. Ratify the appointment of BDO Seidman, LLP as the Company's
independent certified public accountants for 2000; and
5. Transact such other business as may properly come before the
meeting or any adjournment.
Stockholders are cordially invited to attend the meeting. IF YOU PLAN
TO ATTEND, PLEASE NOTIFY THE COMPANY BY MAY 5, 2000. Space is limited. Only
stockholders of record at the close of business on April 17, 2000 will be
entitled to notice of the annual meeting and to vote at the meeting or any
adjournment. A list of stockholders of the Company entitled to vote at the
meeting will be available for inspection by stockholders at the Company's
office, for ten days before the annual meeting during normal business hours.
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU DECIDE TO ATTEND THE MEETING, YOU MAY, IF DESIRED, REVOKE THE PROXY AND VOTE
THE SHARES IN PERSON. ATTENDANCE AT THIS MEETING DOES NOT ITSELF SERVE TO REVOKE
YOUR PROXY.
By Order of the Board of Directors,
ERIC A. WACHTER, PH.D.
SECRETARY
<PAGE>
PHOTOGEN TECHNOLOGIES, INC.
7327 OAK RIDGE HIGHWAY, SUITE B
KNOXVILLE, TN 37931
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2000
GENERAL INFORMATION
Photogen Technologies, Inc. ("we," "us," "our," or the "Company") is
furnishing this Proxy Statement to holders of its common stock, par value $.001
per share ("Common Stock"), in connection with the solicitation of Proxies on
behalf of the Company's Board of Directors for the Annual Meeting of
Stockholders to be held at 10:00 a.m. Chicago time on Wednesday, May 17, 2000
(the "Annual Meeting"). The Annual Meeting will be held at the Ritz Carlton
Hotel, 160 East Pearson Street, Chicago, Illinois.
SHAREHOLDERS ENTITLED TO VOTE. Only stockholders of record at the close
of business on April 17, 2000 are entitled to notice of and to vote at the
Annual Meeting. Stockholders will be solicited by mail on or about April 20,
2000. On all matters that may come before the Annual Meeting, each holder of
Common Stock will be entitled to one vote for each share of Common Stock he or
she holds at the close of business on April 17, 2000; and each holder of Series
B Convertible Preferred Stock ("Series B Preferred") will be entitled to the
number of votes equal to the number of shares of Common Stock into which such
holder's Series B Preferred is convertible as of April 17, 2000. The holders of
a majority of the shares of voting stock entitled to vote and present in person
or represented by proxy will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence of a quorum; but will not be counted to determine whether any given
proposal has been approved by the stockholders. A broker "non-vote" occurs when
a nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner. At April 1, 2000 there were 37,383,386 shares of Common Stock
outstanding; and 337,056 shares of Series B Preferred outstanding which are
convertible into 337,056 shares of Common Stock as of April 1, 2000.
We are the record holder of 22,955 shares of Common Stock (less than
0.1% of the outstanding Common Stock) as exchange agent for stockholders who
have not turned in their shares of our predecessor (Bemax Corporation) in
exchange for Company shares with respect to previous reverse splits of the
Common Stock. Proxy materials will be delivered to the last known addresses of
those stockholders. If any of those stockholders votes at the Annual Meeting (by
Proxy or attending the Annual Meeting), we will record their votes in accordance
with their direction. We will treat shares held by such stockholders who do not
vote as broker non-votes.
HOW TO VOTE. Please sign, date and return the enclosed Proxy promptly.
If your shares are held in the name of a bank, broker or other holder of record
(that is, in "street name") you will receive instructions from the holder of
record that you must follow for your shares to be voted. The Board of
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<PAGE>
Directors recommends that you vote FOR each of the four proposals to be
considered in the Annual Meeting.
CHANGING YOUR VOTE. Returning your completed Proxy will not prevent you
from voting in person at the Annual Meeting if you are present and wish to vote.
You may attend the Annual Meeting, revoke your Proxy and vote in person if you
desire to do so, but attending the Annual Meeting will not by itself revoke your
Proxy. If your shares are held in the name of a bank, broker or other holder of
record, you must obtain a proxy, executed in your favor, from the holder of
record to be able to vote at the Annual Meeting. You may revoke your Proxy at
any time before it is exercised by either giving written notice of revocation to
the Company's Secretary or by submitting a new Proxy dated after the revoked
Proxy to us before the Annual Meeting.
Shares represented by executed Proxies that are not revoked will be
voted in accordance with the instructions in the Proxy or, in the absence of
instructions, in accordance with the recommendations of the Board of Directors.
The election of directors requires a plurality of the votes cast by the holders
of the voting stock. A "plurality" means that the individuals who receive the
largest number of affirmative votes cast are elected as directors up to the
maximum number of directors to be chosen at the Annual Meeting. The affirmative
vote of the holders of a majority of the voting stock present in person or
represented by proxy and entitled to vote is required to approve any other
matter to be acted upon at the Annual Meeting.
PROXY SOLICITATION. We will pay all expenses of the solicitation,
including the cost of preparing, assembling and mailing the proxy solicitation
materials. We expect to reimburse brokerage houses, custodians, nominees and
fiduciaries on request for reasonable out-of-pocket expenses they incur in
connection with forwarding solicitation material to the beneficial owners of our
stock.
DISSENTERS' RIGHTS OF APPRAISAL. There are no dissenters' rights of
appraisal in connection with the matters to be voted on at the Annual Meeting.
STOCKHOLDER PROPOSALS. Stockholders interested in presenting a proposal
for consideration at our annual meeting of stockholders in 2001 may do so by
following the procedures prescribed in Rule 14a-8 under the Securities Exchange
Act of 1934 and our Bylaws. To be eligible for inclusion, stockholder proposals
must be received by the Company's Corporate Secretary no later than December 31,
2000.
PROPOSAL 1
ELECTION OF SIX DIRECTORS
TO THE COMPANY'S BOARD OF DIRECTORS
DIRECTOR NOMINEES
There are six nominees for election as directors of the Company, each
of whom will hold office until the next annual meeting of shareholders and until
his successor is elected and qualified, or until his earlier death, retirement,
resignation or removal. Three of the Company's six incumbent directors, Eric
Wachter, Ph.D., Robert Weinstein, M.D. and Lester McKeever, Jr., are nominated
for re-election. In addition to the three incumbent directors nominated for
re-election, Theodore Tannebaum, Eugene Golub
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<PAGE>
and Vincent L. Fabiano are nominated for election as directors of the Company.
Except for Mr. McKeever, none of these individuals is a director of any other
company subject to the reporting requirements under the federal securities laws.
Upon election of the six directors currently nominated for election to
the Board of Directors, there will be one director position vacant. We are
currently conducting a search for a new President and CEO, and the Board intends
to appoint this individual to the Board of Directors when selected.
A brief discussion of the business experience of each director and
director nominee during the past five years is set forth below.
VINCENT L. FABIANO, age 47, has been Vice President of Corporate
Development at Elan Pharmaceutical Technologies, Inc. since August 1998. Prior
to that time he was Executive Vice President and Chief Operating Officer of
Transcell Technologies, a pharmaceutical company and Vice President of Business
Development at Sepracor, also a pharmaceutical company. Mr. Fabiano received a
law degree from the University of Houston and a Bachelor of Science in Pharmacy
from the University of Maryland College of Pharmacy.
EUGENE GOLUB, age 69, has served as Chairman of Golub & Company, a
company he founded in 1961, which with its affiliates has been involved in more
than $2 billion in real estate transactions. Under Mr. Golub's leadership, the
Golub companies have owned, developed or operated more than 25 million square
feet of office, residential and mixed-use properties in the United States and
abroad. Mr. Golub is active in numerous Chicago based charitable organizations
and was inducted into the Chicago Association of Realtors Hall of Fame in 1999.
LESTER H. MCKEEVER, JR., age 65, has served as a Director of the
Company since June 17, 1998. Mr. McKeever is Managing Principal of the firm of
Washington, Pittman & McKeever, LLC, a Chicago, Illinois firm of certified
public accountants and consultants providing a broad range of professional
services, and has held a similar position with that firm since 1976. Mr.
McKeever is also Chairman of the Federal Reserve Bank of Chicago, and he serves
as a director of MBIA Insurance Corp. of Illinois, Worldwide Broadcasting, Inc.,
People's Energy Corporation, and Printing Specialities, Inc. Mr. McKeever serves
on several not-for-profit boards and councils, including the Chicago Urban
League (formerly Chairman of the Board), Business Advisory Counsel University of
Illinois College of Commerce at Urbana-Champaign, University of Illinois Board
of Trustees (Treasurer), Illinois Institute of Technology, IIT Chicago Kent
College of Law, and the Chicago Symphony Orchestra Association. Mr. McKeever
received his B.S. degree in accounting from the University of Illinois at
Urbana- Champaign and his J.D. with distinction from the IIT-Chicago Kent
College of Law.
THEODORE TANNEBAUM, age 66, was Chairman of the Board of HMO America,
Inc. and is currently a private investor. During the last five years, Mr.
Tannebaum has also been involved in the development and production of films and
other theatrical productions through Lakeshore Entertainment Film Production Co.
of which he is Chairman of the Board. He received a law degree from DePaul
University and a business degree from Roosevelt University, both in Chicago,
Illinois.
ERIC A. WACHTER, Ph.D., age 37, has served as a Director, Secretary and
employee of the Company since May 16, 1997, and he was appointed as a Vice
President in 1999. He is primarily responsible for developing and demonstrating
the functional feasibility of the laser system hardware,
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<PAGE>
including focusing and targeting. He is also responsible for development of
nontherapeutic laser applications. He received a Ph.D. in chemistry from the
University of Wisconsin-Madison and a B.S. in chemistry (cum laude) in the
honors program from Indiana University, Bloomington. Dr. Wachter is one of the
founders of Photogen L.L.C. and for the three years prior to May 1997 he was
associated with the Oak Ridge National Laboratory. Dr. Wachter is a
physical-analytical chemist who concentrates in the fields of biochemistry,
optical spectroscopy and instrumentation research and development. He has
numerous technical publications in these fields along with numerous U.S.
Patents, patent applications and patent disclosures.
ROBERT J. WEINSTEIN, M.D., age 54, has served as a Director of the
Company since February 28, 1997. He is currently a private investor. During the
last five years, Dr. Weinstein served as Chief Executive Officer of HMO America,
Inc. and subsequently held the same position in United HealthCare of Illinois
when United HealthCare acquired HMO America in 1993. On January 1, 1996 he
became a consultant to United HealthCare Corporation. He is a graduate of the
Chicago Medical School and received a B.A. from Hunter College in New York.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The recent business experience of our other executive officers and
significant employees follows.
TIMOTHY SCOTT, Ph.D., age 42, has served as the Company's Interim
President, CEO, Chief Financial Officer and Treasurer since February 2000 and as
an employee of the Company since November 1, 1997. Dr. Scott is one of the
founders of Photogen, L.L.C. and prior to 1997 he was associated with Oak Ridge
National Laboratory. Dr. Scott has experience in the fields of chemical
separations, material science, and biotechnology. He has numerous technical
publications in these fields, over ten U.S. patents, and has licensed
separations technology for petrochemical processing, solvent extraction, and
analytical chemistry applications. Dr. Scott has a Ph.D. in chemical engineering
from the University of Wisconsin-Madison, and a B.S. in chemical engineering
from the University of Tennessee-Knoxville.
GERALD L. WOLF, Ph.D., M.D., age 62, has served as the Company's
Medical Director since July 1999. For the five years prior to that time he
served as a Director of the Center of Imaging and Pharmaceutical Research at
Massachusetts General Hospital and as a professor at Harvard Medical School. Dr.
Wolf is a leading researcher in the field of interventional radiology whose
primary research focus has been non-invasive and minimally invasive cancer
treatments. He is the author of numerous articles in peer-reviewed journals, and
is an inventor with respect to five world-wide patents. Dr. Wolf graduated from
Harvard Medical School and received his B.S., M.S. in Physiology and Ph.D. in
Physiology and Pharmacology all from the University of Nebraska.
DAVID D. SHAW, Ph.D., age 57, has served as the Company's Vice
President of Clinical Research and Technology Development since November 1999.
Dr Shaw is responsible for directing clinical trial programs leading to Food and
Drug Administration (FDA) approval of the Company's advanced device and drug
technologies. For eight years prior to Dr. Shaw joining the Company, he was Vice
President of Drug Development for Latin America and Canada for Nycomed Amersham
Inc., a pharmaceutical company. Dr. Shaw holds a bachelor's degree in zoology
from the University of Cincinnati, a Master's
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<PAGE>
Degree in Biology from Idaho State University, and a Ph.D. in Medical Physiology
and Biophysics from the University of Nebraska Medical Center.
JAY ZIMMERMAN, M.Ed., age 39, has served as the Company's Vice
President of Clinical Operations since November 1999. For two years prior to
that time, Mr. Zimmerman was Chief Operating Officer for Clinical Trials and
Senior Vice President of WorldCare, Inc. and from 1990 through 1998 he served as
Administrative Director of the Oral and Maxillofacial Surgery Department and of
the Center for Imaging and Pharmaceutical Research at Massachusetts General
Hospital. Mr. Zimmerman received a B.S. in Biology and Education from the
University of South Carolina and a Master of Education in Administrative
Policies Studies and Hospital Administration from the University of Pittsburgh.
DIRECTOR'S MEETINGS AND COMMITTEES
During the 1999 fiscal year, the Board of Directors held five meetings
and acted by unanimous written consent on seven occasions. The Executive
Committee did not hold any meeting or act by unanimous written consent during
the 1999 fiscal year. No incumbent director attended fewer than 75% of all
meetings of the Board of Directors, or fewer than 75% of all meetings of a
committee on which that director served during the past fiscal year.
The Board of Directors has a standing Audit Committee and Compensation
Committee. Dr. Weinstein and Mr. McKeever have been members of the Company's
Audit Committee and Compensation Committee since the formation of those
Committees on June 17, 1998, and they are expected to continue in those
capacities. The Audit Committee has general responsibility for meeting with the
Company's independent public accountants and reviewing the scope and results of
auditing procedures and our accounting procedures and controls. The Audit
Committee also provides general oversight with respect to the accounting
principles employed in our financial reporting. The Compensation Committee is
responsible for reviewing the performance and total compensation package for our
executive officers, including the President and Chief Executive Officer;
considering the modification of existing compensation and employee benefit
programs and the adoption of new plans; administering the terms and provisions
of any equity compensation or stock option plans (including our 1998 Long Term
Incentive Compensation Plan), 401(k), profit sharing plan and similar employee
benefit plans; and reviewing the compensation and benefits, if any, of
consultants and non-employee directors. The administration of option,
compensation or similar plans includes determining, subject to the respective
plan provisions, the individuals to whom awards are granted, the nature of the
awards to be granted, the number of awards to be granted, and the exercise
price, vesting schedule, term and all other conditions and terms of the awards
to be granted. We have no standing nominating committee.
During the 1999 fiscal year, the Compensation Committee met three times
and acted by unanimous written consent on three occasions; and the Audit
Committee met once during the fiscal year ended December 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers, directors and persons who beneficially own more than 10% of
a registered class of our equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
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Executive officers, directors and beneficial owners of more than 10% of our
Common Stock are required by regulations promulgated by the Securities and
Exchange Commission to furnish us with copies of all Section 16(a) forms that
they file. To our knowledge, based solely on a review of the copies of those
reports we received, the executive officers we hired in 1999 filed the requisite
initial reports of ownership on Form 3 on a timely basis after their appointment
by the Board as Vice Presidents; and our executive officers, directors and
greater than 10% stockholders satisfied all other Section 16(a) filing
requirements on a timely basis during the 1999 fiscal year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our Common
Stock as of December 31, 1999 by directors and executive officers, and any
person or group known to us to be the owner of more than five percent of our
Common Stock. Shares beneficially owned by the individuals below through family
partnerships or other entities they control are included in the number of shares
listed for that individual.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock Timothy Scott, Ph.D. (President, Chief 4,507,667 12.06
Executive Officer, Chief Financial
Officer, Treasurer)
7327 Oak Ridge Highway
Suite B
Knoxville, TN 37931
Common Stock Eric A. Wachter, Ph.D. (Director, Vice 4,524,667 12.10
President, Secretary)
7327 Oak Ridge Highway
Suite B
Knoxville, TN 37931
Common Stock Craig Dees, Ph.D. (Director) 4,521,667 12.10
7327 Oak Ridge Highway
Suite B
Knoxville, TN 37931
Common Stock Walter G. Fisher, Ph.D. (Director) 4,504,167 12.05
7327 Oak Ridge Highway
Suite B
Knoxville, TN 37931
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock Robert J. Weinstein, M.D. (Director) 3,455,421 9.24
and
Lois Weinstein
875 N. Michigan Avenue
Suite 2930
Chicago, IL 60611-1901
Common Stock Lester H. McKeever, Jr. (Director) 36,000(1) 0.09
819 South Wabash Avenue
Chicago, IL 60605
Common Stock John Smolik (Director; President & 4,500,267 12.04
CEO of Photogen, Inc.)
7327 Oak Ridge Highway
Suite B
Knoxville, TN 37931
Common Stock Theodore Tannebaum (Director 2,116,921 5.66
Nominee)
875 N. Michigan Avenue
Suite 2930
Chicago, IL 60611-1901
Common Stock Eugene Golub (Director Nominee) 37,924(2) 0.10
625 North Michigan Ave., Ste 2000
Chicago, IL 60611
Common Stock Stuart P. Levine 3,291,621 8.80
875 N. Michigan Avenue
Suite 2930
Chicago, IL 60611-1901
Common Stock Gerald Wolf, Ph.D., M.D. (Vice 75,000(3) 0.20
President - Medical Director)
69 Milk Street, Suite 308
Westborough, MA 01581
- Vincent L. Fabiano (Director Nominee) 0(4) 0
3000 Horizon Drive
King of Prussia, PA 19406
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
- David Shaw, Ph.D. (Vice President - 0 0
Clinical Research and Technology
Development)
69 Milk Street, Suite 308
Westborough, MA 01581
- Jay Zimmerman, M.Ed. (Vice President 0 0
- Clinical Operations)
69 Milk Street, Suite 308
Westborough, MA 01581
Common Stock All directors (including nominees) and 28,279,701 75.65
executive officers as a group
(11 persons)
Common Stock Parties to Voting Agreement(5) 26,013,856 69.59
(6 persons)
</TABLE>
- ---------------------
(1) Includes 4,000 shares subject to vested options.
(2) Includes 5,924 shares of our Series B Convertible Preferred Stock,
which are currently convertible into 5,924 shares of our Common Stock.
(3) Includes 75,000 shares subject to vested options.
(4) Mr. Fabiano is employed by an affiliate of Elan International
Services, Ltd., which owns 12,015 shares of our Series A Convertible
Exchangeable Preferred Stock. The Series A Preferred Stock is convertible into
approximately 567,548 shares of Common Stock under certain circumstances after
October 22, 2001. Mr. Fabiano disclaims beneficial ownership of the Series A
Preferred Stock.
(5) The parties to the Voting Agreement may be deemed to be a "group"
within the meaning of Instruction 7 to Item 403 of Regulation S-B. The Voting
Agreement is described below.
Drs. Wachter, Dees, Fisher, Scott and Mr. Smolik (the "Tennessee
Stockholders") and Dr. Weinstein (the "Chicago Stockholder") are parties to an
Amended and Restated Voting Agreement (the "Voting Agreement"). The Tennessee
Stockholders and Chicago Stockholder together currently own beneficially
26,013,856 shares, or approximately 69.59% of the Company's outstanding common
stock. The Voting Agreement currently provides that the Tennessee Stockholders
and Chicago Stockholder will vote their shares of common stock (i) in accordance
with the unanimous recommendation of the Board of Directors with respect to any
amendments to the Articles of Incorporation or Bylaws, (ii) to fix the number of
directors at six (we expect the Voting Agreement will be amended to provide for
seven directors), (iii) to elect to the Board of Directors four persons
nominated by holders of 80% of the shares of the Tennessee Stockholders and one
person nominated by holders of 80% of the shares of the Chicago Stockholder (and
to remove any such director at the request of the stockholders who nominated
him), and (iv) to fix the number of directors on the Board's Executive
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Committee at three, two of whom will be selected by the Tennessee Stockholders
and one of whom will be selected by the Chicago Stockholder. The election of the
sixth director is not subject to the Voting Agreement; and we expect that the
future election of the seventh director will likewise not be subject to that
agreement. In addition, the Company agreed to comparable voting requirements and
restrictions with respect to its subsidiary Photogen, Inc. in its capacity as
sole stockholder of that corporation. The Voting Agreement has a term of 15
years, so long as the Tennessee Stockholders and Chicago Stockholder are the
beneficial owners of 20% or more of the outstanding Common Stock during that
period. The Tennessee Stockholders and Chicago Stockholder together control
management of the Company.
Mr. Smolik, and Drs. Scott, Wachter, Dees, Fisher, who as of April 1,
2000 collectively hold approximately 22,558,435 shares of Common Stock, have
agreed not to sell or otherwise dispose of those shares for a period ending
August 2001, without the prior written consent of Theodore Tannebaum. Until
December 31, 2000, Mr. Tannebaum must consult with the placement agent for our
private placement of Series B Convertible Preferred Stock concerning any
proposed disposition by those five individuals.
There are no arrangements currently known to us which may result in a
future change of control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transaction between us and our directors, director nominees or
executive officers presently exists. However, we have received a commitment from
one of our principal stockholders and nominee for director, Theodore Tannebaum,
to make a $1 million credit facility available to us. If we use Mr. Tannebaum's
credit facility, borrowings will bear interest at 6% per year and interest only
will be paid annually, with the principal due in five years. The loan would be
secured by a lien on all of our assets.
EXECUTIVE COMPENSATION
The following table sets forth compensation we paid to our executive
officers (the "Named Officers") for services rendered us in all capacities
during the year ended December 31, 1999.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ------------------------
AWARDS PAYOUTS
OTHER -------------------------- ------- ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
SALARY BONUS SATION AWARD(S) OPTIONS PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John Smolik,(1) 1999 $125,000 $ 0 $ 0 0 0 0 $ 0
Former President, 1998 $118,000 - - - - - -
Treasurer, CEO, 1997 $ 85,000 - - - - - -
Chairman, and Chief
Financial Officer
Timothy Scott, Ph.D.(1) 1999 $ 99,999 $ 0 $ 0 0 0 0 $ 0
Interim President, 1998 $ 97,500 - - - - - -
Treasurer, CEO and 1997 $ 85,000 - - - - - -
Chief Financial Officer
Eric A. Wachter, Ph.D.,(2) 1999 $ 99,999 $ 0 $ 0 0 0 0 $ 0
Director, Vice President, 1998 $ 97,500 - - - - - -
Secretary 1997 $ 85,000 - - - - - -
Gerald L. Wolf, Ph.D., M.D.(3) 1999 $190,000 $ 0 $ 0 0 750,000 0 $ 0
Vice President - Medical 1998 -
Director 1997 -
David D. Shaw, Ph.D.(3) 1999 $125,000 $ 0 $ 0 0 170,000 0 $ 0
Vice President - Clinical 1998 -
Research and Technology 1997 -
Development
Jay Zimmerman, M.Ed.(3) 1999 $125,000 $ 0 $ 0 0 170,000 0 $ 0
Vice President - Clinical 1998 -
Operations 1997 -
</TABLE>
(1) Mr. Smolik resigned as President, Treasurer, CEO and Chief
Financial Officer of Photogen Technologies, Inc. on February 3, 2000. He
remains a Director of the Company and President and CEO of Photogen, Inc.
while the Company engages in a search for a new President and CEO. Timothy
Scott was appointed as Photogen Technologies, Inc.'s President, Treasurer,
CEO and Chief Financial Officer on February 3, 2000. Dr. Scott is also
employed as a Chief Operating Officer and a research scientist for Photogen,
Inc.
(2) Two other Directors and Senior Scientists, Walter G. Fisher, Ph.D.
and Craig Dees, Ph.D., received the same compensation as Dr. Wachter during
1997, 1998 and 1999.
(3) These individuals were hired at various times during 1999. The
compensation reported here is their contractual annual salary for a full year.
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<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under our 1998 Long Term Incentive Compensation Plan to the Named
Officers during our last fiscal year.
<TABLE>
<CAPTION>
1999 OPTION GRANTS
Individual Grants
--------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration
Name Granted (#)(1) In 1999 ($/Sh) Date
------ -------------- --------- -------- ----------
<S> <C> <C> <C> <C>
John T. Smolik 0 0 0 0
Timothy Scott, Ph.D. 0 0 0 0
Eric A. Wachter, Ph.D. 0 0 0 0
Gerald L. Wolf, Ph.D., M.D. 750,000 67.7 $9.375 7/23/09
David D. Shaw, Ph.D. 150,000 13.5 $15.25 11/01/09
20,000 1.8 $18.125 11/30/09
Jay Zimmerman, M.Ed. 170,000 15.3 $18.125 11/30/09
</TABLE>
- ----------------------
(1) The options were granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. A portion of
the options become exercisable on various dates and other options
become exercisable upon the occurrence of various performance criteria.
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<PAGE>
The following table sets forth information about the Named Officers
concerning the exercise of options during the last fiscal year and unexercised
options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
1999 OPTION EXERCISES AND YEAR-END VALUES
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money Options at Year
On Value Options at Year end 1999 (#) End 1999 ($)(1)
Exercise Realized ------------------------------- -------------------------------
NAME (#) ($) Exercisable Unexercisable Exercisable Unexercisable
------ -------- ----- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
John T. Smolik 0 0 0 0 0 0
Timothy Scott, Ph.D. 0 0 0 0 0 0
Eric A. Wachter, Ph.D. 0 0 0 0 0 0
Gerald L. Wolf, Ph.D., M.D. 0 0 75,000 675,000 684,375 6,159,375
David D. Shaw, Ph.D. 0 0 0 170,000 0 495,000
Jay Zimmerman, M.Ed. 0 0 0 170,000 0 63,750
</TABLE>
- ----------------------
(1) For purposes of this table, the "value" of stock options was determined
by the difference between the exercise price and $18.50, the closing
price for Common Stock on the last business day of the fiscal year.
Shares acquired on exercise of these options are not registered under
the Securities Act of 1933 and are not freely saleable except in
compliance with exemptions from registration, including the holding
period and other requirements of Rule 144 thereunder. Consequently,
the values set forth in the table are only theoretical values and may
not accurately represent actual market value.
We have Employment Agreements in place with Drs. Scott, Wachter,
Fisher, Dees, Wolf and Shaw and with Messrs. Smolik and Zimmerman. Each
Employment Agreement has a term expiring between 2002 and 2003 (subject to
earlier termination for cause) and provides that while the individual is
employed by us and for a period of one or two years after termination he will
not engage in activities which compete with our business. The Employment
Agreements also require the employee to disclose to the Board of Directors
all inventions or other intellectual property discovered or made by the
employee during his employment and twelve months thereafter, if those
inventions are related to or useful in our business, or result from duties
assigned to that individual or from the use of any of our assets or
facilities. Drs. Scott, Wachter, Fisher, Dees, Wolf, Shaw and Messrs. Smolik
and Zimmerman each receive typical health, life and disability insurance
benefits that are available to our other salaried employees. These
individuals are also eligible to defer a portion of their salary through our
401(k) plan, but the Company does not match or make any contributions to the
401(k) plan nor does the Company maintain a pension plan.
Officers generally serve at the discretion of the Board of Directors.
We have no compensatory plans or arrangements resulting from the resignation,
retirement or any other termination of an executive officer's employment with us
or from a change in control.
Our directors receive no specified compensation for serving as
directors, and have no standard arrangements providing for such compensation. In
August 1998, Mr. McKeever received an award of non-qualified options under our
1998 Long Term Incentive Compensation Plan to acquire 20,000 shares of Common
Stock at an exercise price of $13.25. These options vest over five years from
the date of grant.
-12-
<PAGE>
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
On February 3, 2000, the Board of Directors unanimously approved
amending the Company's Articles of Incorporation (subject to stockholder
approval at the Annual Meeting) to increase the size of the Board of Directors
from six to seven directors and to provide that all vacancies on the Board of
Directors shall be filled as provided in the Company's Bylaws. The Articles of
Incorporation currently provide that there will be six directors on the
Company's Board of Directors and vacancies will be filled by vote of the
stockholders. As amended, Article Fifth would read as follows:
FIFTH: (a) The governing board of the Corporation shall be
styled as a "Board of Directors," and any member of said Board shall be
styled as a "director."
(b) The authorized number of members constituting the
Board of Directors of the Corporation is seven (7).
(c) All vacancies on the Board of Directors, including
those caused by an increase in the number of directors, shall be
filled in the manner provided by the Bylaws.
After the Annual Meeting, the Board of Directors plans to amend the
Company's Bylaws to provide that vacancies on the Board (resulting from an
increase in the size of the Board or a director's resignation or removal)
arising between regular elections for directors will be filled by a majority of
the remaining directors then in office. These proposed changes to the Articles
of Incorporation and Bylaws are part of our plan to create a more diverse and
flexible management structure. Increasing the size of the Board to include seven
members will enable us to utilize the insight and expertise of an additional
director. We also believe that amending the Articles of Incorporation to enable
the directors to fill vacancies on the Board existing between regular elections
should enhance our flexibility by enabling us to appoint a director without
having to call a special meeting of the stockholders. We presently expect the
seventh Board seat to be filled by our President and Chief Executive Officer
when chosen.
In keeping with our desire for greater flexibility, the Board also
intends to amend the Company's Bylaws to eliminate the requirement of unanimous
Board approval for certain material transactions. The unanimous approval
requirement will be changed to a requirement that five of seven directors
approve certain matters and transactions, and that a majority approve certain
other matters. (We expect to make comparable changes to the Charter and Bylaws
of Photogen, Inc. after the Annual Meeting.)
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION INCREASING THE SIZE OF THE BOARD OF
DIRECTORS FROM SIX TO SEVEN DIRECTORS AND PROVIDING THAT ALL VACANCIES OF THE
BOARD OF DIRECTORS SHALL BE FILLED AS PROVIDED FOR IN THE COMPANY'S BYLAWS.
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<PAGE>
PROPOSAL 3
APPROVAL OF THE 2000 STOCK OPTION PLAN
The Board of Directors believes that it is in the Company's best
interests to continue the practice of making stock options available to those
employees responsible for significant contributions to our business. The Board
believes that the equity stake in our development and success afforded by stock
options provides key employees with an incentive to continue to energetically
apply their talents to our business.
In 1998, we established the 1998 Long Term Incentive Compensation Plan
(the "1998 Plan") enabling our Compensation Committee to award options to
purchase up to 2 million shares of Common Stock. Since 1998, the Compensation
Committee has totaling 1,117,500 shares. We believe this option program has been
an important component in our ability to attract talented professionals. There
are now only 882,500 shares available under the 1998 Plan.
As a result, on February 3, 2000, the Board of Directors unanimously
approved the 2000 Long Term Incentive Compensation Plan (the "2000 Plan") and
directed that it be submitted for consideration and action at the Annual
Meeting. A majority of the shares voted at the annual meeting must vote in favor
of the 2000 Plan for it to be adopted. If the 2000 Plan is approved by the
stockholders, options will not be granted under the 2000 Plan until all options
have been granted under the existing 1998 Long Term Incentive Compensation Plan.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 LONG TERM
INCENTIVE COMPENSATION PLAN.
The following is a brief but not comprehensive summary of the 2000 Long
Term Incentive Compensation Plan ("2000 Plan") which in most material respects
is nearly identical to the 1998 Long Term Incentive Compensation Plan. The
complete text of the 2000 Plan is attached as Annex B and you should refer to
that Annex for a complete statement of the Plan's provisions.
INTRODUCTION. The 2000 Plan is intended to advance our interests by
providing key employees and certain consultants with additional incentives to
promote the success of our business, to increase their proprietary interest in
our success and to encourage them to remain in our employ. The Board and its
Compensation Committee believe that the 2000 Plan is a necessary tool to help us
compete effectively with other enterprises for the services of new employees and
to retain key employees and directors, all as may be required for the future
development of our business. We cannot determine at this time how many potential
consultants or employees will be eligible for receipt of awards under the 2000
Plan. The Board presently contemplates that current employee directors will not
be considered for awards under the 2000 Plan during our 2000 fiscal year.
Each director, each nominee for director and each officer and employee
of the Company has, by reason of being eligible to receive awards under the 2000
Plan, an interest in seeing that the 2000 Plan is adopted by the stockholders.
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<PAGE>
NATURE OF AWARDS TO BE GRANTED PURSUANT TO THE 2000 PLAN. The 2000 Plan
provides for the grant of options intended to qualify as "incentive stock
options" ("ISOs") under Section 422(b) of the Internal Revenue Code of 1986 (the
"Code") and non-qualified stock options ("NQSOs") and Restricted Stock Awards.
The 2000 Plan also permits awards of restricted stock.
COMMON STOCK SUBJECT TO THE 2000 PLAN. The aggregate number of shares
of Common Stock covered by the 2000 Plan is 2,000,000 shares.
Shares issued upon exercise of options or awards of Restricted Stock
under the 2000 Plan may be either authorized but unissued shares or shares
re-acquired by the Company. If, on or prior to the termination of the 2000 Plan,
an award expires or is terminated for any reason without having been exercised
or vested in full, the unpurchased or unvested shares will again become
available for the grant of awards under the 2000 Plan.
The purchase price of the shares of Common Stock covered by each NQSO
will be determined by the Compensation Committee and will be at least the par
value of the shares. ISOs will have an exercise price of at least 100% of the
fair market value of the Common Stock at the time the option is granted,
determined by reference to the closing sale price at which the Common Stock
trades on the principal securities exchange on which the shares are traded.
No option granted to any person who, at the time of such grant, owns
(taking into account the attribution rules of Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
our stock or of the stock of any of our corporate subsidiaries, may be
designated as an ISO unless at the time of such grant the purchase price of the
shares of Common Stock covered by such option is at least 110% of the fair
market value, but in no event less than the par value, of such shares. The
aggregate fair market value (determined at the time each ISO is granted) of the
shares of Common Stock with respect to which ISOs issued to any one person are
exercisable for the first time during any calendar year may not exceed $100,000.
Awards of Restricted Stock under the 2000 Plan will be made at the
discretion of the Compensation Committee and will consist of shares of Common
Stock granted to a participant and covered by a Restricted Stock award
agreement. At the time of an award, a participant will have the benefits of
ownership in respect of such shares, including the right to vote such shares and
receive dividends thereon and other distributions, subject to the restrictions
in the 2000 Plan and in the Restricted Stock award agreement. The shares will be
legended and, at our option, may be held in escrow and may not be sold,
transferred or disposed of until such restrictions have lapsed. Each award may
be subject to a lapsing formula pursuant to which the restrictions on
transferability lapse over a particular time period. The Compensation Committee
has broad discretion as to the specific terms and conditions of each award,
including applicable rights upon certain terminations of employment.
ADMINISTRATION OF THE 2000 PLAN. The 2000 Plan will be administered by
the Compensation Committee. The Compensation Committee has full and exclusive
authority to, among other things, determine the grant of awards under the 2000
Plan. Dr. Weinstein and Mr. McKeever currently serve as the members of the
Compensation Committee.
PURCHASE OF COMMON STOCK UNDER THE 2000 PLAN. Each award granted under
the 2000 Plan will be granted pursuant to and subject to the terms and
conditions of an award agreement (an "Award
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<PAGE>
Agreement") to be entered into between the Company and the awardholder at the
time of the grant. Any Award Agreement will incorporate by reference all of the
terms and provisions of the 2000 Plan as in effect at the time of grant and may
contain other terms and provisions as may be approved by the Compensation
Committee.
The expiration date of an award granted under the 2000 Plan will be
determined by the Compensation Committee at the time of grant. Each award will
become exercisable or vested in whole, in part or in installments, at the time
or times as the Compensation Committee may prescribe and specify in the Award
Agreement.
In the event of a "Change in Control" (defined in the 2000 Plan) of the
Company, awards granted under the 2000 Plan which, by their terms, vest or are
exercisable in installments, will become immediately exercisable or vested in
full. These provisions of the 2000 Plan may have some deterrent effect on
certain mergers, tender offers or other takeover attempts, thereby having some
potential adverse effect on the market price of our Common Stock.
The exercise price for options granted under the 2000 Plan may be paid
in any of the following ways, which may be combined for any given exercise: (i)
the exercise price may be paid in cash or its equivalent; (ii) the exercise
price may be paid by tendering previously acquired shares of Common Stock having
a fair market value equal to the aggregate exercise price for the options being
exercised; or (iii) subject to applicable requirements of the Exchange Act, the
optionholder may deliver with his or her exercise notice irrevocable
instructions to a broker to promptly deliver to us an amount of sale or loan
proceeds sufficient to pay the exercise price.
Awards granted under the 2000 Plan are assignable or transferable by
will or pursuant to the laws of descent and distribution or as otherwise
specifically permitted by the Award Agreement or by the Compensation Committee,
and options will be exercisable during the awardholder's lifetime by the
awardholder himself or herself or any permitted transferee. No holder of any
option will have any rights to dividends or other rights of a stockholder with
respect to shares subject to an option before exercising the option.
TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY OF OPTIONHOLDER. Each
option, to the extent it has not been previously exercised, will terminate upon
the earliest to occur of: (i) the expiration of the option period set forth in
the Award Agreement; (ii) for ISOs, the expiration of three months following the
Participant's retirement (following the Participant's retirement, NQSOs will
terminate upon the expiration of the option period set forth in the Award
Agreement); (iii) the expiration of 12 months following the Participant's death
or disability; (iv) immediately upon termination for cause; (v) the expiration
of 90 days following the Participant's termination of employment for any reason
other than cause, Change in Control, death, disability, or retirement; or (vi)
at such other time and on such conditions provided for in the Award Agreement.
Upon a termination of employment related to a Change in Control, options will be
treated in the manner set forth in the Change of Control provisions.
Upon a Participant's death, disability, or retirement, all Restricted
Stock will vest immediately. Each Award Agreement will set forth the extent to
which the Participant will have the right to retain unvested restricted shares
following termination of the Participant's employment with the Company in all
other circumstances. Such provisions will be determined in the sole discretion
of the Compensation Committee, will be included in the Award Agreement entered
into with each Participant, need not be
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<PAGE>
uniform among all shares of Restricted Stock issued pursuant to the 2000 Plan,
and may reflect distinctions based on the reasons for termination of employment.
EXPIRATION, TERMINATION AND AMENDMENT OF THE 2000 PLAN. The 2000 Plan
may at any time be terminated, modified, altered, suspended or amended by the
Board of Directors or the Compensation Committee. The Board of Directors or the
Compensation Committee may, insofar as permitted by law, from time to time with
respect to any shares of Common Stock at the time not subject to options or
other awards, suspend or discontinue the 2000 Plan or revise or amend it in any
respect whatsoever, except that, without approval of the stockholders of the
Company, no such revision or amendment may increase the number of shares
available for grants of ISOs under the 2000 Plan or alter the class of
participants in the 2000 Plan. Subject to the provisions described above, the
Board of Directors or the Compensation Committee will have the power to amend
the 2000 Plan and any outstanding awards granted thereunder in such respects as
the Board of Directors or the Compensation Committee may, in its sole
discretion, deem advisable in order to incorporate in the 2000 Plan or any such
award any new provision or change designed to comply with or take advantage of
requirements or provisions of the Code or other statute, or rules or regulations
of the Internal Revenue Service or other federal or state governmental agency
enacted or promulgated after the adoption of the 2000 Plan.
FEDERAL TAX CONSEQUENCES. We believe that the following generally
summarizes the federal income tax consequences of awards under the Plan for
participants and the Company. A participant will not be deemed to have received
any income subject to tax at the time a stock option (including an ISO) or
Restricted Stock award that is subject to conditions, restrictions or
contingencies is awarded, nor will we be entitled to a tax deduction at that
time. When a stock option (other than an ISO) is exercised, the participant will
be deemed to have received an amount of ordinary income equal to the excess of
the fair market value of the shares purchased over the exercise price. The
income tax consequences of Restricted Stock Awards will depend on how the awards
are structured, but generally, a participant will be deemed to have ordinary
income at the time a Restricted Stock Award is distributed to him free of all
conditions, restrictions and contingencies. In each case, the Company will be
allowed a tax deduction in the year and in an amount equal to the amount of
ordinary income that the participant is deemed to have received. The extent of
the deduction for certain highly compensated employees may be limited to $1
million annually for performance based awards under Section 162(m) of the
Internal Revenue Code.
If an ISO is exercised by a participant who satisfies certain
employment requirements at the time of exercise, the participant will not be
deemed to have received any income subject to tax at such time, although the
excess of the fair market value of the common stock so acquired on the date of
exercise over the exercise price will be an item of tax preference for purposes
of the alternative minimum tax. Section 422 of the Code provides that if the
Common Stock is held at least one year after the exercise date and two years
after the date of grant, the participant will realize a long-term capital gain
or loss upon a subsequent sale, measured as the difference between the exercise
price and the sales price. If Common Stock acquired upon the exercise of an ISO
is not held for one year, a "disqualifying disposition" results, at which time,
the participant is deemed to have received an amount of ordinary income equal to
the lesser of (a) the excess of the fair market value of the Common Stock on the
date of exercise over the exercise price or (b) the excess of the amount
realized on the disposition of the shares over the exercise price. If the amount
realized on the "disqualifying disposition" of the Common Stock exceeds the fair
market value on the date of exercise, the gain on the excess of the ordinary
income portion will be treated as a capital gain. Any loss on the disposition of
Common Stock acquired through the exercise of an ISO is a capital loss. No
income tax deduction will be allowed to us with respect to
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<PAGE>
shares of Common Stock purchased by a participant through the exercise of an
ISO, provided there is no "disqualifying disposition" as described above. In the
event of a "disqualifying disposition", we are entitled to a tax deduction equal
to the amount of ordinary income recognized by the participant.
NEW PLAN BENEFITS. No awards have been granted under the 2000 Plan. The
Board of Directors contemplates that no Awards under the 2000 Plan will be given
to current employee directors during the fiscal year ending December 31, 2000 in
view of their existing substantial holdings in the Company. Because the 2000
Plan gives broad discretion with respect to the Awards to the Compensation
Committee we cannot determine the amount of the Awards that would have been
granted to the eligible officers, directors and key employees during the fiscal
year ending December 31, 1999 at this time. During the 2000 fiscal year the
Company may consider hiring additional employees and/or consultants who may
become eligible for receipt of Awards under the 2000 Plan. At this point,
however, we cannot provide information as to the amount of the Awards, if any,
which would be granted to under the 2000 Plan.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BDO Seidman, LLP, Chicago, Illinois, has served as independent
certified public accountants for us and our predecessors and subsidiaries since
1995, including the 1999 fiscal year. The Board of Directors has approved
retaining that firm for the 2000 fiscal year. We expect that a representative of
BDO Seidman, LLP will be present at the Annual Meeting and will be available to
answer appropriate questions from stockholders.
Proposal Number 4 at the Annual Meeting is to ratify the selection of
BDO Seidman, LLP as our independent certified public accountants for 2000.
Although the appointment of independent certified public accountants is not
required to be approved by the stockholders, the Board of Directors has decided
to ascertain the position of the stockholders on that appointment. The Board
will reconsider the appointment of BDO Seidman, LLP if it is not ratified.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF BDO SEIDMAN, LLP AS
THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTS FOR 2000.
OTHER MATTERS
If any other matters are properly presented at the Annual Meeting,
including a motion to adjourn, the persons named as Proxies will have discretion
to vote on those matters according to their best judgment to the same extent as
a person delivering a Proxy would be entitled to vote. At the date this Proxy
Statement went to press, we did not anticipate that any other matters would be
raised at the Annual Meeting.
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<PAGE>
ANNEX A
PHOTOGEN TECHNOLOGIES, INC.
2000 LONG TERM INCENTIVE COMPENSATION PLAN
1. ESTABLISHMENT, OBJECTIVES AND DURATION.
a. ESTABLISHMENT OF THE PLAN. Photogen Technologies, Inc. hereby
establishes an incentive compensation plan to be known as the
"Photogen Technologies, Inc. 2000 Long Term Incentive
Compensation Plan" (the "Plan"), as set forth in this
document. The Plan permits the grant of Incentive Stock
Options, Nonqualified Stock Options and Restricted Stock.
b. OBJECTIVES OF THE PLAN. The objectives of the Plan are to
optimize the profitability and growth of the Company through
the use of incentives which are consistent with the Company's
objectives and which link the interests of Participants to
those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance;
and to promote teamwork among Participants. The Plan is
further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of
Participants who make significant contributions to the
Company's success and to allow Participants to share in the
success of the Company.
c. DURATION OF THE PLAN. The Plan shall become effective as of
the date it is approved by the stockholders of Photogen
Technologies, Inc. (the "Effective Date"). The Plan shall
remain in effect, subject to the right of the Board of
Directors or the Committee to amend or terminate the Plan at
any time pursuant to Section 11 hereof, until all Shares
subject to it shall have been purchased or acquired according
to the Plan's provisions. However, in no event may an
Incentive Stock Option be granted under the Plan on or after
May 17, 2010.
2. DEFINITIONS.
Whenever used in the Plan, the following terms shall have the meanings set forth
below:
a. "AFFILIATE" means a "parent corporation" or "subsidiary
corporation" as defined in Section 424 of the Code.
b. "AWARD" means, individually or collectively, a grant under
this Plan of Incentive Stock Options, Nonqualified Stock
Options or Restricted Stock.
c. "AWARD AGREEMENT" means an agreement entered into by the
Company and each Participant setting forth the terms and
provisions applicable to Awards granted under this Plan.
d. "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act.
<PAGE>
e. "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.
f. "CAUSE" shall be determined by the Committee, exercising good
faith and reasonable judgment, and shall mean the occurrence
of any one or more of the following:
i. The willful and continued failure by the Participant
to substantially perform his duties (other than any
such failure resulting from the Participant's
Disability) after a written demand for substantial
performance is delivered by the Committee to the
Participant that identifies in reasonable detail the
manner in which the Committee believes that the
Participant has not substantially performed his
duties, and the Participant has failed to remedy the
situation within 30 calendar days of receiving such
notice; or
ii. The Participant's conviction for committing an act of
fraud, embezzlement, theft or another act
constituting a felony; or
iii. Any breach by a Participant of any written agreement
with the Company, including any agreement concerning
a Participant's employment, non-competition or
confidentiality of Company proprietary information;
or
iv. The willful engaging by the Participant in gross
misconduct materially and demonstrably injurious to
the Company, as determined by the Committee.
g. "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred as of the first day that any one or more of the
following conditions shall have been satisfied:
i. The acquisition by any Person of Beneficial Ownership
of 50% or more of either (i) the then outstanding
shares of Common Stock of the Company, or (ii) the
combined voting power of the outstanding voting
securities of the Company entitled to vote generally
in the election of Directors; provided, however, that
for purposes of this subsection, the following
transactions shall not constitute a Change of
Control: (A) any acquisition directly from the
Company through a public offering of shares of Common
Stock of the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the
Company, or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (C) below;
ii. The cessation, for any reason, of the individuals who
constitute the Company's Board of Directors as of the
date hereof ("Incumbent Board") to constitute at
least a majority of the Company's Board of Directors;
provided, however, that any individual becoming a
Director following the date hereof whose election, or
nomination for election by the Company's
stockholders, was approved by a vote of at least a
majority of the Directors then comprising the
Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but
excluding, for this purpose, any such individual
whose initial assumption of
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<PAGE>
office occurs because of an actual or threatened
election contest with respect to the election or
removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf
of a Person other than the Company's Board of
Directors;
iii. The consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company
("Business Combination") unless, following such
Business Combination, (i) all or substantially all of
the individuals and entities who were the Beneficial
Owners, respectively, of the outstanding shares of
Common Stock of the Company and the outstanding
voting securities of the Company immediately before
such Business Combination beneficially own, directly
or indirectly, more than 50% of, respectively, the
then outstanding shares of Common Stock and the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of Directors, as the case may be, of the Company
resulting from such Business Combination (including,
without limitation, a corporation which as a result
of such transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their ownership
immediately before such Business Combination of the
outstanding shares of Common Stock and the
outstanding voting securities of the Company, as the
case may be; (ii) no party (excluding any corporation
resulting from such Business Combination or any
employee benefit plan (or related trust) of the
Company or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, 50%; or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the
combined voting power of the then outstanding voting
securities of such corporation except to the extent
that such ownership existed before the Business
Combination; and (iii) at least a majority of the
members of the board of directors of the corporation
resulting from such Business Combination were members
of the Company's Board of Directors at the time of
the execution of the initial agreement, or of the
action of the Company's Board of Directors, providing
for such Business Combination; or
iv. The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
h. "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
i. "COMMITTEE" means the Compensation Committee of the Board, as
specified in Section 3 herein, or such other Committee
appointed by the Board to administer the Plan with respect to
grants of Awards.
j. "COMPANY" means Photogen Technologies, Inc., a Nevada
corporation, and also means any corporation of which a
majority of the voting capital stock is owned directly or
indirectly by Photogen Technologies Inc. or by any of its
Subsidiaries, and any other
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corporation designated by the Committee as being a Company
hereunder (but only during the period of such ownership or
designation).
k. "DIRECTOR" means any individual who is a member of the Board
of Directors of the Company.
l. "DISABILITY", as applied to a Participant, means that the
Participant (a) has established to the satisfaction of the
Committee that the Participant is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to last for a continuous period of not less than 12
months (all within the meaning of Section 22(e)(3) of the
Code), and (b) has satisfied any requirement imposed by the
Committee in regard to evidence of such disability.
m. "ELIGIBLE PERSON" shall mean all Employees, Directors or
consultants of the Company or any Affiliate; provided,
however, that no Award may be granted to anyone who is not an
"employee" as that term is defined in General Instruction
A.(1)(a) of Form S-8, as such definition may be amended from
time to time, without first receiving advice and guidance from
the Company's outside counsel as to the effect of such grant.
n. "EMPLOYEE" means any officer or employee of the Company.
o. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
p. "FAIR MARKET VALUE" Except as otherwise determined by the
Committee, the "Fair Market Value" of a share of Common Stock
as of any date shall be equal to the closing sale price of a
share of Common Stock as reported on The National Association
of Securities Dealers' New York Stock Exchange Composite
Reporting Tape (or if the Common Stock is not traded on The
New York Stock Exchange, the closing sale price on the
exchange on which it is traded or as reported by an applicable
automated quotation system, including the over-the-counter
bulletin board) (the "Composite Tape"), on the applicable date
or, if no sales of Common Stock are reported on such date, the
closing sale price of a share of Common Stock on the date the
Common Stock was last reported on the Composite Tape (or such
other exchange or automated quotation system, if applicable)
as of the date specified by the Committee (and if no date is
specified, then on the date of the meeting of the Committee at
which the award was granted).
q. "IMMEDIATE FAMILY MEMBERS" means the spouse, children and
grandchildren of a Participant.
r. "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase
Shares granted under Section 6 herein and which is designated
as an Incentive Stock Option and which is intended to meet the
requirements of Code Section 422.
s. "INSIDER" shall mean an individual who is, on the relevant
date, a Director, a 10% Beneficial Owner of any class of the
Company's equity securities that is registered
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pursuant to Section 12 of the Exchange Act or an officer of
the Company, as defined under Section 16 of the Exchange Act
and as determined by the Board of Directors from time to time.
t. "NONEMPLOYEE DIRECTOR" means an individual who is a member of
the Board of Directors of the Company but who is not an
Employee of the Company.
u. "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Shares granted under Section 6 herein and which is
not intended to meet the requirements of Code Section 422.
v. "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Section 6 herein.
w. "OPTION PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
x. "PARTICIPANT" means an Eligible Person who has outstanding an
Award granted under the Plan.
y. "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is limited in some way
(based on the passage of time, the achievement of performance
objectives, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the
Shares of Restricted Stock are subject to a substantial risk
of forfeiture, as provided in Section 7 herein.
z. "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d) thereof.
aa. "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Section 7 herein.
bb. "RETIREMENT" as applied to a Participant, means the
Participant's termination of employment in a manner which
qualifies the Participant to receive immediately payable
retirement benefits under any applicable retirement plan
maintained by the Company (the "Retirement Plan"), under the
successor or replacement of such Retirement Plan if it is then
no longer in effect, or under any other retirement plan
maintained or adopted by the Company which is determined by
the Committee to be the functional equivalent of such
Retirement Plan; or, with respect to a Participant who may not
or has not participated in a retirement plan or if there is no
such retirement plan maintained by the Company or an
Affiliate, "Retirement" shall have the meaning determined by
the Committee from time to time.
cc. "SHARES" means Common Stock of Photogen Technologies, Inc.,
par value $.001 per share.
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dd. "SUBSIDIARY" means any corporation, partnership, joint venture
or other entity in which the Company has a majority voting
interest.
3. ADMINISTRATION.
a. THE COMMITTEE. The Plan shall be administered by the
Committee, or by any other committee appointed by the Board,
which Committee shall consist solely of two or more
"Nonemployee Directors" within the meaning of Rule 16b-3 under
the Exchange Act, or any successor provision. The members of
the Committee shall be appointed from time to time by, and
shall serve at the discretion of, the Board of Directors.
b. AUTHORITY OF THE COMMITTEE. Except as limited by law and
subject to the provisions herein, the Committee shall have
full power in its discretion to select Eligible Persons who
shall participate in the Plan; determine the sizes and types
of Awards; determine the terms and conditions of Awards
(including vesting periods and restrictions); prescribe the
form of, construe and interpret any agreement or instrument
entered into under the Plan as they apply to Participants;
construe and interpret the terms and conditions of this Plan;
establish, amend, or waive rules and regulations for the
Plan's administration as they apply to Participants; alter,
amend, suspend or terminate the Plan in whole or in part; and
(subject to the provisions of Section 11 herein) amend the
terms and conditions of any outstanding Award to the extent
such terms and conditions are within the discretion of the
Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by
law, the Committee may delegate its authority as identified
herein.
c. DECISIONS BINDING. All determinations and decisions made by
the Committee pursuant to the provisions of the Plan and all
related orders and resolutions of the Board shall be final,
conclusive and binding on all persons, including the Company,
its stockholders, Employees, Participants and their estates
and beneficiaries.
d. COSTS OF PLAN. The costs and expenses incurred in the
operation and administration of the Plan shall be borne by the
Company.
e. INDEMNIFICATION. Each person who is or shall have been a
member of the Committee shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him
in connection with or resulting from any claim, action, suit,
or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him
in settlement thereof, to the fullest extent permitted by the
Nevada General Corporation Law. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under
the Company's Sections of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless. In addition, a member
of the Committee, in the performance of any act (or in
refraining from taking any action) in connection with the
Plan, shall not be liable to the Company, its stockholders,
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Employees, Participants or any person when relying in good
faith upon the records of the Company or upon such information
or statements presented to the Company by any of its officers,
employees or other persons as to matters the member reasonably
believes are within such other person's professional or expert
competence and who has been selected with reasonable care by
or on behalf of the Company.
4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS.
a. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment
as provided in Section 4.2 herein, the number of Shares hereby
reserved for issuance to Participants under the Plan shall be
2,000,000. Shares issued upon exercise of Options or Awards of
Restricted Stock under the Plan may be either authorized but
unissued Shares or Shares re-acquired by the Company. If, on
or prior to the termination of the Plan, an Award granted
thereunder expires or is terminated for any reason without
having been exercised or vested in full, the unpurchased or
unvested Shares covered thereby will again become available
for the grant of Awards under the Plan. Shares of Common Stock
covered by Options surrendered in connection with the exercise
of other Options shall not be deemed to have been exercised
and shall again become available for the grant of awards under
the Plan.
b. ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change
in corporate capitalization, such as a stock split, or a
corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of
stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such
term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in
the number and class of Shares which may be delivered under
Section 4.1, in the number and class of and/or price of Shares
subject to outstanding Awards granted under the Plan, and in
the Award limits set forth in Section 4.1, as may be
determined to be appropriate and equitable by the Committee,
in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject
to any Award shall always be a whole number.
5. ELIGIBILITY AND PARTICIPATION.
a. ELIGIBILITY. All Eligible Persons are eligible to participate
in this Plan.
b. ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may from time to time in its discretion select
Eligible Persons to whom Awards shall be granted and shall
determine the nature and amount of each Award.
c. PERFORMANCE-BASED AWARDS. The Committee may, in its
discretion, grant Awards that are wholly contingent on the
attainment of performance goals established by the Committee
from time to time. The performance goals may relate to one or
more of the following performance measures, as determined by
the Committee for each applicable performance period: (i)
return to stockholders, (ii) cash flow, (iii) return on
equity, (iv) Company created income (for example, income due
to Company initiated cost reductions or productivity
improvements), (v) sales growth, (vi) earnings and
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earnings growth, (vii) return on assets, (viii) stock price,
(ix) earnings per share, (x) market share, (xi) customer
satisfaction, and (xii) attaining regulatory approvals or
other regulatory benchmarks. Any such performance goals and
the applicable performance measures will be determined by the
Committee at the time of grant and reflected in an Award
Agreement. The number or value of performance-based stock
Awards that will be paid out to any Participant at the end of
the applicable performance period, which may be one year or
longer as determined by the Committee, will depend on the
extent to which the Company attains the established
performance goals. Awards intended to be performance-based
stock Awards shall be subject to such restrictions and
conditions as may be required under Section 162(m) to be
performance-based compensation thereunder.
6. STOCK OPTIONS.
a. GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number,
and upon such terms, and at any time and from time to time as
shall be determined by the Committee.
b. AWARD AGREEMENT. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the
duration of the Option, the number of Shares to which the
Option pertains, and such other provisions as the Committee
shall determine, which need not be uniform for all
Participants. The Award Agreement also shall specify whether
the Option is intended to be an ISO within the meaning of Code
Section 422, or an NQSO whose grant is intended not to fall
under the provisions of Code Section 422.
c. PROVISIONS FOR NQSOs. Each Stock Option intended to be a
Non-Qualified Stock Option shall be subject to the terms and
conditions which the Committee determines to be appropriate,
subject to the following minimum standards for any such
Non-Qualified Stock Option:
i. The option price (per share) of the Shares covered by
each Non-Qualified Stock Option shall be determined
by the Committee but shall not be less than the par
value per share of Common Stock.
ii. Each Award Agreement shall state the date or dates on
which it first is exercisable and the date after
which it may no longer be exercised, and may provide
that the Stock Option rights accrue or become
exercisable in installments over a period of months
or years, or upon the occurrence of certain
conditions or the attainment of stated goals or
events; and
iii. Exercise of any Stock Option may be conditioned upon
the Participant's execution of a Share purchase
agreement in form satisfactory to the Committee
providing, among other things, that:
(1) The Participant's or the Participant's
estate, heirs and representatives right to
sell the Shares may be restricted; and
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<PAGE>
(2) The Participant or the Participant's estate,
heirs and representatives may be required to
execute letters of investment intent and
must also acknowledge that the Shares will
bear legends noting any applicable
restrictions.
d. PROVISIONS FOR ISOs. Each Stock Option intended to be an
Incentive Stock Option shall be issued only to an Employee and
be subject to at least the following terms and conditions,
with such additional restrictions or changes as the Committee
determines are appropriate but not in conflict with Code
Section 422 and relevant regulations and rulings of the
Internal Revenue Service:
i. The Incentive Stock Option shall meet the minimum
standards required of Non-Qualified Stock Options, as
described in Section 6.3 except clause (a)
thereunder.
ii. Immediately before the Incentive Stock Option is
granted, if the Participant owns, directly or by
reason of the applicable attribution rules in Code
Section 424(d):
(1) Ten percent (10%) or less of the total
combined voting power of all classes of
share capital of the Company or an
Affiliate, the option price per share of the
Shares covered by each Incentive Stock
Option shall not be less than one hundred
percent (100%) of the Fair Market Value per
share of the Shares on the date of the grant
of the Incentive Stock Option.
(2) More than ten percent (10%) of the total
combined voting power of all classes of
share capital of the Company or an
Affiliate, the option price per share of the
Shares covered by each Incentive Stock
Option shall not be less than one hundred
ten percent (110%) of the said Fair Market
Value on the date of grant.
iii. For Participants who own:
(1) Ten percent (10%) or less of the total
combined voting power of all classes of
share capital of the Company or an
Affiliate, each Incentive Stock Option shall
terminate not more than ten (10) years from
the date of the grant or at such earlier
time as the Award Agreement may provide;
(2) More than ten percent (10%) of the total
combined voting power of all classes of
share capital of the Company or an
Affiliate, each Incentive Stock Option shall
terminate not more than five (5) years from
the date of the grant or at such earlier
time as the Award Agreement may provide.
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<PAGE>
iv. The Award Agreements shall restrict the amount of
Options which may be exercisable in any calendar year
(under this or any other Incentive Stock Option plan
of the Company or an Affiliate) so that the aggregate
Fair Market Value (determined at the time each
Incentive Stock Option is granted) of the stock with
respect to which Incentive Stock Options are
exercisable for the first time by the Participant in
any calendar year does not exceed one hundred
thousand dollars ($100,000), provided that this
subparagraph shall have no force or effect if its
inclusion in the Plan is not necessary for Options
issued as Incentive Stock Options to qualify as
Incentive Stock Options pursuant to Section 422(d) of
the Code.
v. No Incentive Stock Options shall be granted after the
date which is the earlier of ten (10) years from the
date of the adoption of the Plan by the Company and
the date of the approval of this Plan by the
shareholders of the Company.
vi. Each Participant who receives an Incentive Stock
Option must agree to notify the Company in writing
immediately after the Participant makes a
Disqualifying Disposition of any shares acquired
pursuant to the exercise of an Incentive Stock
Option. A Disqualifying Disposition is any
disposition (including any sale) of such shares
before the later of (i) two years after the date the
Participant was granted the Incentive Stock Option,
or (ii) one year after the date the Participant
acquired shares by exercising the Incentive Stock
Option. If the Participant has died before such stock
is sold, these holding period requirements do not
apply and no Disqualifying Disposition can occur
thereafter.
e. PAYMENT. Options granted under this Section 6 shall be
exercised in accordance with the applicable Award Agreement by
the delivery of a proper notice of exercise to the Company,
setting forth the number of Shares with respect to which the
Option is to be exercised. No shares of Common Stock shall be
issued on the exercise of an Option unless the Option Price is
paid for in full at the time of exercise. Payment shall be
made in cash, which may be paid by check or other instrument
acceptable to the Committee. In addition, subject to
compliance with applicable laws and regulations and such
conditions as the Committee may impose, the Option holder may
deliver with his exercise notice irrevocable instructions to a
broker to promptly deliver to the Company an amount of sale or
loan proceeds sufficient to pay the exercise price. As soon as
practicable after receipt of proper notification of exercise
and full payment, the Company shall deliver to the
Participant, in the Participant's name, Share certificates in
an appropriate amount based upon the number of Shares
purchased under the Option(s).
f. RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may
impose such restrictions on any Shares acquired pursuant to
the exercise of an Option granted under this Section 6 as it
may deem advisable, including, without limitation,
restrictions under applicable federal securities laws, under
the requirements of any stock exchange or market upon which
such Shares are then listed and/or traded, and under any state
securities laws applicable to such Shares.
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<PAGE>
g. TERMINATION OF EMPLOYMENT. Each Option, to the extent it has
not been previously exercised, shall terminate upon the
earliest to occur of: (a) the expiration of the Option period
set forth in the Award Agreement; (b) for ISOs, the expiration
of three months following the Participant's Retirement
(following the Participant's Retirement, NQSOs shall terminate
upon the expiration of the Option period set forth in the
Option Award Agreement); (c) the expiration of 12 months
following the Participant's death or Disability; (d)
immediately upon termination for Cause; (e) the expiration of
90 days following the Participant's termination of employment
for any reason other than Cause, Change in Control, death,
Disability, or Retirement; or (f) at such other time or times
and on such conditions provided for in the Award Agreement.
Upon a termination of employment related to a Change in
Control, Options shall be treated in the manner set forth in
Section 10.
h. NONTRANSFERABILITY OF OPTIONS.
i. INCENTIVE STOCK OPTIONS. No ISO granted under the
Plan may be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution.
Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime
only by such Participant.
ii. NONQUALIFIED STOCK OPTIONS. The Committee may, in its
discretion, authorize all or a portion of NQSOs
granted to a Participant to be on terms which permit
transfer by such Participant to (i) Immediate Family
Members, (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members
are the only partners, provided that (A) there may be
no consideration for any such transfer, (B) the Award
Agreement pursuant to which such Options are granted
must be approved by the Committee, and must expressly
provide for transferability in a manner consistent
with this Section, and (C) subsequent transfers of
transferred Options shall be prohibited except those
by will or the laws of descent and distribution.
Following transfer, any such Options shall continue
to be subject to the same terms and conditions as
were applicable immediately prior to transfer,
provided that for purposes of this Plan, the term
"Participant" shall be deemed to refer to the
transferee. The events of termination of employment
shall continue to be applied with respect to the
original Participant, following which the Options
shall be exercisable by the transferee only to the
extent, and for the periods specified in this Section
6.8. Notwithstanding the foregoing, should the
Committee provide that Options granted be
transferable, the Company by such action incurs no
obligation to notify or otherwise provide notice to a
transferee of early termination of the Option. In the
event of a transfer, as set forth above, the original
Participant is and will remain subject to and
responsible for any applicable withholding taxes upon
the exercise of such Options.
7. RESTRICTED STOCK.
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a. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time,
may grant Shares of Restricted Stock to Participants in such
amounts as the Committee shall determine. Without limiting the
generality of the foregoing, Restricted Shares may be granted
in connection with payouts under other compensation programs
of the Company.
b. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by a Restricted Stock Award Agreement that shall
specify the Period(s) of Restriction, the number of Shares of
Restricted Stock granted, and such other provisions as the
Committee shall determine.
c. TRANSFERABILITY. Except as provided in this Section 7, the
Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned or otherwise alienated or
hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction
of any other conditions, as specified by the Committee in its
sole discretion and set forth in the Restricted Stock Award
Agreement. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.
d. OTHER RESTRICTIONS. Subject to the Plan, the Committee shall
impose such other conditions and/or restrictions on any Shares
of Restricted Stock granted pursuant to the Plan as it may
deem advisable including, without limitation, a requirement
that Participants pay a stipulated purchase price for each
Share of Restricted Stock, restrictions based upon the
achievement of specific performance objectives, time-based
restrictions on vesting following the attainment of the
performance objectives, and/or restrictions under applicable
federal or state securities laws. At the discretion of the
Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Section 7, Shares of
Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the
Participant after the last day of the applicable Period of
Restriction, subject to applicable securities laws.
e. VOTING RIGHTS. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may
exercise full voting rights with respect to those Shares.
f. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock
granted hereunder may be credited with regular cash dividends
paid with respect to the underlying Shares while they are so
held. Such dividends may be paid currently, accrued as
contingent cash obligations, or converted into additional
shares of Restricted Stock, upon such terms as the Committee
establishes. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. In the event
that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange
Act, such
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dividend shall be subject to a vesting period equal to the
remaining vesting period of the Shares of Restricted Stock
with respect to which the dividend is paid.
g. TERMINATION OF EMPLOYMENT. Upon a Participant's death,
Disability, or Retirement, all Restricted Shares shall vest
immediately. Each Restricted Stock Award Agreement shall set
forth the extent to which the Participant shall have the right
to retain unvested Restricted Shares following termination of
the Participant's employment with the Company in all other
circumstances. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be
uniform among all Shares of Restricted Stock issued pursuant
to the Plan, and may reflect distinctions based on the reasons
for termination of employment.
8. BENEFICIARY DESIGNATION.
A Participant under the Plan may make written designation of a
beneficiary on forms prescribed by and filed with the Secretary of the Company.
Such beneficiary, or if no such designation of any beneficiary has been made,
the legal representative of such Participant or such other person entitled
thereto as determined by a court of competent jurisdiction, may exercise, in
accordance with and subject to the provisions of Section 6, any unterminated and
unexpired Option granted to such Participant to the same extent that the
Participant himself could have exercised such Option were he alive or able;
provided, however, that no Option granted under the Plan shall be exercisable
for more Shares than the Participant could have purchased thereunder on the date
his employment by, or other relationship with, the Company and its Subsidiaries
was terminated.
9. RIGHTS OF ELIGIBLE PERSONS AND PARTICIPANTS.
Nothing in this Plan or any Award Agreement shall be deemed to: prevent
the Company or an Affiliate from terminating the employment, consultancy or
director status of a Participant; prevent a Participant from terminating his or
her own employment, consultancy or director status; give any Participant a right
to be retained in employment or other service by the Company or any Affiliate
for any period of time; confer on any person any right to be selected as a
Participant.
10. CHANGE IN CONTROL.
a. TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a
Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any
governing governmental agencies or national securities
exchanges:
i. Any and all Options granted hereunder shall become
immediately exercisable, and shall remain exercisable
throughout their entire term; and
ii. Any restriction periods and restrictions imposed on
Shares of Restricted Stock shall lapse; provided,
however, that the degree of vesting associated with
Restricted Stock which has been conditioned upon the
achievement of
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performance conditions pursuant to Section 5.3 herein
shall be determined in the manner set forth in
Section 7.4 herein.
b. TERMINATION, AMENDMENT, AND MODIFICATIONS OF
CHANGE-IN-CONTROL PROVISIONS. Notwithstanding any other
provision of this Plan or any Award Agreement provision, the
provisions of this Section 10 may not be terminated, amended,
or modified on or after the date of a Change in Control to
affect adversely any Award theretofore granted under the Plan
without the prior written consent of the Participant with
respect to said Participant's outstanding Awards.
11. AMENDMENT, MODIFICATION, AND TERMINATION.
a. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to Section
10.2 herein, the Board or the Committee may at any time and
from time to time, alter, amend, suspend or terminate the Plan
in whole or in part, except that, without approval of the
stockholders of the Company, no such revision or amendment
shall increase the number of shares available for grants of
ISOs under the Plan or alter the class of participants in the
Plan. Notwithstanding the foregoing, neither the Company nor
the Board or Committee on its behalf may cancel outstanding
Awards and issue substitute Awards in replacement thereof or
reduce the exercise price of any outstanding Options without
stockholder approval.
b. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the
terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4.2
hereof) affecting the Company or the financial statements of
the Company or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended
to be made available under the Plan.
c. AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any
material way any Award previously granted under the Plan,
without the written consent of the Participant holding such
Award.
12. WITHHOLDING.
a. TAX WITHHOLDING. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal,
state, and local taxes, domestic or foreign, required by law
or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
b. SHARE WITHHOLDING. To the extent provided by the Committee, a
Participant may elect to have any distribution to be made
under this Plan to be withheld or to surrender to the Company
shares of Common Stock already owned by the Participant to
fulfill any tax withholding obligation.
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13. SUCCESSORS.
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation or otherwise.
14. LEGAL CONSTRUCTION.
a. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the
feminine; the plural shall include the singular; and, the
singular shall include the plural.
b. SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan,
and the illegal or invalid provision shall be modified to the
extent necessary to be legal and valid and shall be enforced
as modified.
c. REQUIREMENTS OF LAW. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may
be required.
d. SECURITIES LAW COMPLIANCE. With respect to Insiders,
transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under
the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed
advisable by the Committee.
e. GOVERNING LAW. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the state of
Nevada.
15. RIGHTS AS A SHAREHOLDER.
No Participant to whom an Award has been granted shall have rights as a
shareholder with respect to any Shares covered by such Award, except after due
exercise of the Award and tender of the full purchase price for any Shares being
purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant. Nothing in this Plan
shall affect a Participant's employment or other engagement by the Company,
including the Company's right to terminate such employment or engagement.
16. PURCHASE FOR INVESTMENT.
a. Unless the offering and sale of the Shares to be issued upon
the particular exercise of an Option shall have been
effectively registered under the Securities Act of 1933 (the
"1933
-15-
<PAGE>
Act"), the Company shall be under no obligation to issue the
Shares covered by such exercise unless and until the person(s)
who exercise such Option shall represent and warrant to the
Company, prior to the receipt of such Shares, that such
person(s) are acquiring such Shares for their own respective
accounts, for investment, and not with a view to, or for sale
in connection with, the distribution of any such Shares. The
person(s) acquiring such Shares shall be bound by the
provisions of the following legend which shall be endorsed
upon the certificate(s) evidencing their Shares issued
pursuant to such exercise or such grant:
The shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under state securities laws to the extent applicable. The
shares may not be sold, offered for sale, or otherwise
transferred in the absence of an effective registration
statement under said Act (and any registration or
qualification as may be required under such state laws) or an
opinion of counsel satisfactory to the company and its counsel
that such registration or qualification is not required.
b. The Company may delay issuance of the Shares until completion
of any action or obtaining of any consent which the Company
deems necessary under any applicable law (including, without
limitation, state securities or "blue sky" laws).
-16-
<PAGE>
PHOTOGEN TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2000
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Timothy Scott, Ph.D. and Robert
Weinstein, M.D., or either one of them acting singly in the absence of the
other, with full power of substitution, the proxy and proxies of the
undersigned to vote the shares of Common Stock, par value $.001 per share, of
Photogen Technologies, Inc. ("Photogen"), which the undersigned could vote,
and with all power the undersigned would possess, if personally present at
the Annual Meeting of Stockholders of Photogen to be held at the Ritz Carlton
Hotel, 160 East Pearson Street, Chicago, Illinois, on Wednesday, May 17, 2000
at 10:00 a.m., Chicago Time, and any adjournment thereof, all as set forth in
the accompanying Proxy Statement:
(Continued and to be dated and signed on other side)
<PAGE>
PHOTOGEN TECHNOLOGIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
FOR All
FOR WITHHELD Except
All All as noted
1. Election of Directors. / / / / / /
INSTRUCTION: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST BELOW.
Eric A. Wachter, Ph.D. Theodore Tannebaum
Robert J. Weinstein, M.D. Eugene Golub
Lester H. McKeever, Jr. Vincent L. Fabiano
2. Approval of an amendment to Article FOR AGAINST ABSTAIN
Fifth of the Company's Articles of / / / / / /
Incorporation increasing the size of
the Board of Directors from six to
seven directors and providing that all
vacancies of the Board of Directors
shall be filled in the manner
provided in the Company's Bylaws.
3. Approval of the 2000 Long Term FOR AGAINST ABSTAIN
Incentive Compensation Plan / / / / / /
4. Ratification of BDO Seidman, LLP as FOR AGAINST ABSTAIN
the Company's independent public / / / / / /
accountants for 2000.
5. In their discretion, to act upon any matters incidental to the foregoing
and such other business as may properly come before the Annual Meeting, or
any adjournment thereof.
This Proxy when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ITEMS 1, 2, 3 AND 4 ABOVE AND IN THE DISCRETION OF THE
APPOINTED PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING. Any holder who wishes to withhold the discretionary authority
referred to in Item 5 above should mark a line through the entire Item.
The signer hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any adjournments thereof.
Dated_________________________________, 2000
____________________________________________
Signature(s)
____________________________________________
Signature(s)
(Please sign exactly and as fully as your name appears on your stock
certificate. If shares are held jointly, each stockholder must sign.
When signing as an attorney, executor, administrator, trustee
or guardian, please give full title as such.)
- FOLD AND DETACH HERE -
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY, USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
