**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

**Form 10-K/A**

** **
| **Annual  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  for the fiscal year ended December 31, 2002** |
|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                   |   |   |
| **Commission  File Number 0–15313**                                                                                               |
|                                                                                                                                   |   |   |
| **BIO-TECHNOLOGY GENERAL CORP.**                                                                                                       |
| (Exact name of  Registrant as specified in its charter)                                                                                |
|                                                                                                                                   |   |   |
| **Delaware**                                                                                                                           |   | **13–3033811** |
| (State or other jurisdiction of   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’s telephone  number, including area code: **(732) 418-9300**                                                           |
|                                                                                                                                   |   |   |
| Securities registered  pursuant to Section 12(b) of the Act:                                                                           |
| **Common  Stock, $.01 par value**                                                                                                      |
| (Title of class)                                                                                                                       |
|                                                                                                                                   |   |   |
| Securities registered  pursuant to Section 12(g) of the Act:                                                                           |
| **None**                                                                                                                               |
| (Title of each class)                                                                                                                  |

 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

YES o        NO ý(1)

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S–K isnot contained herein, and will not be contained, to the best of Registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10–K or any amendment to this Form 10–K.o

 

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

 

Aggregate market value ofthe Registrant’s Common Stock held by non–affiliates at March 17,2003 (based on the closing sale price for such shares as reported by theNational Association of Securities Dealers Automated Quotation System on June28, 2002):  $352,226,543.  Common Stock outstanding as of March 17,2003: 58,895,048 shares.

 

**Documents incorporated by reference:** None.

 

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(1) The Company’s Current Report on Form 8-K relating to its acquisitionof Rosemont Pharmaceuticals Limited was not timely filed.

 

 

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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 principaloccupations or employment during the past five years are:

 
| **Director**     |   | **Age** |   | **Year First****Became  Director** |   | **Principal  Occupation During  the Past Five Years**                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------------|--------|---------|--------|------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Herbert Conrad   |   | 70      |   | 1993                               |   | Retired; President of  Roche Pharmaceuticals  Division,  Hoffmann-La Roche, Inc. from December 1981 until September 1993.  (1)(2)(3)                                                                                                                                                                                                                                                                                                                                                                                   |
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Sim Fass         |   | 61      |   | 1983                               |   | Chairman of the Board  since March 1997; CEO of BTG since May 1984; Treasurer of BTG from August  1983 to June 2001; President of Bio-Technology General (Israel) Ltd., BTG’s  wholly-owned subsidiary (“BTG Israel”), since November 1999; President of BTG  and BTG Israel from May 1984 to May 1999; Chief Operating Officer of BTG  Israel between August 1983 and May 1987. (1)(4)                                                                                                                           |
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Carl E. Kaplan   |   | 64      |   | 1998                               |   | Senior Partner,  Fulbright & Jaworski L.L.P.;  from  January 1969 to January 1, 1989, a partner of Reavis & McGrath, which  merged with Fulbright & Jaworski effective January 1, 1989.  (1)(3)(5)(6)                                                                                                                                                                                                                                                                                                      |
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Allan Rosenfield |   | 70      |   | 1997                               |   | Dean and DeLamar  Professor, Mailman School of Public Health, Columbia University, since 1986.  (7)                                                                                                                                                                                                                                                                                                                                                                                                                              |
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| David Tendler    |   | 65      |   | 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)(5)                                                                                                                                                                                                                                                                                                                                                                 |
|             |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Virgil Thompson  |   | 63      |   | 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 BTG from May  1999 through August 2000; President and Chief Executive Officer of Cytel  Corporation from January 1996 to May 1999; President and Chief Executive  Officer of CIBUS Pharmaceutical, Inc. from July 1994 until January 1996.(1)  (3) (6) |

 

2

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| **Director**      |   | **Age** |   | **Year First****Became  Director** |   | **Principal  Occupation During  the Past Five Years**                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------|--------|---------|--------|------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Dan Tolkowsky     |   | 82      |   | 1985                               |   | Venture capital  investor; Partner, Adler & Tolkowsky Management Associates, the  general  partner of Athena Venture  Partners L.P., a  venture capital  partnership, from May 1985 to   September 1997; prior thereto, Vice Chairman  and Managing Director of Discount Investment  Corporation (Tel-Aviv); Chairman of  the  Executive Committee of BTG Israel  from 1983  through October 1989. (6)  (7) |
|              |   |    |   |                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Faye Wattleton    |   | 59      |   | 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 |   | 71      |   | 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)                                  Memberof the Executive Committee of the Board of Directors.

(2)                                  Memberof the Audit Committee of the Board of Directors.

(3)                                  Memberof the Nominating Committee of the Board of Directors.

(4)                                  Pursuantto Dr. Fass’ employment agreement with BTG, BTG has agreed to nominate Dr. Fassfor election as a director during all periods when Dr. Fass is employed by BTG.See “Item 11. Executive Compensation—Employment Agreements.”

(5)                                  Fulbright& Jaworski L.L.P. has rendered legal services to BTG in 2001 and 2002.

(6)                                  Memberof the Compensation and Stock Option Committee of the Board of Directors.

(7)                                  Messrs.Rosenfield and Tolkowsky have informed BTG that they do not intend to stand forre-election as directors at the 2003 Annual Meeting of Stockholders.

 

Mr. Conrad is a director of Genvec Inc. and Sicor Inc.Mr. Tendler is a director of V.I. Technologies, Inc.  Mr. Thompson is a director of Questcor Pharmaceuticals, Inc. andAradigm Corporation.  Ms. Wattleton is adirector of Wellchoice, Inc. and Quidel Corporation.

 

During the fiscal year ended December 31, 2002, theBoard of Directors held eleven meetings. Each director attended at least 75% of the meetings of the Board ofDirectors held when he or she was a director and of all committees of the Boardof Directors on which he or she served.

 

The Board of Directors has standing Executive, Audit,Compensation and Stock Option and Nominating Committees.

 

3

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### *TheBoard established the Executive Committee to exercise, to the extent authorizedby law, all of the powers and authority of the Board in the management of thebusiness and affairs of BTG.  Messrs.Virgil Thompson (Chairman), Herbert Conrad, Sim Fass, Carl E. Kaplan and DavidTendler and Ms. Faye Wattleton are the current members of the ExecutiveCommittee.  During the fiscal year endedDecember 31, 2002, the Executive Committee did not meet.*

### *** ***

### *TheBoard formed an Audit Committee to review the internal accounting procedures ofBTG and to consult with and review BTG’s independent auditors and the servicesprovided by such auditors.  The Board ofDirectors has adopted a written charter for the Audit Committee.  Ms. Faye Wattleton and Messrs. HerbertConrad, David Tendler (Chairman) and Herbert Weissbach are the current membersof the Audit Committee.  During thefiscal year ended December 31, 2002, the Audit Committee held twelve meetings.*

** **

The Board formedthe Compensation and Stock Option Committee to review compensation practices,to recommend compensation for executives and key employees, and to administerBTG’s stock option plans.  Messrs. CarlE. Kaplan, David Tendler, Virgil Thompson and Dan Tolkowsky (Chairman) are thecurrent members of the Compensation and Stock Option Committee.  During the fiscal year ended December 31,2002, the Compensation and Stock Option Committee held one meeting.

 

In October 2002, the Board formed a NominatingCommittee.  The Nominating Committee isresponsible for recommending qualified candidates of the Board for election asdirectors of BTG, including the slate of directors that the Board proposes forelection by stockholders at the Annual Meeting.  Messrs. Herbert Conrad, Carl E. Kaplan and Virgil Thompson arethe current members of the Nominating Committee.  During the fiscal year ended December 31, 2002 the NominatingCommittee did not meet.  Stockholderswishing to recommend director candidates for consideration by the committee maydo so by writing to the Secretary of BTG, giving the recommended candidate’sname, biographical data and qualifications.

 

4

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**Compensation of Directors**

 

### *BTG’snon-employee directors are paid $10,000 annually in shares of BTG’s commonstock pursuant to BTG’s Stock Compensation Plan for Outside Directors, which isdescribed below, and $15,000 per annum in cash. These payments are madequarterly.  In addition, non–employeemembers of the Executive Committee are paid $5,000 per annum in cash, payablequarterly, and non-employee members of the Audit Committee, the Compensationand Stock Option Committee and the Nominating Committee receive $1,000 for eachcommittee meeting attended if not held on the same day as a meeting of theBoard of Directors.  In January 2003,the Board increased the compensation of members of the Audit and Compensationand Stock Option Committees, other than the chairpersons, to $5,000 per year,payable quarterly, and the compensation of the chairpersons of such committeesto $10,000 per year, payable quarterly. All directors are reimbursed for their expenses in connection withattending meetings of BTG’s Board.  Inaddition, BTG pays each director who attends BTG’s research and developmentmeetings a fee of $1,500 per day.*

### * *

### *Eachnon-employee director also receives under BTG’s 2001 Stock Option Plan anoption to purchase 5,000 shares of common stock on the last business day ofeach quarter.  The exercise price of theoption is equal to the market value of the common stock on the date of thegrant and the option becomes fully exercisable one year after the date ofgrant. On March 29, 2002, June 28, 2002, September 30, 2002, December 31, 2002and March 31, 2003 each of Ms. Wattleton and Messrs. Conrad, Kaplan,Rosenfield, Tendler, Thompson, Tolkowsky and Weissbach received an option topurchase 5,000 shares of common stock at an exercise price of $4.91, $6.01,$2.961, $3.201 and $2.70 per share, respectively.*

 

BTG’s currentcompensation for non-employee directors is based upon recommendations of HewittAssociates, which was engaged by BTG in 2001 to conduct a comprehensive reviewand evaluation of BTG’s compensation programs for executives and non-employeedirectors.

 

### *Stock Compensation Plan for Outside Directors. *Pursuant to BTG’s Compensation Planfor Outside Directors (the “Compensation Plan”), each director of BTG who isneither an officer nor employee of BTG or its subsidiaries (an “OutsideDirector”) is awarded automatically, in lieu of cash compensation for servicesas a director, 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 BTG’s common stock as has an aggregate Fair Market Value (as definedin the Compensation Plan) equal to $2,500, based on the price of BTG’s commonstock on the date of issue (the “Shares”). The Compensation Plan provides thateach Outside Director will be awarded Shares until such time as he is no longeran Outside Director.  If an OutsideDirector ceases to be an Outside Director for any reason, the number of Shareswhich he or she will be awarded on the last business day of BTG’s next fiscalquarter will be equal to one–third of the number of Shares which he orshe would have been awarded on such date for each complete month that he or shewas an Outside Director in the fiscal quarter in which he or she ceased to bean Outside Director.

 

The Compensation Plan allows any Outside Director todefer the issuance and delivery of BTG’s common stock awarded under theCompensation Plan until the termination of his or her services on BTG’s Boardor such other time as BTG’s Board may determine.  Mr. Thompson deferred receipt of shares under the CompensationPlan from June 1994 to May 1999, and Mr. Weissbach deferred receipt of sharesunder the Compensation Plan from June 1997 through

 

5

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December 2002.  On March 17,2002, Messrs. Thompson and Weissbach were issued 9,678 and 7,703 shares,respectively, of our common stock the receipt of which they had previouslydeferred under the Compensation Plan.

 

During the 2002 fiscal year, each Outside Directoreligible to receive shares under the Compensation Plan received 509 shares ofour common stock on March 31, 2002, 415 shares of our common stock on June 30,2002, 844 shares of our common stock on September 30, 2002 and 781 shares ofour common stock on December 31, 2002. On March 31, 2002, June 30, 2002, September 30, 2002 and December 31,2002, the Fair Market Value of our common stock was $4.91, $6.01, $2.961 and$3.201, respectively.  Each of Messrs.Herbert Conrad, Carl E. Kaplan, Allan Rosenfield, David Tendler, VirgilThompson and Dan Tolkowsky and Ms. Faye Wattleton received an aggregate of2,549 shares of our common stock under the Compensation Plan for their servicesas director during the 2002 fiscal year. On March 31, 2003, each of Ms. Wattleton and Messrs. Conrad, Kaplan,Rosenfield, Tendler, Thompson, Tolkowsky and Weissbach received 925 shares ofour common stock under the Compensation Plan. On that date, the Fair Market Value of our common stock was $2.70.

### * *

### *Stock Option Plan for Non-Employee Directors.*  Pursuant toBTG’s 1997 Stock Option Plan for Non-Employee Directors (the “1997 DirectorsOption Plan”), each non-employee director received an option to purchase 7,500shares of common stock each year upon re-election as a director.  The option exercise price per share ofcommon stock was the Fair Market Value (as defined in the 1997 Directors OptionPlan) of the common stock on the date that the option was granted.  Options granted under the 1997 DirectorsOption Plan have a term of ten years from the date the option is granted,subject to earlier termination upon such person ceasing to be a director.  In general, options issued under the planbecome exercisable upon the six month and first, second and third anniversariesof the date of grant, although the plan provides that options will becomeimmediately exercisable in full upon a “Change in Control” (as defined in thePlan) of BTG.  A total of 500,000 sharesof common stock had been reserved for issuance under the 1997 Directors OptionPlan.  In February 2002 BTG’s Board ofDirectors terminated this plan, although previously granted options remainoutstanding.

* *

*StockOption Plan for Outside Directors.* Pursuant to BTG’s Stock Option Plan for Outside Directors (the“New Directors Plan”), each person who was neither an officer nor employee ofBTG or its subsidiaries and who was elected or appointed a director of BTGautomatically received on the date of his or her initial election orappointment to our Board of Directors (the “Grant Date”) an option to purchase20,000 shares of our common stock (the “Option”) at a per share exercise priceequal to the Fair Market Value (as defined in the New Directors Plan) of ourcommon stock on the Grant Date.  Ingeneral, Options issued under the New Directors Plan became exercisable uponthe six month and first, second and third anniversaries of the date of thegrant and expire on the tenth anniversary of the date of the grant.  The New Directors Plan expired January 29,2000, although previously granted options remain outstanding.

 

Mr. Herbert J. Conrad, who was elected a director ofBTG on October 14, 1993, was automatically granted an Option at a per shareprice of $5.8125.  Mr. David Tendler andMr. Virgil Thompson, who were elected as directors of BTG on June 2, 1994, wereeach automatically granted an Option at a per share exercise price of $2.9375.Ms. Faye Wattleton and

 

6

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Messrs.  Allan Rosenfield andHerbert Weissbach, who were elected directors of BTG on June 18, 1997, wereeach automatically granted an Option at a per share exercise price of$13.9375.  Mr. Carl E. Kaplan, who waselected a director of BTG on June 17, 1998, was automatically granted an Optionat a per share exercise price of $7.91.

#### ** **

#### **Section 16(a) Beneficial Ownership Reporting Compliance**

 

Section 16(a) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”), requires BTG’s executive officers anddirectors, as well as persons who beneficially own more than ten percent ofBTG’s common stock, to file initial reports of ownership and reports of changesin ownership with the SEC.  Executiveofficers, directors and greater than ten percent beneficial owners are requiredby the SEC to furnish BTG with copies of all Section 16(a) forms they file.

 

Based upon a review of the copies of such formsfurnished to BTG and written representations from BTG’s executive officers anddirectors, BTG believes that during fiscal 2002 all Section 16(a) filingrequirements applicable to its executive officers, directors and greater than tenpercent beneficial owners were complied with, except each of Norman Barton (whoserved as an executive officer until September 2002) and Dov Kanner failed tofile on Form 4 on a timely basis and Whitney K. Stearns, Jr., failed to file aForm 3 on a timely basis.

** **

**Executive Officers**

 

See “Item 1.Business–Executive Officers of BTG.”

 

 

**ITEM 11.****                                              EXECUTIVECOMPENSATION**

 

The following table shows all the cash compensationpaid or to be paid by BTG or its subsidiaries as well as certain othercompensation paid or accrued during the fiscal years indicated to (i) the ChiefExecutive Officer of BTG, and (ii) each of the four other most highlycompensated executive officers of BTG who were serving at the end of 2002(collectively the “Named Executive Officers”).

**SUMMARYCOMPENSATION TABLE**

 
|                                                                |   |       |   |             |    | **Annual**       |   | **Long Term**    |   |                |   |
|---------------------------------------------------------------------|--------|------------|--------|------------------|---------|------------------|--------|------------------|--------|---------------------|--------|
|                                                                |   | **Fiscal** |   |             |    | **Compensation** |   | **Compensation** |   | **All Other**       |   |
| **Name and Principal Position(1)**                                  |   | **Year**   |   | **Salary($)(2)** |    | **Bonus($)(3)**  |   | **Options(#)**   |   | **Compensation(4)** |   |
| Sim Fass                                                            |   | 2002       |   | $                | 445,552 |             | $      | 115,000          |   | 95,100              |   | $ | 6,000  |   |
| Chairman of the  Board and****Chief                                 |   | 2001       |   | 419,583          |    | 260,333          |   | 115,000          |   | 5,250               |   |
| Executive  Officer                                                  |   | 2000       |   | 395,000          |    | 155,000          |   | 150,000          |   | 5,250               |   |
|                                                                |   |       |   |             |    |             |   |             |   |                |   |
| Christopher Clement(5)                                              |   | 2002       |   | 214,374          |    | 56,775           |   | 200,000          |   | 800                 |   |
| President and  Chief Operating                                      |   | 2001       |   | —           |    | —           |   | —           |   | —              |   |
| Officer                                                             |   | 2000       |   | —           |    | —           |   | —           |   | —              |   |
|                                                                |   |       |   |             |    |             |   |             |   |                |   |
| Robert Shaw                                                         |   | 2002       |   | 300,827          |    | 85,711           |   | 39,400           |   | 5,500               |   |
| Executive Vice  President-Chief                                     |   | 2001       |   | 283,750          |    | 132,750          |   | 65,000           |   | 5,250               |   |
| Administrative  Officer and General  Counsel and  Secretary(6) |   | 2000       |   | 220,500          |    | 70,000           |   | 75,000           |   | 5,250               |   |
|                                                                |   |       |   |             |    |             |   |             |   |                |   |
| Dov Kanner(7)                                                       |   | 2002       |   | 259,333          |    | 65,590           |   | 33,600           |   | 71,145              | (8)    |
| Senior Vice  President and General                                  |   | 2001       |   | 243,750          |    | 118,750          |   | 70,000           |   | 63,635              | (8)    |
| Manager of BTG  Israel                                              |   | 2000       |   | 203,225          |    | 65,000           |   | 190,000          |   | 51,848              | (8)    |
|                                                                |   |       |   |             |    |             |   |             |   |                |   |
| Ernest Kelly                                                        |   | 2002       |   | 235,000          |    | 59,273           |   | 30,100           |   | 6,000               |   |
| Senior Vice  President Quality                                      |   | 2001       |   | 223,125          |    | 105,375          |   | 50,000           |   | 5,250               |   |
| Assurance,  Quality Control and Regulatory Affairs                  |   | 2000       |   | 216,499          |    | 62,500           |   | 35,000           |   | 5,250               |   |
|                                                                     |        |            |        |                  |         |                  |        |                  |        |                     |        |  |  |  |  |  |  |  |  |

 

7

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(1)                                  Eachof the Named Executive Officers who is currently an executive officer is aparty to an employment agreement with BTG. See “—Employment Agreements.”

 

(2)           Effective June 1, 2001, the salary ofeach of Messrs. Fass, Shaw, Kanner and Kelly was increased to $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 Senior Vice President of BTG and the GeneralManager of BTG Israel and to $235,000 effective July 1, 2000.  In connection with the movement of BTG’sexecutive 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.

 

(3)           Bonuses paid in 2000 were for the1999 fiscal year.  In 2001, BTG movedits compensation review process from mid-year to year-end in order to coincidewith BTG’s fiscal year.  Accordingly, inJune 2001 each of Messrs. Fass, Shaw, Kanner and Kelly received a bonus for the2000 fiscal year of $160,000, $82,000, $75,000 and $66,000, respectively.  In February 2002, each of Messrs. Fass,Shaw, Kelly and Kanner 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.

 

(4)           Amount included represents BTG’smatching contribution pursuant to its 401(k) defined contribution plan for allU.S.-based employees and contributions to a professional study fund andmanagers’ insurance, which includes severance pay and retirement pension, forIsraeli-based employees. Pursuant to the SEC’s rules on executive compensationdisclosure, “All Other Compensation” does not include perquisites because theaggregate amount of such compensation for each of the persons listed did notexceed the lesser of (i) $50,000 or (ii) 10 percent of the combined salary andbonus 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 premiumpayments made by BTG on behalf of certain executive officers.

 

(5)           Mr. Clement joined BTG in May 2002 asPresident and Chief Operating Officer.

 

(6)           Mr. Shaw was appointed Executive VicePresident-Chief Administrative Officer of BTG effective January 22, 2003.  Prior to that he served as Senior VicePresident — General Counsel and Secretary.

 

(7)           Mr. Kanner became Senior VicePresident and the General Manager of BTG Israel on February 1, 2000.

 

(8)           Consists of BTG Israel contributionsto a professional study fund in an amount equal to 7.5% of salary and tomanagers’ insurance, which includes severance pay and retirement pension, equalto 13.3% of salary.  Mr. Kannercontributes 2.5% and 5%, respectively, of his salary to these funds.  In 2002, 2001 and 2000, also includes a“gross up” tax payment of $10,822, $10,135 and $7,725, respectively, withrespect to the value of a company car provided to Mr. Kanner.

 

8

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**OptionGrants for 2002**

 

The following table sets forth information withrespect to option grants in 2002 to the Named Executive Officers.

** **

**OPTIONGRANTS IN LAST FISCAL YEAR**

 
|                 |   |              |   |                |   |             |   |           |    | **Potential  Realizable** |   |
|----------------------|--------|-------------------|--------|---------------------|--------|------------------|--------|----------------|---------|---------------------------|--------|
|                 |   |              |   |                |   |             |   |           |    | **Value at  Assumed**     |   |
|                 |   | **Number of**     |   | **% of Total**      |   |             |   |           |    | **Annual  Rates of**      |   |
|                 |   | **Securities**    |   | **Options**         |   |             |   |           |    | **Stock  Price**          |   |
|                 |   | **Underlying**    |   | **Granted to**      |   | **Exercise  or** |   |           |    | **Appreciation  for**     |   |
|                 |   | **Options**       |   | **Employees  in**   |   | **Base Price**   |   | **Expiration** |    | **Option  Term (3)**      |   |
| **Name**             |   | **Granted(#)(1)** |   | **Fiscal  Year(2)** |   | **($/sh)**       |   | **Date**       |    | **5% ($)**                |   | **10% ($)** |   |
| Sim  Fass            |   | 95,100            |   | 5.5                 | %      | $                | 7.72   |           | 2/20/12 |                      | $      | 462,186 |   | $ | 1,169,730 |   |
|                 |   |              |   |                |   |             |   |           |    |                      |   |   |   |
| Christopher  Clement |   | 200,000           |   | 11.6                |   | 4.42             |   | 5/14/12        |    | 556,000                   |   | 1,408,000 |   |
|                 |   |              |   |                |   |             |   |           |    |                      |   |   |   |
| Dov  Kanner          |   | 30,100            |   | 1.7                 |   | 7.72             |   | 2/20/12        |    | 146,286                   |   | 370,230 |   |
|                 |   |              |   |                |   |             |   |           |    |                      |   |   |   |
| Ernest  Kelly        |   | 30,100            |   | 1.7                 |   | 7.72             |   | 2/20/12        |    | 146,286                   |   | 370,230 |   |
|                 |   |              |   |                |   |             |   |           |    |                      |   |   |   |
| Robert  Shaw         |   | 39,400            |   | 2.3                 |   | 7.72             |   | 2/20/12        |    | 191,484                   |   | 484,620 |   |
|                      |        |                   |        |                     |        |                  |        |                |         |                           |        |  |  |  |  |  |

 

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(1)                                  Optionsgenerally vest in four equal annual installments commencing on the firstanniversary date of the grant; however, options become immediately exercisableupon a change in control of BTG.

 

(2)           Based upon optionsto purchase 1,730,000 shares granted to all employees in 2002.

 

(3)           These amounts represent assumed ratesof appreciation in the price of our common stock during the terms of theoptions in accordance with rates specified in applicable federal securitiesregulations. Actual gains, if any, on stock option exercises will depend on thefuture price of the common stock and overall stock market conditions. The 5%rate of appreciation over the 10-year option term of each of the $4.42 and$7.72 stock prices on each date of grant would result in a stock price of $7.20and $12.58, respectively.  The 10% rateof appreciation over the 10-year option term of each of the $4.42 and $7.72stock prices on each date of grant would result in a stock price of $11.46 and$20.02, respectively.  There is norepresentation that the rates of appreciation reflected in this table will beachieved.

 

9

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**OptionValues for 2002**

 

The following table sets forth information with respect to unexercisedstock options held by the Named Executive Officers at December 31, 2002.  None of the Named Executive Officersexercised options in 2002.

** **

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

 
| **Name**             |   | **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            |   | 897,525                                                      |   | 270,075                                                                     |   | $ | 0.00 |   | $ | 0.00 |   |
|                 |   |                                                         |   |                                                                        |   |   |   |   |   |
| Christopher  Clement |   | 50,000                                                       |   | 150,000                                                                     |   |   | 0.00 |   |   | 0.00 |   |
|                 |   |                                                         |   |                                                                        |   |   |   |   |   |
| Dov  Kanner          |   | 264,933                                                      |   | 155,200                                                                     |   |   | 0.00 |   |   | 0.00 |   |
|                 |   |                                                         |   |                                                                        |   |   |   |   |   |
| Ernest  Kelly        |   | 177,525                                                      |   | 87,575                                                                      |   |   | 0.00 |   |   | 0.00 |   |
|                 |   |                                                         |   |                                                                        |   |   |   |   |   |
| Robert  Shaw         |   | 153,600                                                      |   | 128,300                                                                     |   |   | 0.00 |   |   | 0.00 |   |
|                      |        |                                                              |        |                                                                             |        |  |  |  |  |  |  |  |

 

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(1)                                  Basedon a closing stock price of our common stock on December 31, 2002 of $3.20. AtDecember 31, 2002, none of the Named Executive Officers held unexercised,in-the-money options.

####  

10

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#### **Employment Agreements**

 

BTG entered into employment agreements dated as ofJanuary 1, 2002 with each of Sim Fass, Dov Kanner, Ernest Kelly and RobertShaw.  Pursuant to the EmploymentAgreements Dr. Fass is serving as Chief Executive Officer and Chairman of BTG,Dr. Kelly is serving as Senior Vice President-Quality Assurance, QualityControl and Regulatory Affairs, Mr. Kanner is serving as Senior VicePresident-General Manager BTG-Israel and Mr. Shaw is serving as Executive VicePresident, Chief Administrative Officer, General Counsel and Secretary. BTGentered into an employment agreement with each of Christopher Clement, WhitneyStearns, Jr. and Zebulan Horowitz on May 14, 2002, December 2, 2002 and March24, 2003, respectively, pursuant to which Mr. Clement is serving as Presidentand Chief Operating Officer, Mr. Stearns is serving as Senior VicePresident-Chief Financial Officer and Treasurer and Dr. Horowitz is serving asSenior Vice President-Chief Medical Officer. Each of the agreements, as amended, with Messrs. Fass, Kanner, Kelly,Shaw, Clement, Stearns and  Horowitz arecollectively referred to herein as the “Employment Agreements”.  Messrs. Kanner, Kelly, Stearns and Horowitzare collectively referred to herein as the “Senior Vice Presidents.”

 

Each of the Employment Agreements is for an initialthree year term and is automatically renewable for additional one year termsunless either BTG or the executive gives notice of non-renewal at least 90 daysprior to the expiration date of the agreement.

 

Pursuant to his Employment Agreement Dr. Fass iscurrently entitled to an annual salary of $463,342, Mr. Clement is currentlyentitled to an annual salary of $333,374, Mr. Shaw is currently entitled to anannual salary of $325,868, Dr. Kelly is currently entitled to an annual salaryof $247,650, Mr. Kanner is currently entitled to an annual salary of $272,300,Mr. Stearns is currently entitled to an annual salary of $250,000 and Dr.Horowitz is currently entitled to an annual salary of $232,000.  In addition, Dr. Fass, Mr. Clement, Mr. Shawand the Senior Vice Presidents are eligible to participate in BTG’s bonus,long-term incentive and other benefit programs.

 

In the event Dr. Fass’ employment is terminated by BTGat any time for any reason other than Cause (as defined below), death ordisability, by Dr. Fass for Good Reason (as defined below) or if BTG shall failto renew Dr. Fass’ Employment Agreement, BTG will pay Dr. Fass an amount equalto 2.5 times his base salary and his targeted annual bonus, and Dr. Fass willreceive continuation of medical, life and disability insurance and similarwelfare benefits for 2.5 years (3 years if the termination occurs within 24months of a Change in Control of the Company (as defined below)).  However, if termination of employment by BTGor Dr. Fass or failure to renew his Employment Agreement occurs within 24months following a Change in Control of the Company, the multiplier shall be 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’s employment is terminated byBTG at any time for any reason other than Cause, death or disability, by Mr.Clement for Good Reason, or if BTG shall fail to renew Mr. Clement’s EmploymentAgreement, BTG will pay Mr. Clement an amount equal to the product determinedby multiplying his base salary and his targeted annual bonus by the ClementService Multiplier.  The Clement ServiceMultiplier is determined by dividing (a) the lesser of (1) the full number ofmonths since the commencement of his employment (but not less

 

11

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than six months) and (2) twenty four by (b) twelve. In addition, Mr.Clement will receive continuation of medical, life and disability insurance andsimilar welfare benefits for that number of months equal to the Clement ServiceMultiplier times 12.  However, the ClementService Multiplier is 2.0 if Mr. Clement terminates employment for Good Reasonother than within 24 months following a Change in Control of the Company and is2.5 if within 24 months following a Change in Control of the Company, BTGterminates Mr. Clement’s employment without Cause or fails to renew theEmployment Agreement (if it would otherwise have expired during the period) orMr. 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. Shaw’s employment is terminated byBTG at any time for any reason other than Cause, death or disability, by Mr.Shaw for Good Reason, or if BTG shall fail to renew Mr. Shaw’s EmploymentAgreement, BTG will pay Mr. Shaw an amount equal to 1.75 (the “Shaw ServiceMultiplier”) times (ii) his base salary and his targeted annual bonus, and Mr.Shaw will receive continuation of medical, life and disability insurance and similarwelfare benefits for that number of months equal to the Shaw Service Multipliertimes 12.  However, the Shaw ServiceMultiplier is 2.25 if within 24 months following a Change in Control of theCompany, BTG terminates Mr. Shaw’s employment without Cause or fails to renewthe Employment Agreement (if it would otherwise have expired during the period)or Mr. Shaw terminates his employment for Good Reason.

 

In the event a Senior Vice President’s employment isterminated by BTG at any time for any reason other than Cause, death ordisability, by the Senior Vice President for Good Reason, or if BTG shall failto renew the Senior Vice President’s Employment Agreement, BTG will pay suchSenior Vice President an amount equal to the product determined by multiplyinghis base salary and his targeted annual bonus by the SVP ServiceMultiplier.  The SVP Service Multiplieris the number determined by dividing (a) the lesser of (1) the full number ofmonths since the commencement of his employment (but not less than six months)and (2) eighteen by (b) twelve; provided, however, that Mr. Kanner will receivethe greater of the product resulting from the formula set forth above or thetotal amount payable pursuant to Directors Insurance, Keren Hishtalmut andsimilar programs under Israeli law.  TheSenior Vice Presidents generally will receive continuation of medical, life anddisability insurance and similar welfare benefits for that number of monthsequal to the SVP Service Multiplier times 12, except that Mr. Kanner willreceive such benefits for the SVP Service Multiplier times 12 or the period oftime mandated by Israeli law, whichever is greater.  However, the SVP Service Multiplier is 1.5 if the Senior VicePresident terminates employment for Good Reason other than within 24 monthsfollowing a Change in Control of the Company and is 2 if within 24 monthsfollowing a Change in Control of the Company, BTG terminates the Senior VicePresident’s employment without Cause or fails to renew the Employment Agreement(if it would otherwise have expired during the period) or the Senior VicePresident terminates his employment for Good Reason.

 

Each of Dr. Fass, Mr. Clement, Mr. Shaw and the SeniorVice Presidents agreed pursuant to the terms of their Employment Agreement that$50,000, $45,000, $40,000 and $40,000, respectively, of the aforementionedamount they are entitled to will be withheld by BTG for twelve months followingthe termination of their Employment Agreement to ensure compliance with thenon-solicitation and non-competition covenants of the Employment Agreements

 

12

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described below, except there is no withholding if the termination iswithin 24 months of a Change in Control of the Company.  Following the termination of employment ofDr. Fass, Mr. Clement, Mr. Shaw or a Senior Vice President for any reason otherthan for Cause, each of Dr. Fass, Mr. Clement, Mr. Shaw and the Senior VicePresidents will be reimbursed by BTG for the costs of all outplacement servicesobtained by each of Dr. Fass, Mr. Clement, Mr. Shaw and the Senior Vice Presidents for three years, twoand one half years, two years and two years, respectively, from the terminationof their employment with BTG up to a maximum of 20% of their base salary ineffect on the date of the termination of their employment with BTG.

 

Pursuant to the Employment Agreements Dr. Fass, Mr.Clement, Mr. Shaw and each of the Senior Vice President agreed that during theterm of their respective Employment Agreements and for six months thereafterthey will not compete with BTG.  Inaddition, Dr. Fass, Mr. Clement, Mr. Shaw and each of the Senior Vice Presidentagreed that during the term of their respective Employment Agreements and fortwelve months thereafter they will not solicit employees of BTG.  These covenants terminate if the executive’semployment is terminated by BTG without Cause or by the executive with GoodReason following a Change in Control of the Company.

 

For purposes of the Employment Agreements, a “Change inControl of the Company” shall be deemed to occur as of the first day that anyone or more of the following conditions is satisfied: (a) any consolidation or merger in which BTG is notthe continuing or surviving entity or pursuant to which shares of BTG’s commonstock would be converted into cash, securities, or other property, other than(i) a merger of BTG in which the holders of BTG’s common stock immediatelyprior to the merger have the same proportionate ownership of common stock ofthe surviving corporation immediately after the merger, or (ii) a consolidationor merger which would result in the voting securities of BTG outstandingimmediately prior thereto continuing to represent (by being converted intovoting securities of the continuing or surviving entity) more than 50% of thecombined voting power of the voting securities of the continuing or survivingentity immediately after such consolidation  or merger and which would result in the members of the Board immediatelyprior to such consolidation or merger (including for this purpose anyindividuals whose election or nomination for election was approved by a vote ofat least two-thirds of such members) constituting a majority of the Board (orequivalent governing body) of the continuing or surviving entity immediatelyafter such consolidation or merger; (b) any sale, lease, exchange orother transfer (in one transaction or a series of related transactions) of allor substantially all BTG’s assets; (c) BTG’s stockholders approve any plan orproposal for the liquidation or dissolution of BTG; (d) any person shall becomethe beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)of 40% or more of BTG’s outstanding common stock other than pursuant to a planor arrangement entered into by such person and BTG; or (e) during any period oftwo consecutive years, individuals who at the beginning of such periodconstitute the entire Board of Directors shall cease for any reason toconstitute a majority of the Board unless the election or nomination forelection by BTG’s stockholders of each new director was approved by a vote ofat least two-thirds of the directors then still in office who were directors atthe beginning of the period.

 

For purposes of the Employment Agreements, “Cause”means: (a) executive materially breached any of the terms of his EmploymentAgreement and fails to correct such breach within 15 days after written noticethereof from BTG; (b) executive is convicted of a criminal offense

 

13

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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 Employment Agreements, “GoodReason” means the occurrence of one of the following events: (a) a reduction inbase salary; (b) a failure to maintain benefits under or relative level ofparticipation in BTG’s employee benefit or retirement plans; (c) a failure torequire a successor company to assume and agree to perform BTG’s obligationsunder the executive’s Employment Agreement; and (d) upon a Change in Control ofthe Company (i) requiring the executive to be based at a location requiring theexecutive to travel an additional 35 miles per day, (ii) requiring theexecutive to report to a lower level employee, or (iii) demoting theexecutive.  In addition, for purposes ofDr. Fass’ Employment Agreement “Good Reason” shall include the failure tonominate Dr. Fass for election as a director of BTG or his failure to beelected as a director of BTG.

 

**ITEM 12.****                                              SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS**

 

                The followingtable sets forth information as of March 31, 2003 (except as otherwise noted inthe footnotes) regarding the beneficial ownership (as defined by the Securitiesand Exchange Commission (the “SEC”)) of our common stock by each person knownby us to own beneficially more than five percent of our outstanding commonstock.

 
| **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 |   | 4,778,500                                                       |   | 8.14                             | %      |
|                                                                                                                                   |   |                                                            |   |                             |   |
| Mellon Financial Corporation(2)  One Mellon Center  Pittsburgh, PA 15258                                                               |   | 2,997,149                                                       |   | 5.10                             | %      |

## *** ***

## ******

## *** (1) OrbiMed AdvisorsInc., OrbiMed Advisors LLC, OrbiMed Capital LLC and Samuel Isaly may be deemedto beneficially own 4,778,500 shares of our common stock which are held ofrecord by clients of OrbiMed Advisors Inc. Each of OrbiMed Advisors Inc., OrbiMed Advisors LLC, OrbiMed Capital LLCand Samuel Isaly has shared voting power and shared dispositive power withrespect to the 4,778,500 shares. Information with respect to each of OrbiMed Advisors Inc., OrbiMedAdvisors LLC, OrbiMed Capital LLC and Samuel Isaly has been derived from theirSchedule 13G/A dated February 14, 2003 as filed with the SEC.***

## *** ***

## ***(2) Mellon Financial Corporation and certain of itssubsidiaries may be deemed to beneficially own 2,997,149 shares of our commonstock which are held of record by clients of Mellon Financial Corporation orits subsidiaries.  Mellon FinancialCorporation has sole voting power with respect to 2,100,174 shares, sharedvoting power with respect to 360,375 shares and sole dispositive power with respectto 2,997,149 shares and does not have shared dispositive power with respect toany of the shares.  Information withrespect to Mellon Financial Corporation has been derived from their Schedule13G dated January 21, 2003 as filed with the SEC.***

## *** ***

14

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The following table sets forth information as of March31, 2003 regarding the beneficial ownership of our common stock of: (i) each ofour directors; (ii) each executive officer named in the Summary CompensationTable (see “Item 11. Executive Compensation”); and (iii) all of our directorsand executive officers as a group. Except as otherwise specified, the namedbeneficial owner has the sole voting and investment power over the shareslisted.

 
| **Name of Beneficial Owner**                                     |   | **Amount and  Nature of Beneficial  Ownership of Common Stock** |   | **Percentage  of  Common Stock** |   |
|------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------|--------|
| Herbert  Conrad(1)                                               |   | 46,392                                                          |   |                             | *      |
| Christopher  Clement(2)                                          |   | 51,903                                                          |   |                             | *      |
| Sim  Fass(3)                                                     |   | 1,038,044                                                       |   | 1.74                             | %      |
| Dov  Kanner(4)                                                   |   | 267,433                                                         |   |                             | *      |
| Carl  E. Kaplan(5)                                               |   | 50,591                                                          |   |                             | *      |
| Ernest  Kelly(6)                                                 |   | 180,641                                                         |   |                             | *      |
| Allan  Rosenfield(7)                                             |   | 58,003                                                          |   |                             | *      |
| Robert  Shaw(8)                                                  |   | 162,611                                                         |   |                             | *      |
| David  Tendler(9)                                                |   | 72,501                                                          |   |                             | *      |
| Virgil  Thompson(10)                                             |   | 67,793                                                          |   |                             | *      |
| Dan  Tolkowsky(11)                                               |   | 99,200                                                          |   |                             | *      |
| Faye  Wattleton(12)                                              |   | 45,684                                                          |   |                             | *      |
| Herbert  Weissbach(13)                                           |   | 58,003                                                          |   |                             | *      |
| All  directors and executive officersas a group (15 persons)(14) |   | 2,206,299                                                       |   | 3.63                             | %      |

 

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*              Represents less than one percent of BTG’s common stock.

 

(1)                                  Includes36,875 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(2)                                  Includes50,000 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 212,500 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(3)                                  Includes897,525 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 420,075 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(4)                                  Includes264,933 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 240,200 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

15

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(5)                                  Includes41,875 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(6)                                  Includes177,525 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 162,575 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(7)                                  Includes49,375 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise of optionsthat are not exercisable within 60 days of March 31, 2003.  Mr. Rosenfield is not standing forre-election as a director.

 

(8)                                  Includes153,600 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 263,300 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(9)                                  Includes56,875 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(10)                            Includes49,375 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(11)                            Includes36,875 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.  Mr. Tolkowsky is not standing forre-election as a director.

 

(12)                            Includes40,000 shares that may be acquired through the exercise of stock options thatare exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable upon the exercise ofoptions that are not exercisable within 60 days of March 31, 2003.

 

(13)                            Includes49,375 shares of common stock that may be acquired through the exercise ofstock options that are exercisable within 60 days of March 31, 2003.  Does not include 25,625 shares issuable uponthe exercise of options that are not exercisable within 60 days of March 31,2003.

 

(14)                            Includes1,904,208 shares of common stock that may be acquired through the exercise ofstock options that are exercisable within 60 days of March 31, 2003.  Does not include 1,653,650 shares issuableupon the exercise of options that are not exercisable within 60 days of March31, 2003.

 

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**EQUITY COMPENSATION PLAN INFORMATION**

 

The following table sets forth information as of December 31, 2002 withrespect to shares of the our common stock that may be issued under our equitycompensation plans, including our (i) 1992 Stock Option Plan, (ii) Stock OptionPlan for New Directors, (iii) 1997 Stock Option Plan for Non-EmployeeDirectors, (iv) 1998 Employee Stock Purchase Plan, (v) Stock Compensation Planfor Outside Directors and (vi) 2001 Stock Option 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))** |   |
|----------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Plan Category**                                              |   | **(a)**                                                                                              |   | **(b)**                                                                             |   | **(c)**                                                                                                                                               |   |
|                                                           |   |                                                                                                 |   |                                                                                |   |                                                                                                                                                  |   |
| **Equity compensation plans approved by security holders**     |   | 8,573,000                                                                                            | (1)    | $ 8.54                                                                              | (1)    | 9,539,529                                                                                                                                             | (2)    |
| **Equity compensation plans not approved by security holders** |   | None                                                                                                 |   | N/A                                                                                 |   | N/A                                                                                                                                                   |   |
|                                                           |   |                                                                                                 |   |                                                                                |   |                                                                                                                                                  |   |
| **Total**                                                      |   | 8,573,000                                                                                            | (1)    | $ 8.54                                                                              | (1)    | 9,539,529                                                                                                                                             | (2)    |

 

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(1)Under the 1998 Employee Stock Purchase Plan, participants are granted the rightto purchase our common stock on certain dates within a predetermined purchaseperiod at 85% of our stock price on the first or last day of the period,whichever is lower.  Accordingly, thesenumbers are not determinable.

 

(2)    Consists of 1,638,224 sharesof our common stock available for issuance under our 1998 Employee StockPurchase Plan, 96,530 shares of common stock available for issuance under ourStock Compensation Plan for Outside Directors and 7,804,775 shares of commonstock available for issuance under our 2001 Stock Option Plan.  BTG no longer makes 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.****                                        CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

 

None.

 

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**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, asamended, the Registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.

 
|           |   | Bio-Technology General Corp. |
|----------------|--------|------------------------------|
|           |   |                         |
|           |   | By:                          | /s/ Sim Fass |   |
|           |   | Name: Sim Fass               |
|           |   | Title: Chairman and CEO      |
|           |   |                         |
|           |   |                         |
| April 30, 2003 |   |                         |

 

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CERTIFICATIONS

 

I, Sim Fass, certify that:

 

1.             Ihave reviewed this Annual Report on Form 10-K/A of Bio-Technology GeneralCorp.;

 

2.             Basedon my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.             Basedon my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this annual report.

 

4.             Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a) designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisannual report is being prepared;

 

b) evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this annual report (the“Evaluation Date”); and

 

c) presented in thisannual report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.             Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):

 

a) all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b) any fraud, whether ornot material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.             Theregistrant’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could

 

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significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| April 30, 2003 |   |                          |
|----------------|--------|-------------------------------|
|           |   |                          |
|           |   |                          |
|           |   | /s/ Sim Fass                  |   |
|           |   | Sim Fass                      |
|           |   | Chairman of the Board and CEO |

 

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I, Whitney K. Stearns, Jr., certify that:

 

1.             Ihave reviewed this Annual Report on Form 10-K/A of Bio-Technology GeneralCorp.;

 

2.             Basedon my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.             Basedon my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this annual report.

 

4.             Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a) designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisannual report is being prepared;

 

b) evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this annual report (the“Evaluation Date”); and

 

c) presented in thisannual report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.             Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):

 

a) all significantdeficiencies in the design or operation of internal controls which could adverselyaffect the registrant’s ability to record, process, summarize and reportfinancial data and have identified for the registrant’s auditors any materialweaknesses in internal controls; and

 

b) any fraud, whether ornot material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.             Theregistrant’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could

 

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significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| April 30, 2003 |                                                              |
|----------------|-------------------------------------------------------------------|
|           |                                                              |
|           |                                                              |
|           |                                                              |
|           | /s/ Whitney K. Stearns, Jr.                                       |   |
|           | Whitney K. Stearns, Jr.                                           |
|           | Senior Vice President—Chief Financial Officer  and Treasurer |

 

 

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I, Yehuda Sternlicht, certify that:

 

1.             Ihave reviewed this Annual Report on Form 10-K/A of Bio-Technology GeneralCorp.;

 

2.             Basedon my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.             Basedon my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this annual report.

 

4.             Theregistrant’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a) designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisannual report is being prepared;

 

b) evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this annual report (the“Evaluation Date”); and

 

c) presented in thisannual report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.             Theregistrant’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):

 

a) all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b) any fraud, whether ornot material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.             The registrant’sother certifying officers and I have indicated in this annual report whether ornot there were significant changes in internal controls or in other factorsthat could

 

23

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significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| April 30, 2003 |                                          |
|----------------|-----------------------------------------------|
|           |                                          |
|           |                                          |
|           |                                          |
|           | /s/ Yehuda Sternlicht                         |   |
|           | Yehuda Sternlicht                             |
|           | Vice President— Chief Accounting Officer |

 

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CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THESARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Bio-TechnologyGeneral Corp. (“Company”) on Form 10-K/A for the year ended December 31, 2002as filed with the Securities and Exchange Commission on the date hereof (the“Report”), I, Sim Fass, Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of theSarbanes-Oxley Act of 2002, that:

 

(1)           TheReport fully complies with the requirements of section 13(a) or 15(d) of theSecurities Exchange Act of 1934; and

 

(2)           Theinformation contained in the Report fairly presents, in all material respects,the financial condition and results of operations of the Company.

 

 

| By:    | /s/ Sim Fass            |   |
|--------|-------------------------|--------|
|   | Sim Fass                |
|   | Chief Executive Officer |
|   | April 30, 2003          |

 

A signed original of this written statement requiredby Section 906 has been provided to Bio-Technology General Corp. and will beretained by Bio-Technology General Corp. and furnished to the Securities andExchange Commission or its staff upon request.

 

25

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CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THESARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Bio-TechnologyGeneral Corp. (the “Company”) on Form 10-K/A for the year ended December 31,2002 as filed with the Securities and Exchange Commission on the date hereof(the “Report”), I, Whitney K. Stearns, Jr., Senior Vice President—ChiefFinancial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C.§ 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           TheReport fully complies with the requirements of section 13(a) or 15(d) of theSecurities Exchange Act of 1934; and

 

(2)           Theinformation contained in the Report fairly presents, in all material respects,the financial condition and results of operations of the Company.

 

 
| By:    | /s/ Whitney K. Stearns, Jr.                                       |   |
|--------|-------------------------------------------------------------------|--------|
|   | Whitney K. Stearns, Jr.                                           |
|   | Senior Vice President—Chief Financial Officer and  Treasurer |
|   | April 30, 2003                                                    |

 

A signed original of this written statement requiredby Section 906 has been provided to Bio-Technology General Corp. and will beretained by Bio-Technology General Corp. and furnished to the Securities andExchange Commission or its staff upon request.

 

26

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CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THESARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Bio-TechnologyGeneral Corp. (the “Company”) on Form 10-K/A for the year ended December 31,2002 as filed with the Securities and Exchange Commission on the date hereof(the “Report”), I, Yehuda Sternlicht, Vice President—Chief Accounting Officerof the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           TheReport fully complies with the requirements of section 13(a) or 15(d) of theSecurities Exchange Act of 1934; and

 

(2)           Theinformation contained in the Report fairly presents, in all material respects,the financial condition and results of operations of the Company.

 

 
| By:    | /s/ Yehuda Sternlicht                        |   |
|--------|----------------------------------------------|--------|
|   | Yehuda Sternlicht                            |
|   | Vice President—Chief Accounting Officer |
|   | April 30, 2003                               |

 

A signed original of thiswritten statement required by Section 906 has been provided to Bio-TechnologyGeneral Corp. and will be retained by Bio-Technology General Corp. andfurnished to the Securities and Exchange Commission or its staff upon request

 

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