SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 2000.
Commission File Number 0-15313
BIO-TECHNOLOGY GENERAL CORP.
(Exact name of Registrant as specified in its charter)
Delaware 13-3033811
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
70 Wood Avenue South, Iselin, New Jersey 08830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 632-8800
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of each class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
---- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
Aggregate market value of the Registrant's Common Stock held by non-affiliates
at March 16, 2001 (based on the closing sale price for such shares as reported
by the National Association of Securities Dealers Automated Quotation System):
$348,955,153. Common Stock outstanding as of March 16, 2001: 54,824,876 shares.
DOCUMENTS INCORPORATED BY REFERENCE: None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
Our directors, their ages, the year in which each first became a
director and their principal occupations or employment during the past five
years are:
YEAR FIRST PRINCIPAL OCCUPATION DURING
DIRECTOR AGE BECAME DIRECTOR THE PAST FIVE YEARS
- -------- --- --------------- --------------------
Herbert Conrad 68 1993 Retired; President of Roche
Pharmaceuticals Division, Hoffmann-
La Roche from December 1981 until
September 1993. (1)(2)
Sim Fass 59 1983 Chairman of the Board since March
1997; CEO of BTG since May 1984;
Treasurer of BTG since August 1983;
President of Bio-Technology General
(Israel) Ltd., BTG's wholly-owned
subsidiary ("BTG Israel"), since
November 1999; President of BTG and
BTG Israel from May 1984 to May
1999; Chief Operating Officer of BTG
Israel between August 1983 and May
1987. (1)(3)
Carl Kaplan 62 1998 Senior Partner, Fulbright & Jaworski
L.L.P.; from January 1969 to January
1, 1989, a partner of Reavis &
McGrath, which merged with
Fulbright & Jaworski effective
January 1, 1989. (1)(4)(5)
Allan Rosenfield 68 1997 Dean and DeLamar Professor, Mailman
School of Public Health, Columbia
University, since 1986. (2)
David Tendler 63 1994 Partner, Tendler Beretz L.L.C. since
January 1985; Chairman of V.I.
Technologies, Inc. (previously
Melville BioLogics Inc.) since
February 1995; Co-Chairman and
Chief Executive Officer of Phibro-
Salomon, Inc. from May 1982 until
October 1984. (1)(2)(5)
Virgil Thompson 61 1994 President, Chief Executive Officer and
Director of Chimeric Therapies, Inc.
since September 2000; President and
Chief Operating Officer of BTG from
May 1999 through August 2000;
President and Chief Executive Officer
of Cytel Corporation from January
1996 to May 1999; President and
Chief Executive Officer of CIBUS
Pharmaceutical, Inc. from July 1994
until January 1996.(1)
Dan Tolkowsky 79 1985 Venture capital investor; Partner, Adler
& Tolkowsky Management
Associates, the general partner of
Athena Venture Partners L.P., a
venture capital partnership, from May
1985 to September 1997; prior
thereto, Vice Chairman and
Managing Director of Discount
Investment Corporation (Tel-Aviv);
Chairman of the Executive
Committee of BTG Israel from 1983
through October 1989. (5)
Faye Wattleton 57 1997 President, Center for Gender Equality
since 1995; President of Planned
Parenthood Federation of America,
Inc. (New York) from 1978 to 1992. (1)
Herbert Weissbach 69 1997 Distinguished Research Professor,
Director, Center for Molecular
Biology and Biotechnology, Florida
Atlantic University, since January
1997; prior thereto, Vice President,
Hoffmann-LaRoche Inc. from 1983 to
1996; Director, Roche Institute of
Molecular Biology from 1983 to
1996. (2)
(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Pursuant to Dr. Fass' employment agreement with BTG, BTG has agreed to
nominate Dr. Fass for election as a director during all periods when
Dr. Fass serves as our President and/or Chief Executive Officer. See
"Item 11. Executive Compensation--Employment Agreements."
(4) Fulbright & Jaworski L.L.P. has rendered legal services to BTG in 2000
and 2001.
(5) Member of the Compensation and Stock Option Committee of the Board of
Directors.
Mr. Conrad is a director of Genvec Inc., Sicor Inc. and Urocor Inc. Mr.
Tendler is a director of V.I. Technologies, Inc. Mr. Thompson is a director of
Questcor Pharmaceuticals, Inc. and Aradigm Corporation. Ms. Wattleton is a
director of Estee Lauder Companies and Quidel Corporation.
During the fiscal year ended December 31, 2000, the Board of Directors
held nine meetings. Each director attended at least 75% of the meetings of the
Board of Directors held when he or she was a director and of all committees of
the Board of Directors on which he or she served.
On December 6, 1994, the Board reestablished the Executive Committee to
exercise, to the extent authorized by law, all of the powers and authority of
the Board in the management of the business and affairs of BTG. Messrs. Virgil
Thompson (Chairman), Herbert Conrad, Sim Fass, Carl Kaplan and David Tendler and
Ms. Faye Wattleton are the current members of the Executive Committee. During
the fiscal year ended December 31, 2000, the Executive Committee did not meet.
In November 1989, the Board formed an Audit Committee which was
established to review the internal accounting procedures of BTG and to consult
with and review BTG's independent auditors and the services provided by such
auditors. Messrs. Herbert Conrad, Allan Rosenfield, David Tendler (Chairman) and
Herbert Weissbach are the current members of the Audit Committee. During the
fiscal year ended December 31, 2000, the Audit Committee held six meetings.
In January 1990, the Board formed a Compensation Committee. In May 1990,
the Board combined the Compensation Committee and the Stock Option Plan
Committee to form the Compensation and Stock Option Committee to review
compensation practices, to recommend compensation for executives and key
employees, and to administer BTG's stock option plans. Messrs. Carl Kaplan,
David Tendler and Dan Tolkowsky (Chairman) are the current members of the
Compensation and Stock Option Committee. During the fiscal year ended December
31, 2000, the Compensation and Stock Option Committee held one meeting.
COMPENSATION OF DIRECTORS
Our non-employee directors are paid $10,000 annually in shares of our
common stock pursuant to our Stock Compensation Plan for Outside Directors,
which is described below, and $15,000 per annum in cash. These payments are
made quarterly. In addition, non-employee members of the Executive Committee
are paid $5,000 per annum in cash, payable quarterly, and non-employee
members of the Audit Committee and the Compensation and Stock Option
Committee receive $1,000 for each committee meeting attended if not held on
the same day as a meeting of the Board of Directors. All directors are
reimbursed for their expenses in connection with attending meetings of the
Board. In addition, we pay each director who attends BTG's
research and development meetings a fee of $1,500 per day. Upon becoming a
director of BTG, non-employee directors also receive a one time grant of options
to purchase 20,000 shares of our common stock pursuant to BTG's 1992 Stock
Option Plan for Outside Directors. In addition, each non-employee director
receives an option to purchase 7,500 shares of common stock each year upon
re-election as a director pursuant to our Stock Option Plan for Non-Employee
Directors.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS. Pursuant to our 1997
Stock Option Plan for Non-Employee Directors (the "1997 Directors Option
Plan"), each non-employee director receives an option to purchase 7,500
shares of common stock each year upon re-election as a director. The option
exercise price per share of common stock is the Fair Market Value (as defined
in the 1997 Directors Option Plan) of the common stock on the date that the
option is granted. Options granted under the 1997 Directors Option Plan have
a term of ten years from the date the option is granted, subject to earlier
termination upon such person ceasing to be a director. A total of 500,000
shares of common stock have been reserved for issuance under the 1997
Directors Option Plan.
In general, options become exercisable in four equal installments on
the six month and first, second and third anniversaries of the date of grant.
In the event a director ceases to be a director of BTG for any reason, such
person may exercise the option, to the extent exercisable at the time he or
she ceases to be a director of BTG, within six months after the date he or
she ceases to be a director of BTG (one year if he or she ceases to be a
director of BTG by reason of death). Options may not be transferred during
the lifetime of an optionee. The 1997 Directors Option Plan provides that the
options will become immediately exercisable in full upon a "Change in
Control" (as defined in the 1997 Directors Option Plan) of BTG.
Pursuant to the 1997 Directors Option Plan, on September 6, 2000,
Messrs. Conrad, Kaplan, Rosenfield, Tendler, Thompson, Tolkowsky and
Weissbach and Ms. Wattleton, who were re-elected directors of BTG at the 2000
Annual Meeting of Stockholders, each received an option to purchase 7,500
shares of our common stock at a per share exercise price of $11.8125. Upon
the re-election of Messrs. Conrad, Kaplan, Rosenfield, Tendler, Thompson,
Tolkowsky and Weissbach and Ms. Wattleton as directors of BTG at the 2001
Annual Meeting of Stockholders, each of them will receive an option to
purchase 7,500 shares of our common stock at a per share exercise price equal
to Fair Market Value on the date of the annual meeting.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS. Pursuant to our 1992 Stock
Option Plan for Outside Directors (the "1992 Directors Plan"), each person
who is neither an officer nor employee of BTG or its subsidiaries and who is
elected or appointed a director of BTG (the "New Director") automatically
receives on the date of his or her initial election or appointment to BTG's
Board (the "Grant Date") an option to purchase 20,000 shares of our common
stock (the "Option") at a per share exercise price equal to the Fair Market
Value (as defined in the 1992 Directors Plan) of our common stock on the
Grant Date.
Options issued under the 1992 Directors Plan may be exercised as to
5,000 shares on the date which is six months and one day after the Grant Date
and an additional 5,000 shares on each of the three successive anniversaries
of the Grant Date. In the event that a New Director ceases to be a director
of BTG, such person may exercise any portion of the Option that is
exercisable by him or her at the time he or she ceases to be a director of
BTG, but only to the extent such Option is exercisable as of such date,
within six months after the date he or she ceases to be a director of BTG.
However, in the event a "Change of Control of the Corporation" (as defined in
the 1992 Directors Plan) occurs, all options granted under the 1992 Directors
Plan which are outstanding at the time a Change of Control of the Corporation
occurs will immediately become exercisable. Options granted under the 1992
Directors Plan have a term of ten years from the Grant Date and are not
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
Mr. Herbert J. Conrad, who was elected a director of BTG on October
14, 1993, was automatically granted an Option at a per share price of
$5.8125. Mr. David Tendler and Mr. Virgil Thompson, who were elected as
directors of BTG on June 2, 1994, were each automatically granted an Option
at a per share exercise price of $2.9375. Ms. Faye Wattleton and Messrs.
Allan Rosenfield and Herbert Weissbach, who were elected directors of BTG on
June 18, 1997, were each automatically granted an Option at a per share
exercise price of $13.9375. Mr. Carl E. Kaplan, who was elected a director of
BTG on June 17, 1998, was automatically granted an Option at a per share
price of $7.91.
STOCK COMPENSATION PLAN FOR OUTSIDE DIRECTORS. Pursuant to BTG's
Compensation Plan for Outside Directors (the "Compensation Plan"), each
director of BTG who is neither an officer nor employee of BTG or its
subsidiaries (an "Outside Director") is awarded automatically, in lieu of
cash compensation for services as a director, on the last business day of
each full fiscal quarter subsequent to his election or appointment as an
Outside Director, such number of shares of our common stock as has an
aggregate Fair Market Value (as defined in the Compensation Plan) equal to
$2,500, based on the price of our common stock on the date of issue (the
"Shares"). The Compensation Plan provides that each Outside Director will be
awarded Shares until such time as he is no longer an Outside Director. If an
Outside Director ceases to be an Outside Director for any reason, the number
of Shares which he will be awarded on the last business day of our next
fiscal quarter will be equal to one-third of the number of Shares which he
would have been awarded on such date for each complete month that he was an
Outside Director in the fiscal quarter in which he ceased to be an Outside
Director.
The Compensation Plan allows any Outside Director to defer the
issuance and delivery of our common stock awarded under the Compensation Plan
until the termination of his services on BTG's Board or such other time as
the Board may determine. BTG entered into a deferral agreement with Virgil
Thompson in June 1994 and Herbert Weissbach in June 1997 (the "Deferral
Agreements") pursuant to which the issuance and delivery of our common stock
to be awarded to each of Mr. Thompson and Mr. Weissbach under the
Compensation Plan has
been deferred until after the date he ceases to be a member of the Board;
provided, however, that any shares of our common stock, the issuance of which
was deferred, will be issued to Mr. Thompson and Mr. Weissbach at the time of a
change in ownership or effective control of BTG or a change in ownership of a
substantial portion of BTG's assets, as defined in the Code, except that in
determining whether there is a change in effective control by reason of a stock
acquisition, there must be an acquisition of stock possessing at least 40% (as
opposed to the 20% requirement set forth in the Code) of the total voting power
of our common stock. Mr. Thompson elected not to defer receipt of shares
pursuant to the Compensation Plan effective January 1, 2001 and Mr. Thompson now
receives Shares under the Compensation Plan on the last business day of each
fiscal quarter.
During the 2000 fiscal year, each Outside Director eligible to
receive shares under the Compensation Plan received 161 shares of BTG common
stock on March 31, 2000, 189 shares of BTG common stock on June 30, 2000, 218
shares of BTG common stock on September 30, 2000 and 353 shares of BTG common
stock on December 31, 2000. On March 31, 2000, June 30, 2000, September 30,
2000 and December 31, 2000, the Fair Market Value of our common stock was
$15.50, $13.1875, $11.4375 and $7.0625, respectively. Each of Messrs. Herbert
Conrad, Carl Kaplan, Allan Rosenfield, David Tendler and Dan Tolkowsky and
Ms. Faye Wattleton received an aggregate of 921 shares of our common stock
under the Compensation Plan for their services as director during the 2000
fiscal year. On March 31, 2001, respectively, each of Ms. Wattleton and
Messrs. Conrad, Kaplan, Rosenfield, Tendler, Thompson and Tolkowsky received
400 shares of BTG common stock under the Compensation Plan. On that date, the
Fair Market Value of BTG common stock was $6.24.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our executive officers and directors, as well as
persons who beneficially own more than ten percent of BTG common stock, to file
initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (the "SEC"). Executive officers, directors
and greater than ten percent beneficial owners are required by the SEC to
furnish us with copies of all Section 16(a) forms they file.
Based upon a review of the copies of such forms furnished to BTG and
written representations from our executive officers and directors, we believe
that during fiscal 2000 all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent beneficial owners
were complied with, except each of Marian Gorecki (who served as an executive
officer until August 1, 2000), Yehuda Sternlicht and Dov Kanner failed to file
one Form 4 on a timely basis.
EXECUTIVE OFFICERS
See "Item 1. Business-Executive Officers of the Company."
ITEM 11. EXECUTIVE COMPENSATION
The following table shows all the cash compensation paid or to be paid
by BTG or its subsidiaries as well as certain other compensation paid or accrued
during the fiscal years indicated to (i) the Chief Executive Officer of BTG,
(ii) each of the four other most highly compensated executive officers of BTG
who were serving at the end of 2000, and (iii) Mr. Thompson, who would have been
included but for the fact that he was not serving as an executive officer at the
end of 2000 (collectively the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
FISCAL --------------------------- ---------- ALL OTHER
YEAR SALARY($)(2) BONUS($)(3) OPTIONS(#) COMPENSATION(4)
------- ------------- ----------- ---------- ---------------
NAME AND PRINCIPAL POSITION(1)
Sim Fass............................... 2000 $395,000 $155,000 150,000 $ 5,250
Chairman of the Board 1999 372,500 150,000 150,000 5,000
and Chief Executive Officer 1998 347,500 125,000 200,000 5,000
Virgil Thompson........................ 2000 224,852 110,000 125,000(6) 3,500
President and Chief Operating 1999 212,308 - 200,000 3,125
Officer (5) 1998 - - - -
Norman Barton.......................... 2000 221,500 65,000 50,000 5,250
Senior Vice President - 1999 206,250 60,000 79,500 5,000
Chief Medical Officer 1998 193,150 50,000 85,000 5,000
Dov Kanner............................. 2000 203,225 65,000 190,000 51,848(8)
Senior Vice President and General 1999 104,000 37,500 40,405 17,633(8)
Manager of BTG Israel (7) 1998 106,000 32,500 30,000 17,717(8)
Ernest Kelly........................... 2000 216,499 62,500 35,000 5,250
Senior Vice President - 1999 205,250 60,000 59,800 5,000
Quality Assurance, Quality 1998 192,504 50,000 40,000 5,000
Control and Regulatory Affairs
Robert Shaw............................ 2000 220,500 70,000 75,000 5,250
Senior Vice President- General 1999 201,250 50,000 70,000 5,000
Counsel and Secretary 1998 131,250 - 65,000 1,100
(1) Each of the Named Executive Officers who is currently an executive
officer is a party to an employment or severance agreement with BTG. See
"--Employment Agreements."
(2) Effective July 1, 2000, the salary of each of Messrs. Fass, Thompson,
Barton, Kelly and Shaw was increased to $405,000, $335,000, $225,500,
$220,500 and $231,000, respectively, from $385,000, $320,000, $217,500,
$212,5000 and $210,000, respectively. The salary of Mr. Kanner was
increased from $106,000 to $180,000 on February 1, 2000 when he became
Senior Vice President of BTG and the General Manager of BTG-Israel and
to $235,000 effective July 1, 2000. Mr. Shaw's salary was increased to
$275,000 effective January 1, 2001.
(3) Bonuses paid during a fiscal year are for the prior fiscal year.
(4) Pursuant to the SEC's rules on executive compensation disclosure, "All
Other Compensation" does not
include perquisites because the aggregate amount of such compensation
for each of the persons listed did not exceed the lesser of (i) $50,000
or (ii) 10 percent of the combined salary and bonus for such person in
each such year. Amount included represents BTG's matching contribution
pursuant to its 401(k) defined contribution plan for all U.S.-based
employees and contributions to a professional study fund and managers'
insurance, which includes severance pay and retirement pension, for
Israeli-based employees.
(5) Mr. Thompson joined BTG as President and Chief Operating Officer
effective May 3, 1999 and resigned as an executive officer effective
August 31, 2000. Mr. Thompson remains a director of BTG. Does not
include compensation received by Mr. Thompson as a director of BTG
following his termination of employment. See "Item 10. Directors and
Executive Officers of the Registrant--Directors--Compensation of
Directors."
(6) These options expired when Mr. Thompson resigned as an executive officer
effective August 1, 2000.
(7) Mr. Kanner became Senior Vice President and the General Manager of
BTG-Israel on February 1, 2000.
(8) Consists of BTG-Israel contributions to a professional study fund in an
amount equal to 7.5% of salary and to managers' insurance, which
includes severance pay and retirement pension equal to 13.33% of salary.
Mr. Kanner contributes 2.5% and 5%, respectively, of his salary to these
funds. In 2000, also includes a "gross up" tax payment of $7,725 with
respect to a company car provided to Mr. Kanner.
OPTION GRANTS FOR 2000
The following table sets forth information with respect to
option grants in 2000 to the Named Executive Officers.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OR OPTION TERM (3)
OPTIONS FISCAL YEAR BASE PRICE EXPIRATION ---------------
NAME GRANTED(#)(1) (2) ($/SH) DATE 5% ($) 10% ($)
- ---- ------------- ----- -------- ----- ------- --------
Sim Fass................ 150,000 10.0% $10.25 7/31/10 $967,500 $2,451,000
Virgil Thompson(4)...... 125,000 8.3 10.25 7/31/10 806,250 2,042,500
Norman Barton........... 50,000 3.3 10.25 7/31/10 322,500 817,000
Dov Kanner.............. 100,000 6.6 15.063 1/23/10 947,700 2,400,700
90,000 6.0 10.25 7/31/10 580,500 1,470,600
Ernest Kelly............ 35,000 2.3 10.25 7/31/10 225,750 571,900
Robert Shaw............. 75,000 5.0 10.25 7/31/10 483,750 1,225,500
- ---------------
(1) Options generally vest in four equal annual installments commencing on
the first anniversary date of the grant; however, options granted under
BTG's 1992 Stock Option Plan and certain other options become
immediately exercisable upon a change in control of BTG.
(2) Based upon options to purchase 1,506,000 shares granted to all employees
in 2000.
(3) These amounts represent assumed rates of appreciation in the price of
our common stock during the terms
of the options in accordance with rates specified in applicable federal
securities regulations. Actual gains, if any, on stock option exercises
will depend on the future price of the common stock and overall stock
market conditions. The 5% rate of appreciation over the 10-year option
term of each of the $10.25 and $15.063 stock prices on each date of
grant would result in a stock price of $16.70 and $24.54, respectively.
The 10% rate of appreciation over the 10-year option term of each of the
$10.25 and $15.063 stock prices on each date of grant would result in a
stock price of $26.59 and $39.07, respectively. There is no
representation that the rates of appreciation reflected in this table
will be achieved.
(4) These options expired when Mr. Thompson resigned as an executive officer
effective August 1, 2000.
OPTION VALUES FOR 2000
The following table sets forth information with respect to (i) stock options
exercised in 2000 by the Named Executive Officers and (ii) unexercised stock
options held by such individuals at December 31, 2000.
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED,
OPTIONS HELD AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR END FISCAL YEAR END ($)(1)
ACQUIRED ON VALUE ------------------------------- ------------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
Sim Fass ................ -- -- 682,500 400,000 $1,536,094 $ --
Virgil Thompson.......... -- -- 29,375 205,625 280,234 1,629,766
Norman Barton(2) ........ 66,250 719,981 77,500 165,750 88,281 137,719
Dov Kanner............... -- -- 106,533 210,000 237,498 232,392
Ernest Kelly(3).......... 40,000 283,975 87,500 117,300 -- 139,838
Robert Shaw(4)........... 12,500 60,175 65,000 132,500 -- 141,250
(1) Based on a closing stock price of BTG common stock on December 31, 2000
of $7.0625.
(2) During 2000, Dr. Barton exercised options to purchase 37,500, 7,500,
6,250 and 15,000 shares at an exercise price of $6.625, $8.19, $7.875
and $7.5625, respectively. The closing price of BTG common stock on the
date of exercise was $17.09375.
(3) During 2000, Dr. Kelly exercised options to purchase 40,000 shares at an
exercise price of $7.185. The closing price of BTG common stock on the
dates of exercise was $14.96875 and $13.9375.
(4) During 2000, Mr. Shaw exercised options to purchase 12,500 shares at an
exercise price of $7.406. The closing price of BTG common stock on the
date of exercise was $12.5625.
EMPLOYMENT AGREEMENTS
BTG and Sim Fass entered into an employment agreement dated as of
January 1, 1990 (the "Fass Agreement") pursuant to which Dr. Fass has served as
our President (through May 3, 1999) and Chief Executive Officer. At January 1,
2000, the Fass Agreement was automatically renewed for another two year period,
and will automatically be renewed for successive two year periods thereafter
unless either party gives the other notice of nonrenewal. The Fass Agreement
also provides that BTG will nominate Dr. Fass for election as a director during
all periods when he serves as our President and/or Chief Executive Officer. For
his services, Dr. Fass is currently entitled to an annual salary of $405,000,
with bonuses to be determined at the discretion of the Board. In the event Dr.
Fass' employment is terminated by us at any time for any reason other than
justifiable cause, disability or death, or BTG shall fail to renew the Fass
Agreement at any time within two years following a "Change in Control of the
Company," BTG shall pay Dr. Fass, for a period equal to the longer of (1) the
remaining term of the Fass Agreement or (2) one year (such period being
hereinafter referred to as the "Fass Severance Period") a monthly payment equal
to the sum of (a) 1/12 of Dr. Fass' salary at the time of such termination and
(b) 1/12 of Dr. Fass' most recently declared bonus, which amount shall be in
lieu of any and all other payments due and owing to Dr. Fass under the terms of
the Fass Agreement. During the Fass Severance Period, BTG shall continue to
provide Dr. Fass with health, life and disability insurance. In the event BTG
elects not to renew the Fass Agreement other than within two years following a
"Change in Control of the Company," BTG is obligated to pay Dr. Fass a severance
payment equal to the sum of one month's salary plus 1/12 of his most recently
declared bonus for each year Dr. Fass has been employed by BTG.
Pursuant to the Fass Agreement, all options granted or to be granted to
Dr. Fass under any stock option plan shall become immediately exercisable and
all restrictions against disposition, if any, which have not otherwise lapsed
shall immediately lapse if (i) Dr. Fass' employment with BTG is terminated upon
a determination by the Board that the performance of his duties has not been
fully satisfactory for any reason that would not constitute "justifiable cause"
(as defined in the Fass Agreement), (ii) Dr. Fass dies or is disabled (as
defined in the Fass Agreement) while employed by BTG, (iii) Dr. Fass is not
nominated by BTG for re-election to the Board, other than for justifiable cause,
(iv) there shall occur a material reduction in Dr. Fass' duties, other than for
justifiable cause, or (v) any event constituting a "Change in Control of the
Company" shall occur while Dr. Fass is employed by BTG.
For purposes of the Fass Agreement, a "Change in Control of the Company"
shall be deemed to occur if (i) there shall be consummated (x) any consolidation
or merger of BTG in which BTG is not the continuing or surviving corporation or
pursuant to which shares of BTG common stock would be converted into cash,
securities or other property, other than a merger of BTG in which the holders of
BTG common stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately after the
merger, or (y) any sale, lease, exchange or other transfer (in one transaction
or a series of related
transactions) of all, or substantially all, of the assets of BTG, or (ii) the
stockholders of BTG shall approve any plan or proposal for liquidation or
dissolution of BTG, or (iii) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act) shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 40% or more of BTG's
outstanding common stock other than pursuant to a plan or arrangement entered
into by such person and BTG, or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board
shall cease for any reason to constitute a majority thereof unless the election,
or the nomination for election by BTG's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
BTG and Ernest Kelly entered into an employment agreement dated as of
January 29, 1996 (the "Kelly Agreement") pursuant to which Mr. Kelly serves as
Senior Vice President--Quality Assurance of BTG. At January 29, 2000, the Kelly
Agreement was automatically renewed for an additional two year period. For his
services, Mr. Kelly is currently entitled to an annual salary of $220,500 and to
bonuses to be determined at the discretion of the Board. In connection with the
commencement of his employment with BTG, Mr. Kelly was granted options to
purchase 50,000 shares of BTG common stock at an exercise price of $7.1875 per
share, the fair market value on the date of grant. These options became
exercisable in four annual installments of 12,500 shares each. In the event that
Mr. Kelly's employment is terminated by BTG at any time for any reason other
than justifiable cause, disability or death, or BTG shall fail to renew the
Kelly Agreement, BTG is obligated to pay Mr. Kelly an amount equal to his then
annual salary, payable bi-weekly in equal installments.
BTG and Norman Barton entered into a severance agreement dated as of
April 26, 1996 (the "Barton Agreement"). In March 1998, Dr. Barton was appointed
Senior Vice President-Chief Medical Officer of BTG; prior thereto, Dr. Barton
served as Vice President-Medical Affairs of BTG. For his services, Dr. Barton is
currently entitled to an annual salary of $225,500 and to bonuses to be
determined at the discretion of the Board. In connection with his appointment to
Senior Vice President-Chief Medical Officer, Dr. Barton was granted options to
purchase 25,000 shares of BTG common stock at an exercise price of $7.875 per
share, the fair market value on the date of grant. These options became
exercisable in four equal annual installments of 6,250 shares each. Pursuant to
the terms of the Barton Agreement, in the event that Dr. Barton's employment is
terminated by BTG at any time for any reason other than justifiable cause,
disability or death, BTG is obligated to pay Dr. Barton an amount equal to his
then annual salary, payable bi-weekly in equal installments.
We entered into an Employment Agreement with Robert Shaw dated as of
July 23, 1999 (the "Shaw Agreement") pursuant to which Mr. Shaw serves as our
Senior Vice President and General Counsel. The Shaw Agreement has an initial
term of two years from July 23, 1999 and will thereafter automatically be
renewed for successive two-year periods unless either party gives notice of
non-renewal. For his services, Mr. Shaw is currently entitled to an annual
salary of
$275,000, with bonuses to be determined at the discretion of the Board. In the
event Mr. Shaw's employment is terminated by BTG at any time for any reason
other than justifiable cause, disability or death, or in the event BTG shall
fail to renew the Shaw Agreement, BTG shall pay Mr. Shaw a severance payment
equal to his then current salary plus the amount of his last bonus and Mr. Shaw
shall have the right to exercise any options exercisable as of the date of
termination for a six month period following the termination date. For a twelve
month period following the termination date Mr. Shaw shall continue to
participate in our 401(k) plan and in our health, dental, life and disability
insurance programs.
BTG, BTG Israel and Dov Kanner entered into an Employment Agreement dated
as of January 23, 2000 (the "Kanner Agreement") pursuant to which Mr. Kanner
serves as Senior Vice President of BTG and General Manager of BTG Israel. The
Kanner Agreement has an initial term of two years and will thereafter
automatically be renewed for successive two year periods unless either party
gives notice of non-renewal. For his services Mr. Kanner is currently entitled
to receive an annual salary of $235,000, with bonuses to be determined at the
discretion of the Board. In the event Mr. Kanner's employment is terminated by
BTG at any time for any reason other than justifiable cause, disability or
death, or in the event BTG shall fail to renew the Kanner Agreement, BTG shall
pay Mr. Kanner a severance payment equal to the greater of (i) one year's salary
plus Mr. Kanner's most recent bonus, (ii) the product of one month's salary plus
1/12 of Mr. Kanner's most recently declared bonus multiplied by the number of
years Mr. Kanner has been employed by BTG or (iii) the amounts Mr. Kanner is
entitled to receive under applicable law. Such severance payment will be reduced
by any payments received through Israeli directors insurance and other similar
programs. In connection with Mr. Kanner assuming these new positions, he was
granted options to purchase 100,000 shares of BTG common stock at an exercise
price of $15.063 per share, the fair market value on the date of the grant.
These options become exercisable in four annual installments of 25,000 shares
each.
ITEM 12. BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 31, 2001 (except as
otherwise noted in the footnotes) regarding the beneficial ownership (as defined
by the SEC) of our common stock of: (i) each person known by us to own
beneficially more than five percent of our outstanding common stock; (ii) each
director of BTG; (iii) each executive officer named in the Summary Compensation
Table (see "Item 11. Executive Compensation"); and (iv) all current directors
and executive officers of BTG as a group. Except as otherwise specified, the
named beneficial owner has the sole voting and investment power over the shares
listed.
AMOUNT AND NATURE OF BENEFICIAL PERCENTAGE OF
NAME OF BENEFICIAL OWNER OWNERSHIP OF COMMON STOCK COMMON STOCK
- ------------------------ --------------------------- -------------
Norman Barton.................................... 103,844(1) *
Herbert Conrad................................... 23,966(2) *
Sim Fass......................................... 715,330(3) 1.2%
Dov Kanner....................................... 109,033(4) *
Carl E. Kaplan................................... 27,408(5) *
Ernest Kelly..................................... 109,202(6) *
Allan Rosenfield................................. 35,577(7) *
Robert Shaw...................................... 68,085(8) *
David Tendler.................................... 50,075(9) *
Virgil Thompson.................................. 39,439(10) *
Dan Tolkowsky.................................... 76,774(2) *
Faye Wattleton................................... 33,557(7) *
Herbert Weissbach................................ 31,250(7) *
All directors and executive officers
as a group (15 persons)........................ 1,485,516(11) 2.5%
* Represents less than one percent of BTG common stock.
(1) Consists of 103,250 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 140,000 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(2) Includes 18,750 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 11,250 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(3) Includes 682,500 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 400,000 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(4) Includes 106,533 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 210,000 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(5) Includes 20,625 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 14,375 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(6) Includes 107,300 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 97,500 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(7) Includes 31,250 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 11,250 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(8) Includes 65,000 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 132,500 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(9) Includes 38,750 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 11,250 shares issuable upon the exercise of options
that are not exercisable within 60 days of March 31, 2001.
(10) Includes 35,000 shares that may be acquired through the exercise of
stock options that are exercisable within 60 days of March 31, 2001.
Does not include 7,500 shares issuable upon the exercise of options that
are not exercisable within 60 days of March 31, 2001.
(11) Includes 1,352,184 shares of common stock that may be acquired through
the exercise of stock options that are exercisable within 60 days of
March 31, 2001. Does not include 1,188,125 shares issuable upon the
exercise of options that are not exercisable within 60 days of March 31,
2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Bio-Technology General Corp.
By: /s/ SIM FASS
-------------------------------
Name: Sim Fass
Title: Chairman and CEO
April 25, 2001