**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

**Form 10-K/A**

 

**AnnualReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

 

**for the fiscal year ended December 31, 2003**

 

**CommissionFile Number 0-15313**

 

**SAVIENTPHARMACEUTICALS, INC.**

(Exact name ofRegistrant as specified in its charter)

 

| **Delaware**                                                    |   | **13-3033811**                           |
|-----------------------------------------------------------------|--------|------------------------------------------|
| (State or other jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification Number) |
|                                                            |   |                                     |
| **One Tower Center, 14th Floor,  East Brunswick, New Jersey**   |   | **08816**                                |
| (Address of principal executive offices)                        |   | (Zip Code)                               |

 

Registrant’stelephone number, including area code: (732) 418-9300

 

Securitiesregistered pursuant to Section 12(b) of the Act:

**CommonStock, $.01 par value**

**(Titleof class)**

 

Securitiesregistered pursuant to Section 12(g) of the Act:

**None**

**(Titleof each class)**

 

Indicate by check mark whether the Registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

YES  ý     NO  o

 

Indicate by check mark if disclosure of delinquent filers pursuant toItem 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 informationstatements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. o

 

Indicate by check mark whether the Registrant is an accelerated filer(as defined in Rule 12b-2 of the Act). Yes ý  No o

 

As of March 5, 2004, the number of shares of Common Stock outstandingwas 59,799,345.  The aggregate marketvalue of Common Stock held by non-affiliates of the registrant (based on theclosing price of these securities as reported by the National Association ofSecurities Dealers Automated Quotation System on June 30, 2003) isapproximately $277,769,680.  Shares ofCommon Stock held by executive officers and directors of the registrant are notincluded in the computation.  However,the registrant has made no determination that such individuals are “affiliates”within the meaning of Rule 405 under the Securities Act of 1933.

 

**Documentsincorporated by reference:** None.

 

EXPLANATORY NOTE:

 

ThisAnnual Report on Form 10-K/A has been filed by the Registrant to amend theAnnual Report on Form 10-K filed by the Registrant on March 12, 2004 to includethe information required to be disclosed by Items 10-14 of Part III of Form10-K.

 

 

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**PART III**

 

**ITEM 10.****                                              DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT**

 

**Directors**

 

Our directors, their ages,the year in which each first became a director and their principal occupationsor employment during the past five years are:

 

 
| **Director**         |   | **Age** |   | **Year First  Became Director** |   | **Principal  Occupation During   the Past Five Years**                                                                                                                                                                                                                                                                                                                                                                                                                      |
|----------------------|--------|---------|--------|---------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Herbert Conrad       |   | 71      |   | 1993                            |   | Retired; President of Roche Pharmaceuticals  Division, Hoffmann-La Roche, Inc. from December 1981 until September 1993.  (1)(2)(3)                                                                                                                                                                                                                                                                                                                                     |
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Sim Fass             |   | 62      |   | 1983                            |   | Chairman of the Board since March 1997; CEO  of the Company since May 1984; Treasurer of the Company from August 1983 to  June 2001; President of Bio-Technology General (Israel) Ltd., the Company’s  wholly-owned subsidiary (“BTG Israel”), since November 1999; President of the  Company and BTG Israel from May 1984 to May 1999; Chief Operating Officer of  BTG Israel between August 1983 and May 1987. (1)(4)                                      |
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Jeremy Hayward-Surry |   | 61      |   | 2003                            |   | Retired; President, Pall Corporation from  1994 to August 2003; director from April 1993 to November 2003; Treasurer and  Chief Financial Officer from 1992 to 1997; Executive Vice President from 1992  to 1994; Fellow at the Institute of Chartered Accountants of England and  Wales. (2)(3)(6)                                                                                                                                                                         |
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Stephen O. Jaeger    |   | 59      |   | 2003                            |   | Chairman, Chief Executive Officer and  President eBT International, Inc.—Chairman since March 1999,  Chief Executive Officer from March 1999 to  April 2000 and again since June 2001, President since June 2001; Executive  Vice President and Chief Financial Officer, The Clinical Communications Group  from 1997 to 1998; Vice President, Chief Financial Officer and Treasurer,  Applera Corporation from 1995 to 1997. Certified Public Accountant. (2)(3) |
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Carl E. Kaplan       |   | 65      |   | 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 L.L.P. effective January 1, 1989.   (1)(3)(5)(6)                                                                                                                                                                                                                                         |
|                 |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| David Tendler        |   | 66      |   | 1994                            |   | Partner, Tendler Beretz L.L.C. since  January 1985; Co-Chairman and Chief Executive Officer of Phibro-Salomon, Inc.  from May 1982 until October 1984. (1)(2)(6)                                                                                                                                                                                                                                                                                                            |

 

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| **Director**      |   | **Age** |   | **Year First  Became Director** |   | **Principal  Occupation During   the Past Five Years**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------|--------|---------|--------|---------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Virgil Thompson   |   | 64      |   | 1994                            |   | President, Chief Executive Officer and  Director of Angstrom Pharmaceuticals, Inc. since November 2002;  President, Chief Executive Officer and  Director of Chimeric Therapies, Inc. from September 2000 to August 2002;  President and Chief Operating Officer of the Company from May 1999 through  August 2000; President and Chief Executive Officer of Cytel Corporation from  January 1996 to May 1999; President and Chief Executive Officer of CIBUS  Pharmaceutical, Inc. from July 1994 until January 1996. (1) (3) (6) |
|              |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Faye Wattleton    |   | 60      |   | 1997                            |   | President, Center for the Advancement of  Women since 1995; President of Planned Parenthood Federation of America, Inc.  (New York) from 1978 to 1992. (1) (2)                                                                                                                                                                                                                                                                                                                                                                          |
|              |   |    |   |                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Herbert Weissbach |   | 72      |   | 1997                            |   | Distinguished Research Professor, Director,  Center for Molecular Biology and Biotechnology, Florida Atlantic University,  since January 1997; Vice President, Hoffmann-La Roche, Inc. from 1983 to  1996; Director, Roche Institute of Molecular Biology from 1983 to 1996. (2)                                                                                                                                                                                                                                                        |

 

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(1)                                  Member of theExecutive Committee of the Board of Directors.

(2)                                  Member of the AuditCommittee of the Board of Directors.

(3)                                  Member of theNominating/Corporate Governance Committee of the Board of Directors.

(4)                                  Pursuant to Dr. Fass’employment agreement with us, we have agreed to nominate Dr. Fass for electionas a director during all periods when Dr. Fass is our employee. See “Item 11.Executive Compensation—Employment Agreements.”

(5)                                  Fulbright &Jaworski L.L.P. has rendered legal services to us in 2003 and 2004.

(6)                                  Member of theCompensation and Stock Option Committee of the Board of Directors.

 

Mr. Conrad is a director ofBone Care International, Inc. Messrs. Tendler and Hayward-Surry are bothdirectors of V.I. Technologies, Inc. Mr. Thompson is a director of Questcor Pharmaceuticals, Inc. and AradigmCorporation.  Ms. Wattleton is adirector of Wellchoice, Inc. and Quidel Corporation.  Mr. Jaeger is a director of Aradigm Corporation.

 

**Audit Committee and Audit CommitteeFinancial Expert**

 

Our Board of Directors has aseparately-designated standing Audit Committee established in accordance withSection 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”).  The members of theAudit Committee are Ms. Faye Wattleton and Messrs. Herbert Conrad, StephenJaeger, Jeremy Hayward-Surry, David Tendler (Chairman) and HerbertWeissbach.  Our Board of Directors hasdetermined that Stephen Jaeger is an audit committee financial expert asdefined by Item 401(h) of Regulation S-K and that each member of the AuditCommittee is independent within the meaning of Nasdaq Marketplace Rule4200(a)(15).

#### ** **

#### **Section 16(a) Beneficial Ownership ReportingCompliance**

 

Section 16(a) of theExchange Act, requires our executive officers and directors, as well as personswho beneficially own more than ten percent of our common stock, to file initialreports of ownership and reports of changes in ownership with the SEC.  Executive officers, directors and greaterthan ten percent beneficial owners are required by the SEC to furnish us withcopies of all Section 16(a) forms they file.

 

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Based upon a review of thecopies of such forms furnished to us and written representations from ourexecutive officers and directors, we believe that during fiscal 2003 allSection 16(a) filing requirements applicable to our executive officers,directors and greater than ten percent beneficial owners were complied with,except each of Faye Wattleton and David Tendler failed to file one Form 4 on atimely basis.

** **

**Code of Ethics**

 

Wehave adopted a financial code of ethics that applies to our principal executiveofficer, principal financial officer, principal accounting officer and all ofour other employees performing similar functions.  This financial code ofethics is posted on our website.  The Internet address for our website ishttp://www.savientpharma.com.  We intend to satisfy the disclosurerequirement under Item 10 of Form 8-K regarding an amendment to, or waiverfrom, a provision of this code of ethics by posting such information on ourwebsite, at the address and location specified above.

 

**Executive Officers**

 

See“Item 1. Business-Executive Officers of Savient.”

 

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**ITEM 11.****                                             ****EXECUTIVE COMPENSATION**

 

The following table showsall the cash compensation paid or to be paid by us or our subsidiaries as wellas certain other compensation paid or accrued during the fiscal years indicatedto (i) our Chief Executive Officer, and (ii) each of our four other most highlycompensated executive officers who were serving at the end of 2003(collectively the “Named Executive Officers”).

 

**SUMMARY COMPENSATION TABLE**

 
|                                     |   |       |   |                     |    |             |   | **Long Term**     |   |                |   |
|------------------------------------------|--------|------------|--------|--------------------------|---------|------------------|--------|-------------------|--------|---------------------|--------|
|                                     |   | **Fiscal** |   | **Annual  Compensation** |    | **Compensation** |   | **All Other**     |   |
| **Name and  Principal Position(1)**      |   | **Year**   |   | **Salary($)(2)**         |    | **Bonus($)(3)**  |   | **Options(#)(4)** |   | **Compensation(5)** |   |
| Sim Fass                                 |   | 2003       |   | $                        | 463,374 |             | $      | 271,213           |   | 150,000             |   | $ | 6,000 |   |
| Chairman of the Board                    |   | 2002       |   | 445,552                  |    | 115,000          |   | 95,100            |   | 6,000               |   |
| and Chief Executive Officer              |   | 2001       |   | 419,583                  |    | 260,333          |   | 115,000           |   | 5,250               |   |
|                                     |   |       |   |                     |    |             |   |              |   |                |   |
| Christopher Clement(6)                   |   | 2003       |   | 333,125                  |    | 178,730          |   | 62,500            |   | 6,000               |   |
| President and                            |   | 2002       |   | 214,374                  |    | 56,775           |   | 200,000           |   | 800                 |   |
| Chief Operating Officer                  |   | 2001       |   | —                   |    | —           |   | —            |   | —              |   |
|                                     |   |       |   |                     |    |             |   |              |   |                |   |
| Robert Shaw                              |   | 2003       |   | 325,868                  |    | 166,900          |   | 135,000           |   | 6,000               |   |
| Former Executive Vice President–    |   | 2002       |   | 300,827                  |    | 85,711           |   | 39,400            |   | 5,500               |   |
| Chief Administrative Officer and General |   | 2001       |   | 283,750                  |    | 132,750          |   | 65,000            |   | 5,250               |   |
| Counsel and Secretary(7)                 |   |       |   |                     |    |             |   |              |   |                |   |
|                                     |   |       |   |                     |    |             |   |              |   |                |   |
| Dov Kanner                               |   | 2003       |   | 280,347                  |    | 146,427          |   | 85,000            |   | 77,545              | (9)    |
| Executive Vice President-Chief           |   | 2002       |   | 259,333                  |    | 65,590           |   | 33,600            |   | 71,145              | (9)    |
| Technology Officer and General           |   | 2001       |   | 243,750                  |    | 118,750          |   | 70,000            |   | 63,635              | (9)    |
| Manager of BTG-Israel (8)                |   |       |   |                     |    |             |   |              |   |                |   |
|                                     |   |       |   |                     |    |             |   |              |   |                |   |
| Ernest Kelly                             |   | 2003       |   | 247,650                  |    | 120,791          |   | 75,000            |   | 7,000               |   |
| Senior Vice President –             |   | 2002       |   | 235,000                  |    | 59,273           |   | 30,100            |   | 6,000               |   |
| Quality Assurance, Quality               |   | 2001       |   | 223,125                  |    | 105,375          |   | 50,000            |   | 5,250               |   |
| Control and Regulatory Affairs           |   |       |   |                     |    |             |   |              |   |                |   |
|                                          |        |            |        |                          |         |                  |        |                   |        |                     |        |  |  |  |

 

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(1)                                  Each of the NamedExecutive Officers is a party to an employment agreement with us.  See “—Employment Agreements.”

 

(2)                                  Effective June 1,2001, the salary of each of Messrs. Fass, Shaw, Kanner and Kelly was increasedto $430,000, $290,000, $250,000 and $225,000, respectively, from $405,000,$275,000, $235,000 and $220,500, respectively. The salary of Mr. Kanner was increased from $106,000 to $180,000 onFebruary 1, 2000 when he became one of our Senior Vice Presidents and theGeneral Manager of BTG Israel and to $235,000 effective July 1, 2000.  In connection with the movement of ourexecutive compensation review process from mid-year to year-end, effectiveJanuary 1, 2002 the salary of each of Messrs. Fass, Shaw, Kanner and Kelly wasincreased to $445,552, $300,827, $259,333 and $235,000, respectively.  Effective January 1, 2003, the salary ofeach of Messrs. Fass, Clement, Shaw, Kanner and Kelly was increased to $463,374,$333,125, $315,868, $272,300 and $247,650, respectively.  Mr. Shaw’s salary was subsequently increasedto $325,868 upon his appointment as Executive Vice President-ChiefAdministrative Officer.  Effective January1, 2004, the salary of each of Messrs. Fass, Clement, Kanner and Kelly wasincreased to $482,000, $348,000, $298,000 and $255,000, respectively.

 

(3)                                  In 2001, we moved ourcompensation review process from mid-year to year-end in order to coincide withour fiscal year.  Accordingly, in June2001 each of Messrs. Fass, Shaw, Kanner and Kelly received a bonus for the 2000fiscal year of $160,000, $82,000, $75,000 and $66,000, respectively.  In February 2002, each of Messrs. Fass,Shaw, Kanner

 

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and Kelly received a pro-rated bonus in respect of that June toDecember portion of the 2001 fiscal year of $100,333, $50,750, $43,750 and$39,375, respectively.  Bonuses for 2002were paid in January 2003.  Bonuses for2003 were paid in February 2004.

 

(4)                                  In February 2004,each of Messrs. Fass, Clement, Kanner and Kelly was granted an option topurchase 150,000 shares, 100,000 shares, 85,000 shares and 75,000 shares,respectively.

 

(5)                                  Amount includedrepresents our matching contribution pursuant to our 401(k) definedcontribution plan for all U.S.-based employees and contributions to aprofessional study fund and managers’ insurance, which includes severance payand retirement pension, for Israeli-based employees. Pursuant to the SEC’srules on executive compensation disclosure, “All Other Compensation” does notinclude perquisites because the aggregate amount of such compensation for eachof the persons listed did not exceed the lesser of (i) $50,000 or (ii) 10percent of the combined salary and bonus for such person in each such year.  Such perquisites include (i) car payments,(ii) tuition payments, (iii) payments under a flexible spending program, and(iv) life insurance premium payments made by us on behalf of certain executiveofficers.

 

(6)                                  Mr. Clement joined usin May 2002 as our President and Chief Operating Officer.

 

(7)                                  Mr. Shaw wasappointed our Executive Vice President-Chief Administrative Officer effectiveJanuary 22, 2003.  Prior to that heserved as Senior Vice President – General Counsel and Secretary.  Mr. Shaw ceased to be an executive officerin January 2004.  Under the terms of hisemployment agreement, Mr. Shaw is entitled to severance payments that aggregate$869,660.22.  In addition, we are requiredto provide Mr. Shaw with certain welfare benefits and outplacement assistancethrough October 2006.

 

(8)                                  Mr. Kanner wasappointed Executive Vice President–Chief Technology Officer on September 1,2003.

 

(9)                                  Consists of BTGIsrael contributions to a professional study fund in an amount equal to 7.5% ofsalary and to managers’ insurance, which includes severance pay and retirementpension, equal to 13.3% of salary.  Mr.Kanner contributes 2.5% and 5%, respectively, of his salary to thesefunds.  In 2003, 2002 and 2001, alsoincludes a “gross up” tax payment of $11,397, $10,822 and $10,135,respectively, with respect to the value of a company car provided to Mr.Kanner.

 

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**Option Grants for 2003**

 

The following table setsforth information with respect to option grants in 2003 to the Named ExecutiveOfficers.

 

**OPTION GRANTS IN LAST FISCAL YEAR**

 
| **Name**            |   | **Number of  Securities  Underlying  Options  Granted(#)(1)** |   | **% of Total  Options  Granted to  Employees in  Fiscal Year(2)** |   | **Exercise  or  Base Price  ($/sh)** |   | **Expiration  Date** |    | **Potential  Realizable  Value at Assumed  Annual Rates of  Stock Price  Appreciation for  Option Term(3)** |    |
|---------------------|--------|---------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------|--------|----------------------|---------|-------------------------------------------------------------------------------------------------------------|---------|
|                |
|                |
|                |
|                |
| **5%($)**           |   | **10%($)**                                                    |   |
| Sim Fass            |   | 150,000                                                       |   | 7.3                                                               | %      | $                                    | 2.97   |                 | 1/22/13 |                                                                                                        | 280,500 |   | 709,500 |   |
| Christopher Clement |   | 62,500                                                        |   | 3.0                                                               |   | 2.97                                 |   | 1/22/13              |    | 116,875                                                                                                     |    | 295,625 |   |
| Robert Shaw(4)      |   | 135,000                                                       |   | 6.6                                                               |   | 2.97                                 |   | 1/22/13              |    | 252,450                                                                                                     |    | 638,550 |   |
| Dov Kanner          |   | 85,000                                                        |   | 4.1                                                               |   | 2.97                                 |   | 1/22/13              |    | 158,950                                                                                                     |    | 402,050 |   |
| Ernest Kelly        |   | 75,000                                                        |   | 3.7                                                               |   | 2.97                                 |   | 1/22/13              |    | 140,250                                                                                                     |    | 354,750 |   |
|                     |        |                                                               |        |                                                                   |        |                                      |        |                      |         |                                                                                                             |         |  |  |  |

 

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(1)                                  Options generallyvest in four equal annual installments commencing on the first anniversary dateof the grant; however, options become immediately exercisable upon a change incontrol of the Company.

 

(2)                                  Based upon options topurchase 2,052,382 shares granted to all employees in 2003.

 

(3)                                  These amountsrepresent assumed rates of appreciation in the price of our common stock duringthe terms of the options in accordance with rates specified in applicablefederal securities regulations. Actual gains, if any, on stock option exerciseswill depend on the future price of the common stock and overall stock marketconditions. The 5% rate of appreciation over the 10-year option term of each ofthe $2.97 stock price on the date of grant would result in a stock price of$4.84.  The 10% rate of appreciationover the 10-year option term of each of the $2.97 stock price on the date ofgrant would result in a stock price of $7.70. There is no representation that the rates of appreciation reflected inthis table will be achieved.

 

(4)                                  All but options topurchase 33,750 shares of Mr. Shaw’s unexercised options at December 31, 2003terminated upon Mr. Shaw’s ceasing to be a Savient employee.  Mr. Shaw exercised his options to purchase33,750 shares on April 22, 2004.  

 

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**Option Values for 2003**

 

The following table setsforth information with respect to (i) stock options exercised in 2003 by theNamed Executive Officers and (ii) unexercised stock options held by the NamedExecutive Officers at December 31, 2003.

** **

**AGGREGATEDOPTION EXERCISESIN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES**

 
| **Name**            |   | **Shares  Acquired on  Exercise(#)** |   | **Value  Realized($)** |   | **Number of  Unexercised  Options Held at Fiscal  Year End** |   | **Value of  Unexercised,  In-the-Money Options at  Fiscal Year End($)(1)** |   |
|---------------------|--------|--------------------------------------|--------|------------------------|--------|--------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|
| **Exercisable**     |   | **Unexercisable**                    |   | **Exercisable**        |   | **Unexercisable**                                            |   |
|                |   |                                 |   |                   |   |                                                         |   |                                                                       |   |   |   |   |   |
| Sim Fass(2)         |   | 150,000                              |   | 2,295                  |   | 843,775                                                      |   | 316,325                                                                    |   | $66,600 |   | $246,000 |   |
|                |   |                                 |   |                   |   |                                                         |   |                                                                       |   |   |   |   |   |
| Christopher Clement |   | —                               |   | —                 |   | 50,000                                                       |   | 212,500                                                                    |   | 9,500 |   | 102,500 |   |
|                |   |                                 |   |                   |   |                                                         |   |                                                                       |   |   |   |   |   |
| Robert Shaw(3)      |   | —                               |   | —                 |   | 201,100                                                      |   | 215,800                                                                    |   | — |   | 221,400 |   |
|                |   |                                 |   |                   |   |                                                         |   |                                                                       |   |   |   |   |   |
| Dov Kanner          |   | —                               |   | —                 |   | 312,433                                                      |   | 192,700                                                                    |   | — |   | 139,400 |   |
|                |   |                                 |   |                   |   |                                                         |   |                                                                       |   |   |   |   |   |
| Ernest Kelly        |   | —                               |   | —                 |   | 208,775                                                      |   | 131,325                                                                    |   | — |   | 123,000 |   |

 

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(1)                                  Based on a closingstock price of our common stock on December 31, 2003 of $4.61.

 

(2)                                  During 2003, Dr. Fassexercised an option to purchase 150,000 shares at an exercise price of $4.25,Dr. Fass sold 15,000 of these shares for $4.403 per share.  The closing price of our common stock onAugust 4, 2003, the date of the option exercise and sale was $4.25.

 

(3)                                  All but options topurchase 33,750 shares of Mr. Shaw’s unexercised options at December 31, 2003terminated upon Mr. Shaw’s ceasing to be a Savient employee.  Mr. Shaw exercised his options to purchase33,750 shares on April 22, 2004.

 

**Employment Agreements**

 

We entered into employmentagreements dated as of January 1, 2002 with each of Sim Fass, Dov Kanner,Ernest Kelly and Robert Shaw.  Pursuantto the Employment Agreements, Dr. Fass is serving as our Chief ExecutiveOfficer and Chairman, Mr. Kanner is serving as our Executive VicePresident-Chief Technology Officer and General Manager of BTG-Israel and Dr.Kelly is serving as our Senior Vice President-Quality Assurance, QualityControl and Regulatory Affairs.  Mr.Shaw served as our Executive Vice President-Chief Administrative Officer,General Counsel and Secretary until January 2004, when he ceased to be ouremployee.  We entered into an employmentagreement with each of Christopher Clement and Zebulan Horowitz on May 14, 2002and March 24, 2003, respectively, pursuant to which Mr. Clement is serving asour President and Chief Operating Officer and Dr. Horowitz is serving as ourSenior Vice President-Chief Medical Officer. Each of the agreements, as amended, with Messrs. Fass, Kanner, Shaw,Kelly, Clement and Horowitz are collectively referred to herein as the“Employment Agreements”.  Messrs. Kellyand Horowitz are collectively referred to herein as the “Senior VicePresidents.”

 

Each of the EmploymentAgreements is for an initial three year term and is automatically renewable foradditional one year terms unless either we or the executive gives notice ofnon-renewal at least 90 days prior to the expiration date of the agreement.

 

Pursuant to his EmploymentAgreement, Dr. Fass is currently entitled to an annual salary of $482,000, Mr.Clement is currently entitled to an annual salary of $348,000, Mr. Kanner iscurrently entitled to an annual salary of $298,000, Dr. Kelly is currentlyentitled to an annual salary of $255,000

 

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and Dr. Horowitz is currently entitled to anannual salary of $242,000.  In addition,Dr. Fass, Mr. Clement, Dr. Horowitz, Mr. Kanner and Dr. Kelly are eligible toparticipate in our bonus, long-term incentive and other benefit programs.

 

In the event Dr. Fass’employment is terminated by us at any time for any reason other than Cause (asdefined below), death or disability, by Dr. Fass for Good Reason (as definedbelow) or if we fail to renew Dr. Fass’ Employment Agreement, we are requiredto pay Dr. Fass an amount equal to 2.5 times his base salary and his targetedannual bonus, and Dr. Fass will receive continuation of medical, life anddisability insurance and similar welfare benefits for 2.5 years (3 years if thetermination occurs within 24 months of a Change in Control of the Company (asdefined below)).  However, if weterminate Dr. Fass’ employment or fail to renew his Employment Agreement within24 months following a Change in Control of the Company, the multiplier is 3,rather than 2.5, and Dr. Fass will be “grossed up” for any “golden parachute”excise taxes he is required to pay as a result of the severance payments.

 

In the event Mr. Clement’semployment is terminated by us at any time for any reason other than Cause,death or disability, by Mr. Clement for Good Reason, or if we fail to renew Mr.Clement’s Employment Agreement, we are required to pay Mr. Clement an amountequal to the product determined by multiplying his base salary and his targetedannual bonus by the Clement Service Multiplier.  The Clement Service Multiplier is determined by dividing (a) thelesser of (1) the full number of months since the commencement of hisemployment (but not less than six months) and (2) twenty four by (b) twelve. Inaddition, Mr. Clement will receive continuation of medical, life and disabilityinsurance and similar welfare benefits for that number of months equal to theClement Service Multiplier times 12. However, the Clement Service Multiplier is 2.0 if Mr. Clement terminatesemployment for Good Reason other than within 24 months following a Change inControl of the Company and is 2.5 if within 24 months following a Change in Controlof the Company, we terminate Mr. Clement’s employment without Cause or fail torenew the Employment Agreement (if it would otherwise have expired during theperiod) or Mr. Clement terminates his employment for Good Reason.  In addition, Mr. Clement will be “grossedup” for any “golden parachute” excise taxes he is required to pay as a resultof severance payments.

 

In the event Mr. Kanner’semployment is terminated by us at any time for any reason other than Cause,death or disability, by Mr. Kanner for Good Reason, or if we fail to renew Mr.Kanner’s Employment Agreement, we are required to pay Mr. Kanner the greater of(i) an amount equal to 1.75 (the “Kanner Service Multiplier”) times his basesalary and his targeted annual bonus or (ii) the total amount payable pursuantto Directors Insurance, Keren Hishtalmut and similar programs under Israelilaw.  Mr. Kanner will receivecontinuation of medical, life and disability insurance and similar welfarebenefits for that number of months equal to the Kanner Service Multiplier times12 or the period of time mandated by Israeli law, whichever is greater.  However, the Kanner Service Multiplier is2.25 if within 24 months following a Change in Control of the Company, weterminate Mr. Kanner’s employment without Cause or fail to renew the EmploymentAgreement (if it would otherwise have expired during the period) or Mr. Kannerterminates his employment for Good Reason.

 

In the event a Senior VicePresident’s employment is terminated by us at any time for any reason otherthan Cause, death or disability, by the Senior Vice President for Good Reason,or if we fail to renew the Senior Vice President’s Employment Agreement, we arerequired to pay such Senior Vice President an amount equal to the productdetermined by multiplying his base salary and his targeted annual bonus by theSVP Service Multiplier.  The SVP ServiceMultiplier is the number determined by dividing (a) the lesser of (1) the fullnumber of months since the commencement of his employment (but not less thansix months) and (2) eighteen by (b) twelve. The Senior Vice Presidents generally will receive continuation ofmedical, life and disability insurance and similar welfare benefits for thatnumber of months equal to the SVP Service Multiplier times 12.  However, the SVP Service Multiplier is 1.5if the Senior Vice President terminates employment for Good Reason other thanwithin 24 months following a Change in Control of the Company and is 2 ifwithin 24 months following a Change in Control of the Company, we terminate theSenior Vice President’s employment without Cause or fail to renew theEmployment

 

9

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Agreement (if it would otherwise have expiredduring the period) or the Senior Vice President terminates his employment forGood Reason.

 

Each of Dr. Fass, Mr.Clement, Mr. Kanner and the Senior Vice Presidents agreed pursuant to the termsof their Employment Agreement that $50,000, $45,000, $40,000 and $40,000,respectively, of the aforementioned amount they are entitled to will bewithheld by us for twelve months following the termination of their employmentagreement to ensure compliance with the non-solicitation and non-competitioncovenants of the Employment Agreements described below, except there is nowithholding if the termination is within 24 months of a Change in Control ofthe Company.  Following the terminationof employment of Dr. Fass, Mr. Clement, Mr. Kanner or a Senior Vice Presidentfor any reason other than for Cause, we will reimburse each of Dr. Fass, Mr.Clement, Mr. Kanner and the Senior Vice Presidents for the costs of alloutplacement services obtained by each of Dr. Fass, Mr. Clement, Mr. Kanner andthe Senior Vice Presidents for three years, two and one half years, two years andtwo years, respectively, from the termination of their employment with us, upto a maximum of 20% of their base salary in effect on the date of thetermination of their employment.

 

Pursuant to the EmploymentAgreements, each of Dr. Fass, Mr. Clement, Dr. Horowtiz, Mr. Kanner and Dr.Kelly agreed that during the term of their respective Employment Agreements andfor six months thereafter they will not compete with us.  In addition, each of Dr. Fass, Mr. Clement,Dr. Horowitz, Mr. Kanner and Dr. Kelly agreed that during the term of hisrespective Employment Agreement and for twelve months thereafter he will notsolicit our employees.  These covenantsterminate if, following a Change in Control of the Company, we terminate theexecutive’s employment without Cause or if the executive terminates hisemployment for Good Reason.

 

For purposes of theEmployment Agreements, a “Change in Control of the Company” shall be deemed tooccur as of the first day that any one or more of the following conditions issatisfied:

 

(a)any consolidation or merger in which we arenot the continuing or surviving entity or pursuant to which shares of ourcommon stock would be converted into cash, securities or other property, otherthan (i) a merger of the Company in which the holders of our common stockimmediately prior to the merger have the same proportionate ownership of commonstock of the surviving corporation immediately after the merger, or (ii) aconsolidation or merger that would result in our voting securities outstanding immediatelyprior thereto continuing to represent (by being converted into votingsecurities of the continuing or surviving entity) more than 50% of the combinedvoting power of the voting securities of the continuing or surviving entityimmediately after such consolidation  ormerger and that would result in the members of the Board immediately prior tosuch consolidation or merger (including for this purpose any individuals whoseelection or nomination for election was approved by a vote of at least two-thirdsof such members) constituting a majority of the Board (or equivalent governingbody) of the continuing or surviving entity immediately after suchconsolidation or merger;

 

(b) anysale, lease, exchange or other transfer (in one transaction or a series ofrelated transactions) of all or substantially all our assets;

 

(c)our stockholders approve any plan or proposal for our liquidation ordissolution;

 

(d)any person shall become the beneficial owner (within the meaning of Rule 13d-3under the Exchange Act) of 40% or more of our outstanding common stock otherthan pursuant to a plan or arrangement entered into by such person and us; or

 

(e)during any period of two consecutive years, individuals who at the beginning ofsuch period constitute the entire Board of Directors shall cease for any reasonto constitute a majority of the Board unless the election or nomination forelection by our stockholders of each new

 

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director was approved by avote of at least two-thirds of the directors then still in office who weredirectors at the beginning of the period.

 

For purposes of theEmployment Agreements, “Cause” means: (a) executive materially breached any ofthe terms of his Employment Agreement and fails to correct such breach within15 days after written notice thereof from us; (b) executive is convicted of acriminal offense involving a felony giving rise to a sentence of imprisonment;(c) executive breaches a fiduciary trust for the purpose of gaining a personalprofit, including, without limitation, embezzlement; or (d) despite adequatewarnings, executive intentionally and willfully fails to perform reasonablyassigned duties within the normal and customary scope of his position.

 

For purposes of the EmploymentAgreements, “Good Reason” means the occurrence of one of the following events:(a) a reduction in base salary; (b) a failure to maintain benefits under orrelative level of participation in our employee benefit or retirement plans;(c) a failure to require a successor company to assume and agree to perform ourobligations under the executive’s Employment Agreement; and (d) upon a Changein Control of the Company (i) requiring the executive to be based at a locationrequiring the executive to travel an additional 35 miles per day, (ii)requiring the executive to report to a lower level employee, or (iii) demotingthe executive.  In addition, forpurposes of Dr. Fass’ Employment Agreement “Good Reason” shall include thefailure to nominate Dr. Fass for election to our Board of Directors or hisfailure to be elected as a member of our Board of Directors.

 

We entered into anemployment letter agreement with Alan Rubinfeld, dated December 24, 2003,pursuant to which he will serve as our acting chief financial officer fromJanuary 5, 2004 until April 30, 2004 and thereafter on a month-to-monthbasis.  Mr. Rubinfeld receives $20,833per month during the term of his agreement. Either party may terminate the agreement upon thirty days prior writtennotice to the other party.  In addition,we are paying Tatum CFO Partners, LLP a fee of $4,167 for each month Mr.Rubinfeld remains our employee.  Mr.Rubinfeld is a partner in Tatum CFO Partners, LLP.

** **

**Compensation Committee Interlocksand Insider Participation**

 

The current members of theCompensation and Stock Option Committee are Messrs. Jeremy Hayward-Surry, CarlKaplan, David Tendler and Virgil Thompson (Chairman).  No member of the Committee was, during 2003, an officer or employeeof Savient; however, Mr. Thompson served as our President and Chief OperatingOfficer from May 1999 through August 2000. In addition, Mr. Kaplan is a partner of Fulbright & Jaworski L.L.P.,which provided legal services to Savient in 2003 and is providing legalservices to Savient in 2004; Mr. Hayward-Surry served as president and directorof Pall Corporation, which in 2003 sold approximately $58,000 of filters to ourIsraeli subsidiary; and Mr. Tendler owns less than 1% of a company in which wemade an investment and acquired an option to license a product.  See “Item 13. Certain Relationships andRelated Transactions.”  None of ourexecutive officers serves as a member of the compensation committee or board ofdirectors of any other entity that has an executive officer serving as a memberof our Board of Directors or Compensation and Stock Option Committee.

 

**Compensation of Directors**

###  

### During 2003, our non-employee directors werepaid $10,000 annually in shares of our common stock pursuant to our StockCompensation Plan for Outside Directors (the “Compensation Plan”) and $15,000per annum in cash.  In addition, during2003 non-employee members of the Executive Committee were paid $5,000 per annumin cash, and members of the Audit and Compensation and Stock Option Committees,other than the chairpersons, were paid $5,000 per year, and the chairpersons ofsuch committees were paid $10,000 per year. All these amounts were paid in quarterly installments.  In addition, members of the Audit Committee,the Compensation and Stock Option Committee and the Nominating/CorporateGovernance Committee received $1,000 for each committee meeting attended if

###  

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### notheld on the same day as a meeting of the Board of Directors.  All directors are reimbursed for theirexpenses in connection with attending meetings of our Board and committees ofour Board. In addition, the Board from time to time forms temporary advisorycommittees consisting of one or more members of the Board to review and advisethe Board on a specific issue, and compensates these directors on acase-by-case basis for service on these advisory committees, based on theamount of work involved.

###  

### In February 2004, the Board increased theannual compensation of non-employee directors to $15,000 in shares of ourcommon stock, contingent upon the stockholders’ approval of our 2004 IncentivePlan at our 2004 Annual Meeting of Stockholders, which amends, restates andconsolidates our 2001 Stock Option Plan and our Stock Compensation Plan forOutside Directors, and $20,000 in cash. The Board also approved a per meeting fee of $1,500 for Board meetingsheld in person and $1,000 for telephonic meetings.  Members of the Audit Committee, Nominating/Corporate GovernanceCommittee and Compensation and Stock Option Committee now receive $5,000 peryear ($10,000 for the chairperson) and the chairperson of the ExecutiveCommittee now receives $5,000 annually. Members of the committees also receive $1,500 for in person meetings and$1,000 for telephonic meetings, even if held on the same day as a meeting ofthe Board.

 

Pursuant to the CompensationPlan each director who is neither our officer or employee nor an officer oremployee of one of our subsidiaries (an “Outside Director”) is awardedautomatically on the last business day of each full fiscal quarter subsequentto his or her election or appointment as an Outside Director, such number ofshares of our common stock as has an aggregate Fair Market Value (defined inthe Compensation Plan as the closing price on the Nasdaq Stock Market) equal to$2,500, based on the price of our common stock on the date of issue.   During the 2003 fiscal year, each OutsideDirector eligible to receive shares under the Compensation Plan received 925shares of our common stock on March 31, 2003, 535 shares of our common stock onJune 30, 2003, 495 shares of our common stock on September 30, 2003 and 542shares of our common stock on December 31, 2003.  On March 31, 2003, June 30, 2003, September 30, 2003 and December31, 2003, the Fair Market Value of our common stock was $2.70, $4.67, $5.05 and$4.61, respectively.  Each of Messrs.Herbert Conrad, Carl E. Kaplan, David Tendler and Virgil Thompson and Ms. FayeWattleton received an aggregate of 2,497 shares of our common stock under theCompensation Plan for their services as director during the 2003 fiscalyear.  Each of Messrs. JeremyHayward-Surry and Stephen Jaeger received an aggregate of 1,037 shares of ourcommon stock under the Compensation Plan for their services as director duringthe 2003 fiscal year following their election as directors in June 2003.  On March 17, 2003, Messrs. Thompson andWeissbach were issued 9,678 and 7,703 shares, respectively, of our common stockthe receipt of which they had previously deferred under the CompensationPlan.  On March 31, 2004, each of Ms.Wattleton and Messrs. Conrad, Hayward-Surry, Jaeger, Kaplan, Tendler, Thompsonand Weissbach received 652 shares of our common stock under the CompensationPlan.  On that date, the Fair MarketValue of our common stock was $3.83.** **Nofuture awards will be made under the Compensation Plan.

 

Each non-employee directoralso receives under our 2001 Stock Option Plan an option to purchase 5,000shares of common stock on the last business day of each quarter.  The exercise price of the option is equal tothe market value of the common stock on the date of the grant and the optionbecomes fully exercisable one year after the date of grant. On March 31, 2003,June 30, 2003, September 30, 2003, December 31, 2003 and March 31, 2004, eachof Ms. Wattleton and Messrs. Conrad, Kaplan, Tendler, Thompson and Weissbachreceived an option to purchase 5,000 shares of common stock at an exerciseprice of $2.70, $4.67, $5.05, $4.61 and $3.83 per share, respectively.  Messrs. Hayward-Surry and Jaeger, who wereelected to our Board of Directors in June 2003, received an option to purchase833 shares of common stock at an exercise price of $4.67 on June 30, 2003 andan option to purchase 5,000 shares of common stock on each of September 30,2003, December 31, 2003 and March 31, 2004 at an exercise price of $5.05, $4.61and $3.83 per share, respectively.

 

Our current compensation fornon-employee directors is based upon recommendations of Hewitt Associates,which we engaged in 2001 to conduct a comprehensive review and evaluation ofour compensation programs for executives and non-employee directors and in late2003 to assist us in updating and refining compensation for executives andnon-employee directors.

 

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If our 2004 Incentive Plan,which amends, restates and consolidates our 2001 Stock Option Plan and theCompensation Plan is approved by the stockholders at our 2004 Annual Meeting ofStockholders, our non-management directors will receive, on the last businessday of each quarter, shares of common stock having an aggregate fair marketvalue equal to $3,750 under that plan and options to purchase 5,000 shares ofour common stock having an exercise price equal to the market value on the dateof grant and becoming exercisable one year after the date of grant.  In the event that a non-management directorceases to be a director for any reason other than death, such person mayexercise the option, to the extent exercisable at the time he or she ceases tobe a director, within six months after the date he or she ceases to be adirector.  In the event of death, theoption shall immediately become fully exercisable for a period of twelve monthsafter the date of death, but in no event beyond the expiration of the term ofthe option.

 

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**ITEM 12.****                     ****SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT AND RELATED STOCKHOLDER MATTERS**

 

Thefollowing table sets forth information as of March 31, 2004 (except asotherwise noted in the footnotes) regarding the beneficial ownership (asdefined by the Securities and Exchange Commission (the “SEC”)) of our commonstock by each person known by us to own beneficially more than five percent of ouroutstanding common stock.

 
| **Name of  Beneficial Owner**                                                                                                        |   | **Amount and  Nature of  Beneficial Ownership of  Common Stock** |   | **Percentage  of  Common Stock** |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|----------------------------------|--------|
| OrbiMed  Advisors Inc.(1)  OrbiMed Advisors LLC(1)  OrbiMed Capital LLC(1)  Samuel D. Isaly(1)  767 Third Avenue  New York, NY 10010 |   | 3,072,000                                                        |   | 5.16                             | %      |
|                                                                                                                                 |   |                                                             |   |                             |   |
| Mellon  Financial Corporation(2)  One Mellon Center  Pittsburgh, PA 15258                                                            |   | 3,070,631                                                        |   | 5.15                             | %      |

##  

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## (1)                                  OrbiMed Advisors Inc., OrbiMed AdvisorsLLC, OrbiMed Capital LLC and Samuel Isaly may be deemed to beneficially own3,072,000 shares of our common stock that are held of record by clients ofOrbiMed Advisors Inc. and OrbiMed Advisors LLC.  Each of OrbiMed Advisors Inc., OrbiMed Advisors LLC, OrbiMedCapital LLC and Samuel D. Isaly has shared voting power and shared dispositivepower with respect to the 3,072,000 shares. Information with respect to each of OrbiMed Advisors Inc., OrbiMedAdvisors LLC, OrbiMed Capital LLC and Samuel D. Isaly has been derived fromtheir Schedules 13G/A dated February 17, 2004 as filed with the SEC.

 

## (2)                                  Mellon Financial Corporation and certainof its subsidiaries may be deemed to beneficially own 3,070,631 shares of ourcommon stock which are held of record by clients of Mellon FinancialCorporation or its subsidiaries.  MellonFinancial Corporation has sole voting power with respect to 1,823,556 sharesand sole dispositive power with respect to 3,070,631 shares and does not haveshared voting or dispositive power with respect to any of the shares.  Information with respect to Mellon FinancialCorporation has been derived from their Schedule 13G dated February 2, 2004 asfiled with the SEC.

 

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The following table setsforth information as of March 31, 2004 regarding the beneficial ownership ofour common stock of: (i) each director and nominee for election as ourdirector; (ii) each executive officer and a former executive officer named inthe Summary Compensation Table (see “Executive Compensation”) and (iii) all ofour directors and current executive officers as a group. Except as otherwisespecified, the named beneficial owner has the sole voting and investment powerover the shares listed. 

** **
| **Name of  Beneficial Owner**                                     |   | **Amount and  Nature of Beneficial  Ownership of Common Stock** |   | **Percentage  of  Common Stock** |   |
|-------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------|--------|
| Herbert Conrad(1)                                                 |   | 72,366                                                          |   | *                                |   |
| Christopher Clement(2)                                            |   | 120,651                                                         |   | *                                |   |
| Sim Fass(3)                                                       |   | 1,131,654                                                       |   | 1.9                              | %      |
| Jeremy Hayward-Surry(4)                                           |   | 1,689                                                           |   | *                                |   |
| Stephen O. Jaeger(5)                                              |   | 11,689                                                          |   | *                                |   |
| Dov Kanner(6)                                                     |   | 369,583                                                         |   | *                                |   |
| Carl E. Kaplan(7)                                                 |   | 76,565                                                          |   | *                                |   |
| Ernest Kelly(8)                                                   |   | 239,327                                                         |   | *                                |   |
| Robert Shaw(9)                                                    |   | 46,201                                                          |   | *                                |   |
| David Tendler(10)                                                 |   | 96,204                                                          |   | *                                |   |
| Virgil Thompson(11)                                               |   | 93,767                                                          |   | *                                |   |
| Faye Wattleton(12)                                                |   | 68,806                                                          |   | *                                |   |
| Herbert Weissbach(13)                                             |   | 74,602                                                          |   | *                                |   |
| All directors and executive officers as a  group (14 persons)(14) |   | 2,376,186                                                       |   | 4.0                              | %      |

 

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*                                         Representsless than one percent of our common stock.

 

(1)                                  Includes 60,625shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 21,875 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(2)                                  Includes 115,625shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 246,875 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(3)                                  Includes 905,050shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 405,050 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(4)                                  Mr. Hayward-Surrydoes not hold any stock options that are exercisable within 60 days of March31, 2004. Does not include 15,833 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(5)                                  Mr. Jaeger does nothold any stock options that are exercisable within 60 days of March 31,2004.  Does not include 15,833 sharesissuable upon the exercise of options that are not exercisable within 60 daysof March 31, 2004.

 

(6)                                  Includes 367,083shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 223,050 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(7)                                  Includes 65,625shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 21,875 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

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(8)                                  Includes 235,050shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Does not include 180,050 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2004.

 

(9)                                  Includes 33,750shares that may be acquired through the exercise of stock options that areexercisable within 60 days of March 31, 2004. Mr. Shaw exercised these options on April 22, 2004.  Mr. Shaw does not hold any options that arenot exercisable within 60 days of March 31, 2004.  Mr. Shaw ceased to be an executive officer in January 2004.

 

(10)                            Includes 80,625 shares thatmay be acquired through the exercise of stock options that are exercisablewithin 60 days of March 31, 2004.  Doesnot include 21,875 shares issuable upon the exercise of options that are notexercisable within 60 days of March 31, 2004.

 

(11)                            Includes 73,125 shares thatmay be acquired through the exercise of stock options that are exercisablewithin 60 days of March 31, 2004.  Doesnot include 21,875 shares issuable upon the exercise of options that are notexercisable within 60 days of March 31, 2004.

 

(12)                            Includes 63,750 shares thatmay be acquired through the exercise of stock options that are exercisablewithin 60 days of March 31, 2004.  Doesnot include 21,875 shares issuable upon the exercise of options that are notexercisable within 60 days of March 31, 2004.

 

(13)                            Includes 63,750 shares ofcommon stock that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2004.  Does not include 21,875 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2004.

 

(14)                            Includes 2,049,058 sharesof common stock that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2004.  Does not include 1,349,191 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2004.

 

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**Equity Compensation Plan Information**

 

The following table setsforth information as of December 31, 2003 with respect to shares of our commonstock that may be issued under our equity compensation plans, including the (i)1992 Stock Option Plan, (ii) Stock Option Plan for New Directors, (iii) 1997Stock Option Plan for Non-Employee Directors, (iv) 1998 Employee Stock PurchasePlan, (v) Stock Compensation Plan for Outside Directors and (vi) 2001 StockOption Plan.

 
|                                                            |   | **Number of  securities to be  issued upon exercise of  outstanding options,  warrants and rights** |   | **Weighted-average  exercise price of outstanding  options, warrants and rights** |   | **Number of  securities  remaining available for  future issuance under equity  compensation plans  (excluding securities  reflected in column (a))** |      |
|-----------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|                                                            |   | **(a)**                                                                                             |   | **(b)**                                                                           |   | **(c)**                                                                                                                                               |      |
| **Plan Category**                                               |   |                                                                                                |   |                                                                              |   |                                                                                                                                                  |      |
|                                                            |   |                                                                                                |   |                                                                              |   |                                                                                                                                                  |      |
| **Equity compensation plans approved by  security holders**     |   | 8,363,000                                                                                           | (1)    | $                                                                                 | 7.51   | (1)                                                                                                                                                   | 7,559,584 | (2) |
|                                                            |   |                                                                                                |   |                                                                              |   |                                                                                                                                                  |      |
| **Equity compensation plans not approved by  security holders** |   | None                                                                                                |   | N/A                                                                               |   | N/A                                                                                                                                                   |      |
|                                                            |   |                                                                                                |   |                                                                              |   |                                                                                                                                                  |      |
| **Total**                                                       |   | 8,363,000                                                                                           | (1)    | $                                                                                 | 7.51   | (1)                                                                                                                                                   | 7,559,584 | (2) |

 

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(1)                                  Under the 1998Employee Stock Purchase Plan, participants are granted the right to purchaseour common stock on certain dates within a predetermined purchase period at 85%of our stock price on the first or last day of the period, whichever is lower.  Accordingly, these numbers are notdeterminable.

 

(2)                                  Consists of 1,035,053shares of our common stock available for issuance under our 1998 Employee StockPurchase Plan, 59,531 shares of common stock available for issuance under ourStock Compensation Plan for Outside Directors and 6,465,000 shares of commonstock available for issuance under our 2001 Stock Option Plan.  We no longer make grants under the 1992Stock Option Plan, the Stock Option Plan for New Directors or the 1997 StockOption Plan for Non-Employee Directors, although previously granted optionsremain outstanding.

** **

**ITEM 13.****                                             ****CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

 

Mr. Hayward-Surry served asthe president and a director of Pall Corporation until August 2003 and November2003, respectively.  In 2003, PallCorporation sold filters to Bio-Technology General (Israel) Ltd., one of oursubsidiaries, through its Israeli distributor. The total amount of these sales was approximately $58,000.  We believe that these purchases were made onterms no less favorable to us than would have been obtained from anunaffiliated third party.

 

Mr. Kaplan is a partner ofFulbright & Jaworski L.L.P., which provided legal services to us in 2003and is providing legal services to us in 2004.

 

In July 2003 we entered intoan agreement with Marco Hi-Tech JV Ltd. (“Marco”) pursuant to which it agreedto invest an aggregate of $1,500,000 in Marco preferred stock, representing

 

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approximately 9% of Marco’s fully-dilutedoutstanding common stock, and acquired an option to exclusively market in theUnited States and Europe Huperzine-A, a product for the treatment ofAlzheimer’s disease.  The option is exercisable following completion ofPhase II trials, which are expected to commence in May 2004 with partialfunding by the National Institutes of Health. If we exercise the option, we are obligated to invest an additional$3,000,000 in Marco preferred stock, representing an additional approximately9% of Marco’s fully-diluted outstanding common stock, and to conduct and fundPhase III clinical trials and obtain regulatory approval.  If regulatory approval of the product isobtained in Europe, we will also be required to pay an additional $1,500,000 toretain the exclusive rights in Europe following approval of Huperzine-A in asecond major European country.  We areobligated to use commercially reasonable efforts to commercialize the productfollowing approval, and must pay Marco a royalty of 8% of net sales while patentsare in effect and 4% of net sales thereafter. We invested $500,000 in Marco in July 2003, invested an additional$500,000 in March 2004 and are scheduled to make the remaining $500,000investment in July 2004.  David Tendler, one of our directors, owns commonstock of Marco representing less than 1% of Marco’s fully-diluted outstandingcommon stock.

 

##### **ITEM 14.****                                             ****PRINCIPAL ACCOUNTANT FEES ANDSERVICES**

 

**Grant Thornton LLP**

 

Aggregate fees forprofessional services rendered by Grant Thornton LLP, our principal auditor forthe years ended December 31, 2003 and 2002 were:

 

|               |   | **2003** |     | **2002** |     |
|--------------------|--------|----------|----------|----------|----------|
| Audit Fees         |   | $        | 347,067  |     | $        | 332,668 |   |
| Audit-Related Fees |   | —   |     | 86,012   |     |
| Tax Fees           |   | 237,074  | * * | 52,926   | * * |
| All Other Fees     |   | 58,945   | * * | *—* | * * |
| Total Fees         |   | $        | 643,086  | * * | $        | 471,606 | * * |

 

**Audit Fees**consisted of fees billed for the audit of ourfinancial statements as of and for the year ended December 31, 2003 andDecember 31, 2002, respectively, and the review of our quarterly financialstatements for 2003 and the quarter ended September 30, 2002.

 

**Audit-Related Fees**consisted of fees billed****related to advice withrespect tax accounting, acquisition accounting and financial reporting.

 

**Tax Fees**consisted of fees billed for tax compliance,tax advice and tax planning.

 

**All Other Fees**consisted of fees billed****for general advice withrespect to accounting issues and services with respect reporting requirementsof our 401(k) plan.

 

Our Audit Committee hasdetermined that the non-audit services provided by our auditors in the yearended December 31, 2003 were compatible with the auditors’ independence.

 

18

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**KPMG LLP**

 

KPMG LLP served as ourindependent auditors from May 8, 2002 until October 4, 2002.  For the fiscal year ended December 31, 2002we incurred the following fees from KPMG LLP:

 

|               |   | **2002** |     |
|--------------------|--------|----------|----------|
| Audit Fees         |   | $        | 480,975  |   |
| Audit-Related Fees |   | 95,648   | * * |
| Tax Fees           |   | 125,725  |     |
| All Other Fees     |   | 137,100  | * * |
| Total Fees         |   | $        | 839,448  |   |

 

##### **Audit Fees** consisted offees billed for the re-audit of our financial statements for the years endedDecember 31, 1999, 2000 and 2001 and review of our financial statements for thequarters ended March 31, 2002 and June 30, 2002.

 

**Audit-Related Fees** consisted of fees billed related to foreignfinancial reporting issues relating to conformity with U.S. generally acceptedaccounting principles.

 

**Tax Fees**consisted of****fees billed for taxcompliance, tax advice and tax planning.

 

##### **All Other Fees** consisted offees billed for general advice with respect to accounting issues related toacquisitions.

** **

**Arthur Andersen LLP**

 

Arthur Andersen LLP servedas our independent auditor until May 8, 2002. For the fiscal year ended December 31, 2002, we incurred the followingfees from Arthur Andersen LLP:

 

|               |   | **2002** |     |
|--------------------|--------|----------|----------|
| Audit Fees         |   | $        | 7,540    |   |
| Audit-Related Fees |   | *—* | * * |
| Tax Fees           |   | 95,400   |     |
| All Other Fees     |   | 64,026   |     |
| Total Fees         |   | $        | 166,966  |   |

 

##### **Audit Fees**consisted offees billed for the review of our financial statements as of and for thequarter ended March 31, 2002.

** **

**Tax Fees**consisted of fees billed for tax compliance,tax advice and tax planning.

 

##### **All Other Fees** consisted offees billed for the review of the annual report to stockholders, review of theproxy statement and general advice with respect to accounting issues.

 

##### **Pre-ApprovalPolicies**

 

The Audit Committee pre-approves all audit and non-auditservices provided by our independent auditors prior to the engagement of theindependent auditors with respect to such services.  The Audit Committee has authorized the Chairman of the AuditCommittee to approve fees for permissible non-audit

 

19

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services, up to $100,000per service, provided the underlying service had previously been approved bythe Audit Committee.  The Chairmaninforms the Audit Committee of such approval at its next regularly scheduledmeeting.  All “Audit Fees”,“Audit-Related Fees”, “Tax Fees” and “All Other Fees” set forth above werepre-approved by the Audit Committee in accordance with its pre-approval policy.

 

**PART IV**

 

**ITEM 15.****                                             ****Exhibits, Financial Statements and Reports on Form 8-K**

 

Certain exhibits presentedbelow contain information that has been granted or is subject to a request forconfidential treatment.  Suchinformation has been omitted from the exhibit. Exhibit Nos. 10.13, 10.14, 10.15, 10.16, 10.17, 10.18, 10.19, 10.20,10.21, 10.22, 10.23, 10.24, 10.25, 10.26, 10.27, 10.28 and 10.32 and aremanagement contracts, compensatory plans or arrangements.

 
| **Exhibit  No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.1              |   | Agreement  and Plan of Reorganization, dated as of February 21, 2001, by and among  Bio-Technology General Corp., MYLS Acquisition Corp. and Myelos  Corporation.*(1)                                                                                                                                                                                                                                                                                                                           |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.2              |   | Share  Purchase Agreement, dated September 20, 2002, relating to Rosemont  Pharmaceuticals Limited, between NED-INT Holdings Ltd, Akzo Nobel N.V. and  Bio-Technology General Corp.*(20)                                                                                                                                                                                                                                                                                                        |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.1              |   | Certificate  of Incorporation of the Registrant, as amended. *(2)                                                                                                                                                                                                                                                                                                                                                                                                                               |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2              |   | By-laws  of the Registrant, as amended.*(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.1              |   | Rights  Agreement, dated as of October 7, 1998, by and between Bio-Technology General  Corp. and American Stock Transfer & Trust Company, as Rights Agent, which  includes the form of Certificate of Designations setting forth the terms  of the Series A Junior Participating Cumulative Preferred Stock, par value  $0.01 per share, as Exhibit A, the form of Right Certificate as Exhibit  B and the Summary of Rights to Purchase Preferred Shares as Exhibit  C.*(3) |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.2              |   | Certificate  of Designations of the Series A Junior Participating Cumulative Preferred  Stock.*(3)                                                                                                                                                                                                                                                                                                                                                                                              |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1             |   | Agreement,  dated January 25, 1981, between Bio-Technology General (Israel) Ltd. and Yeda  Research and Development Co., Ltd. (“Yeda”). *(4)                                                                                                                                                                                                                                                                                                                                          |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.2             |   | Letter  from the Chief Scientist to Bio-Technology General (Israel) Ltd. *(4)                                                                                                                                                                                                                                                                                                                                                                                                                   |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.3             |   | Letter  from the Company to Yeda relating to bGH and hSOD. *(5)                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.4             |   | Agreement,  dated January 20, 1984, between Bio-Technology General (Israel) Ltd., and the  Chief Scientist with regard to certain projects. *(6)                                                                                                                                                                                                                                                                                                                                                |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.5             |   | Agreement,  dated July 9, 1984, between the Company and Yeda. *(6)                                                                                                                                                                                                                                                                                                                                                                                                                              |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.6             |   | Agreement,  dated as of January 1, 1984, between the Company and Yissum. *(7)                                                                                                                                                                                                                                                                                                                                                                                                                   |

 

20

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| 10.7   |   | Form  of Indemnity Agreement between the Company and its directors and officers.  *(8)                                                                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                  |
| 10.8   |   | Agreement,  dated November 18, 1988, between the Company and Yeda. *(9)                                                                                               |
|   |   |                                                                                                                                                                  |
| 10.9   |   | Reacquisition  of Rights Agreement, effective June 12, 1991 between the Company and The Du  Pont Merck Pharmaceutical Company. *(10)                                  |
|   |   |                                                                                                                                                                  |
| 10.10  |   | Agreement,  dated as of November 9, 1992, between the Company and SmithKline Beecham  Intercredit B.V. *(11)                                                          |
|   |   |                                                                                                                                                                  |
| 10.11  |   | Research  and Development Services Agreement, dated as of January 1, 1996 by and  between Bio-Technology General Corp. and Bio-Technology General (Israel)  Ltd.*(12) |
|   |   |                                                                                                                                                                  |
| 10.12  |   | Manufacturing  Services Agreement, dated as of January 1, 1996, by and between  Bio-Technology General Corp. and Bio-Technology General (Israel) Ltd.*(12)            |
|   |   |                                                                                                                                                                  |
| 10.13  |   | Bio-Technology  General Corp. Stock Compensation Plan for Outside Directors, as amended.  *(13)                                                                       |
|   |   |                                                                                                                                                                  |
| 10.14  |   | Bio-Technology  General Corp. Stock Option Plan for New Directors, as amended. *(13)                                                                                  |
|   |   |                                                                                                                                                                  |
| 10.15  |   | Bio-Technology  General Corp. 1992 Stock Option Plan, as amended.*(14)                                                                                                |
|   |   |                                                                                                                                                                  |
| 10.16  |   | Bio-Technology  General Corp. 1997 Stock Option Plan for Non-Employee Directors.*(14)                                                                                 |
|   |   |                                                                                                                                                                  |
| 10.17  |   | Bio-Technology  General Corp. 1998 Employee Stock Purchase Plan.*(15)                                                                                                 |
|   |   |                                                                                                                                                                  |
| 10.18  |   | Bio-Technology  General Corp. 2001 Stock Option Plan. *(16)                                                                                                           |
|   |   |                                                                                                                                                                  |
| 10.19  |   | Employment  Agreement, dated as of December 19, 2002, by and between Bio-Technology  General Corp. and Andre Groenewegen. *(22)                                       |
|   |   |                                                                                                                                                                  |
| 10.20  |   | Employment  Agreement, dated as of December 2, 2002, by and between Bio-Technology  General Corp. and Whitney K. Stearns, Jr. *(22)                                   |
|   |   |                                                                                                                                                                  |
| 10.21  |   | Employment  Agreement, dated as of January 1, 2002, by and between Bio-Technology General  Corp. and Sim Fass. *(16)                                                  |
|   |   |                                                                                                                                                                  |
| 10.22  |   | Employment  Agreement, dated as of January 1, 2002, by and between Bio-Technology General  Corp. and Ernest Kelly. *(16)                                              |
|   |   |                                                                                                                                                                  |
| 10.23  |   | Employment  Agreement, dated as of January 1, 2002, by and between Bio-Technology General  Corp. and Robert Shaw. *(16)                                               |
|   |   |                                                                                                                                                                  |
| 10.24  |   | Amendment  to Employment Agreement, dated as of January 22, 2003, by and between  Bio-Technology General Corp. and Robert Shaw.*(22)

                           |
| 10.25  |   | Employment  Agreement, dated as of January 1, 2002, by and between Bio-Technology General  Corp. and Dov Kanner.*(17)                                                 |
|   |   |                                                                                                                                                                  |
| 10.26  |   | Amendment  to Employment Agreement dated as of September 1, 2003 between the Company and  Dov Kanner. *(23)                                                           |

 

21

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| 10.27  |   | Employment  Agreement, dated as of May 14, 2002, by and between Bio-Technology General  Corp. and Christopher Clement.*(18)                  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                         |
| 10.28  |   | Employment  Agreement, dated March 23, 2003, by and between Bio-Technology General Corp.  and Zebulun D. Horowitz, M.D. *(22)                |
|   |   |                                                                                                                                         |
| 10.29  |   | Intention  letter for granting credit,  dated March 22, 2000, between Bank Hapoalim  B.M. and Bio-Technology General (Israel) Ltd.*(19) |
|   |   |                                                                                                                                         |
| 10.30  |   | Unlimited  guaranty of Bio-Technology General Corp. in favor of Bank Hapoalim B.M. *(19)                                                     |
|   |   |                                                                                                                                         |
| 10.31  |   | Lease  and Lease Agreement, dated as of June 11, 2002, between SCV Partners and  Bio-Technology General Corp., as amended. *(17)             |
|   |   |                                                                                                                                         |
| 10.32  |   | Employment  Letter, dated as of December 24, 2003, between Savient Pharmaceuticals, Inc.  and Alan Rubinfeld.*(24)                           |
|   |   |                                                                                                                                         |
| 21     |   | Subsidiaries  of Bio-Technology General Corp. *(21)                                                                                          |
|   |   |                                                                                                                                         |
| 23.1   |   | Consent  of KPMG LLP.*(24)                                                                                                                   |
|   |   |                                                                                                                                         |
| 23.2   |   | Consent  of Grant Thornton LLP.*(24)                                                                                                         |
|   |   |                                                                                                                                         |
| 31.1   |   | Certification  of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.                                    |
|   |   |                                                                                                                                         |
| 31.2   |   | Certification  of the Acting Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.                             |
|   |   |                                                                                                                                         |
| 32.1   |   | Certification  by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002.                                    |
|   |   |                                                                                                                                         |
| 32.2   |   | Certification  of the Acting Chief Financial Officer pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.                             |

 

Exhibits have been includedin copies of this Report filed with the Securities and ExchangeCommission.  Stockholders of the Companywill be provided with copies of these exhibits upon written request to theCompany.

 

----

+                                       Confidential treatment has been granted forportions of such document.

*                                         Previously filed with the Commission asExhibits to, and incorporated herein by reference from, the followingdocuments:

 
| (1) |   | Company’s  Current Report on Form 8-K, dated March 19, 2001.                  |
|-----|--------|------------------------------------------------------------------------------------|
| (2) |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended June 30, 1994. |
| (3) |   | Company’s  Current Report on Form 8-K, dated October 7, 1998.                 |
| (4) |   | Registration  Statement on Form S-1 (File No. 2-84690).                            |
| (5) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1983.   |
| (6) |   | Registration  Statement on Form S-1 (File No. 33-2597).                            |
| (7) |   | Registration  Statement on Form S-2 (File No. 33-12238).                           |

 

22

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| (8)  |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended June 30, 1987.      |
|------|--------|-----------------------------------------------------------------------------------------|
| (9)  |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1988.        |
| (10) |   | Registration  Statement on Form S-3 (File No. 33-39018).                                |
| (11) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1992.        |
| (12) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1998.        |
| (13) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1991.        |
| (14) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 1997.        |
| (15) |   | Company’s  Registration Statement on Form S-8 (File No. 333-64541).                |
| (16) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 2001.        |
| (17) |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended September 30, 2002. |
| (18) |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.     |
| (19) |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.      |
| (20) |   | Company’s  Current Report on Form 8-K, dated September 30, 2002.                   |
| (21) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 2002.        |
| (22) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 2003.        |
| (23) |   | Company’s  Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. |
| (24) |   | Company’s  Annual Report on Form 10-K for the year ended December 31, 2003.        |

 

23

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**SIGNATURES**

 

Pursuant to the requirementsof Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, theRegistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|            | Savient  Pharmaceuticals, Inc. |
|-----------------|--------------------------------|
|            |                           |   |
|            | By:                       | /s/  Sim Fass |   |
|            | Name:                          | Sim  Fass |
|            | Title:                         | Chairman  and CEO |
|            |                           |   |
| April  29, 2004 |                           |   |
|                 |                                |  |  |  |  |

 

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