SCHEDULE 14A
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                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

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                      Exchange Act of 1934 (Amendment No. )

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                               Cytogen Corporation
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                               CYTOGEN CORPORATION
                              600 College Road East
                           Princeton, New Jersey 08540



                                      May 9, 2002

To Our Stockholders:

         You are  cordially  invited  to  attend  the  2002  Annual  Meeting  of
Stockholders of Cytogen Corporation at 11:00 A.M., local time, on Tuesday,  June
18, 2002, at the Radisson Hotel, Route One at Ridge Road, Princeton,  New Jersey
08540.

         The  Notice of  Meeting  and Proxy  Statement  on the  following  pages
describe the matters to be presented at the meeting.

         It is  important  that your shares be  represented  at this  meeting to
assure the presence of a quorum.  Whether or not you plan to attend the meeting,
we hope  that you will  have your  stock  represented  by  signing,  dating  and
returning your proxy in the enclosed envelope,  as soon as possible.  Your stock
will be voted in accordance with the instructions you have given in your proxy.

         Thank you for your continued support.

                                      Sincerely,



                                      /s/ H. Joseph Reiser
                                      H. Joseph Reiser
                                      President and Chief Executive Officer


   CYTOGEN CORPORATION
                              600 College Road East
                           Princeton, New Jersey 08540

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                            To Be Held June 18, 2002

         The  Annual  Meeting  of   Stockholders   (the  "Meeting")  of  Cytogen
Corporation,  a  Delaware  corporation  (the  "Company"),  will  be  held at the
Radisson Hotel, Route One at Ridge Road, Princeton,  New Jersey, on Tuesday June
18, 2002, at 11:00 A.M., local time, for the following purposes:

(1)    To  elect  six  directors  to serve  until  the next  Annual  Meeting  of
       Stockholders and until their  respective  successors shall have been duly
       elected and qualified;

(2)    To amend,  as  required,  the  Company's  1995 Stock  Option  Plan,  1999
       Non-Employee  Director Stock Option Plan and By-Laws,  as applicable,  to
       provide  that  without  the  approval  of a  majority  of  the  Company's
       stockholders, the Company shall not:

              (a) grant stock appreciation rights with an exercise price that is
                  less  than the fair  market  value  of the  underlying  common
                  stock; or

              (b) effectively amend or replace certain outstanding  equity-based
                  awards in a manner that would result in lower exercise prices,
                  accelerated  vesting  schedules or the issuance of  restricted
                  stock; and

(3)    To transact  such other  business as may properly come before the Meeting
       or any adjournment or adjournments thereof.

         Holders of Common Stock of record at the close of business on April 22,
2002 are entitled to notice of and to vote at the Meeting, or any adjournment or
adjournments  thereof.  A complete list of such stockholders will be open to the
examination of any stockholder at the Company's  principal  executive offices at
600 College Road East, Princeton, New Jersey 08540 for a period of 10 days prior
to the Meeting.  The Meeting may be adjourned from time to time without  notice,
by announcement at the Meeting.

         IT IS  IMPORTANT  THAT YOUR  SHARES BE  REPRESENTED  REGARDLESS  OF THE
NUMBER OF SHARES YOU MAY HOLD.  WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON,  PLEASE  COMPLETE,  DATE AND SIGN THE  ENCLOSED  PROXY  CARD AND MAIL IT
PROMPTLY IN THE  ENCLOSED  RETURN  ENVELOPE.  THE PROMPT  RETURN OF PROXIES WILL
ENSURE A QUORUM AND SAVE THE COMPANY THE EXPENSE OF FURTHER  SOLICITATION.  EACH
PROXY  GRANTED MAY BE REVOKED BY THE  STOCKHOLDER  APPOINTING  SUCH PROXY AT ANY
TIME BEFORE IT IS VOTED.  IF YOU RECEIVE  MORE THAN ONE PROXY CARD  BECAUSE YOUR
SHARES ARE  REGISTERED  IN DIFFERENT  NAMES OR  ADDRESSES,  EACH SUCH PROXY CARD
SHOULD BE SIGNED AND RETURNED TO ASSURE THAT ALL OF YOUR SHARES WILL BE VOTED.

                         By Order of the Board of Directors


                         /s/ H. Joseph Reiser
Princeton, New Jersey    H. Joseph Reiser, President and Chief Executive Officer
May 9, 2002

        The Company's 2001 Annual Report accompanies the Proxy Statement.



                              CYTOGEN CORPORATION
                              600 College Road East
                           Princeton, New Jersey 08540

                       -----------------------------------

                                 PROXY STATEMENT

                       -----------------------------------

         This Proxy Statement is furnished in connection  with the  solicitation
by the Board of Directors of Cytogen Corporation (also referred to in this Proxy
Statement as the "Company",  "Cytogen",  "we" or "us") of proxies to be voted at
our Annual Meeting of Stockholders  to be held on Tuesday,  June 18, 2002 at the
Radisson Hotel,  Route One at Ridge Road,  Princeton,  New Jersey at 11:00 a.m.,
local time, and at any adjournment or adjournments thereof. Holders of record of
our common stock, $.01 par value per share, as of the close of business on April
22,  2002,  will be entitled to notice of and to vote at the Annual  Meeting and
any adjournment or adjournments  thereof. As of that date, there were [ ] shares
of common  stock  issued and  outstanding  and  entitled to vote.  Each share of
common  stock is  entitled  to one vote on any  matter  presented  at the Annual
Meeting.  The aggregate  number of common stock votes entitled to be cast at the
Annual  Meeting is [ ]. The holders of common  stock will vote as a single class
for all proposals.

         If proxies in the accompanying form are properly executed and returned,
the  shares of common  stock  represented  thereby  will be voted in the  manner
specified  therein.  If not  otherwise  specified,  the  shares of common  stock
represented by the proxies will be voted:

         (i)  FOR, the election of the six nominees named below as directors;

         (ii) FOR, a proposal to amend, as required, our 1995 Stock Option Plan,
         the "1995 Plan", our 1999 Non-Employee  Director Stock Option Plan, the
         "Director  Plan",  and our By-Laws,  the "By-Laws",  as applicable,  to
         provide that without the approval of a majority of our stockholders, we
         shall not:

              (a) grant stock appreciation rights with an exercise price that is
                  less  than the fair  market  value  of the  underlying  common
                  stock; or

              (b) effectively amend or replace certain outstanding  equity-based
                  awards in a manner that would result in lower exercise prices,
                  accelerated  vesting  schedules or the issuance of  restricted
                  stock (as further described below); and

         (iii) in the  discretion  of the persons  named in the enclosed form of
         proxy, on any other proposals which may properly come before the Annual
         Meeting or any adjournment or adjournments thereof.

         Any  stockholder  who has  submitted  a proxy may revoke it at any time
before it is voted, by written notice addressed to and received by our Corporate
Secretary,  by  submitting  a duly  executed  proxy  bearing a later  date or by
electing  to vote in person at the  Annual  Meeting.  The mere  presence  at the
Annual Meeting of the person  appointing a proxy does not,  however,  revoke the
appointment.

         The presence, in person or by proxy, of holders of shares of our common
stock in the aggregate having a majority of the votes entitled to be cast by the
holders of common stock at the Annual  Meeting,  shall  constitute a quorum with
respect to all  matters  presented.  The  affirmative  vote by the  holders of a
plurality of the shares of common  stock  represented  at the Annual  Meeting is
required for the election of directors,  provided a quorum of such  stockholders
is present in person or by proxy.  All actions  proposed  herein  other than the
election of directors  may be taken upon the  affirmative  vote of  stockholders
possessing a majority of the requisite  voting power  represented  at the Annual
Meeting, provided a quorum is present in person or by proxy.

         Abstentions  are included in the shares  present at the Annual  Meeting
for purposes of  determining  whether a quorum is present,  and are counted as a
vote against for purposes of determining whether a proposal is approved.  Broker
non-votes  (when  shares  are  represented  at the  Annual  Meeting  by a  proxy
specifically conferring only limited authority to vote on certain matters and no
authority to vote on other  matters) are  included in the  determination  of the
number of shares  represented  at the Annual Meeting for purposes of determining
whether a quorum is present,  but are not counted  for  purposes of  determining
whether a proposal has been approved and thus have no effect on the outcome.



         This Proxy  Statement,  together  with the related proxy card, is being
mailed  to our  stockholders  on or about  May 9,  2002.  The  Annual  Report to
Stockholders  of the Company for the year ended  December  31,  2001,  including
financial statements,  is being mailed together with this Proxy Statement to all
stockholders  of record as of April 22,  2002.  In  addition,  we have  provided
brokers,  dealers,  banks,  voting trustees and their nominees,  at our expense,
with  additional  copies of the Annual Report so that such record  holders could
supply such materials to beneficial owners as of April 22, 2002.











                                       2



                              ELECTION OF DIRECTORS

         At the Annual  Meeting,  six directors are to be elected  (which number
shall  constitute  our entire Board of  Directors) to hold office until the 2003
Annual  Meeting of  Stockholders,  and until  their  successors  shall have been
elected and  qualified.  The holders of common  stock,  voting as a class,  will
elect each such director.

         It is the  intention of the persons named in the enclosed form of proxy
to vote the stock represented thereby,  unless otherwise specified in the proxy,
for the election as directors of the persons whose names and biographies  appear
below. All such persons are, at present,  members of our Board of Directors.  In
the event any of the nominees should become  unavailable or unable to serve as a
director,  it is  intended  that  votes  will be cast for a  substitute  nominee
designated  by our Board of  Directors.  Our Board of Directors has no reason to
believe that the nominees named will be unable to serve if elected.  Each of the
nominees has  consented to being named in this Proxy  Statement  and to serve if
elected.

         The current members of our Board of Directors who are also nominees for
election to our Board of Directors are as follows:



                                                 Served as a                Positions with
                Name                     Age    Director Since                the Company
-------------------------------------    ---    --------------    ----------------------------------
                                                         
James A. Grigsby.....................     59         1996         Chairman of the Board

H. Joseph Reiser.....................     55         1998         President, Chief Executive Officer
                                                                  and Director

John E. Bagalay, Jr..................     68         1995         Director

Stephen K. Carter....................     64         1998         Director

Robert F. Hendrickson................     69         1995         Director

Kevin G. Lokay.......................     45         2001         Director


         The principal  occupations  and business  experience,  for at least the
past five years, of each nominee are as follows:

         James A.  Grigsby has served on our Board of  Directors  since May 1996
and has  served as  Chairman  of the Board  since  June  1998.  Mr.  Grigsby  is
President  and  principal  owner of Grigsby & Smith,  a financial  planning  and
investment  management firm located in Pittsfield,  MA. Previously,  Mr. Grigsby
was  President  of Cancer  Care  Management  LLC, a  consulting  firm  providing
consulting  services regarding cancer disease  management  issues.  From 1989 to
1994, Mr. Grigsby was President of CIGNA  Corporation's  International  Life and
Employee Benefits Division,  which operated in over 20 countries worldwide,  and
during that period he also  served as the head of CIGNA's  national  health care
sales  force.  Prior to that time,  since  1978,  he held a number of  executive
positions with CIGNA Corporation. Mr. Grigsby received a Bachelor of Arts degree
in  Mathematics  from  Baylor  University  and is a  Fellow  of the  Society  of
Actuaries.

          H.   Joseph Reiser joined  Cytogen in August 1998 as President,  Chief
Executive Officer and as a member of our Board of Directors.  Most recently, Dr.
Reiser was Corporate Vice President and General Manager,  Pharmaceuticals  and a
member  of the  board of  directors,  for  Berlex  Laboratories  Inc.,  the U.S.
subsidiary of Schering AG. During his 17 year tenure at Berlex,  Dr. Reiser held
positions  of  increasing  responsibility,  serving  as the first  President  of
Schering Berlin's Venture Corporation,  Vice President,  Technology and Industry
Relations,  and Vice President,  Drug  Development  and  Technology.  Dr. Reiser
received his Ph.D. in  Physiology  from Indiana  University  School of Medicine,
where he also earned his Masters and Bachelor of Science degrees.

          John E.  Bagalay,  Jr.  has  served  on our Board of  Directors  since
October  1995.  Dr.  Bagalay  was a  director  of  Cellcor,  Inc.  prior  to our
acquisition  of Cellcor in October  1995.  He was our interim  President and CEO
from January 1998 to August 1998, and our Chief  Financial  Officer from October
1987 to August  1988.  He has been  Senior  Advisor  to the  Chancellor,  Boston
University  since January 1998. He was a director,  Chief Operating  Officer and

                                       3



Chief  Financial  Officer of Eurus  Technologies,  Inc.  from January 1999 until
August 2001 and Chief Executive  Officer from October 2000 until August 2001. He
was also a Director of Eurus  International  Limited,  a company organized under
the laws of England and Wales,  since  January  2000.  He served as the Managing
Director of the Community  Technology  Fund,  the venture  capital  affiliate of
Boston University,  from September 1989 until January 1998. Dr. Bagalay has also
served as General Counsel for Texas Commerce Bancshares, Houston First Financial
Group and Lower Colorado River  Authority,  a regulated  electric  utility.  Dr.
Bagalay  currently  also  serves on the  boards  of  directors  of Wave  Systems
Corporation and several  privately held  companies.  Dr. Bagalay holds a B.A. in
Politics,  Philosophy and Economics,  a Ph.D. in Political  Philosophy from Yale
University, and a J.D. from the University of Texas.

          Stephen K. Carter has served on our Board of Directors since September
1998.  Since  1997,  Dr.  Carter  has been a  consultant  to the  pharmaceutical
industry.  Dr. Carter was Senior Vice  President of Research and  Development at
Boehringer Ingelheim  Pharmaceuticals,  Inc. from 1995 to 1997. Prior to joining
Boehringer,  Dr. Carter was Senior Vice President of Worldwide Clinical Research
and Development at Bristol-Myers  Squibb Company.  From 1976 to 1982, Dr. Carter
served as Director of the Northern  California Cancer Institute.  Dr. Carter was
also  appointed  to President  Clinton's  panel for AIDS drug  development.  Dr.
Carter is a director of Allos Therapeutics and Alfacell Corporation.  Dr. Carter
received  an A.B. in History  from  Columbia  College and an M.D.  from New York
Medical College.  He completed a medical  internship and residency at Lenox Hill
Hospital.

          Robert F. Hendrickson has served on our Board of Directors since March
1995.  Since 1990, Mr.  Hendrickson has been a consultant to the  pharmaceutical
and biotechnology  industries on strategic  management and manufacturing  issues
with a number of leading biotechnology companies among his clients. Prior to his
retirement in 1990, Mr. Hendrickson was Senior Vice President, Manufacturing and
Technology for Merck & Co., Inc. He is a trustee of the Carrier Foundation, Inc.
He  previously  served on the Board of Directors of Unigene  Laboratories,  Inc.
from 1997 until June 2001, and Envirogen,  Inc. from March 1992 until June 2001.
Mr.  Hendrickson  received an A.B. degree from Harvard College and an Masters of
Business   Administration   from  the  Harvard   Graduate   School  of  Business
Administration.

         Kevin G. Lokay has served on our Board of Directors since January 2001.
Mr.   Lokay  is   currently   Vice   President,   Oncology  at   GlaxoSmithKline
Pharmaceuticals.  Prior to joining  GlaxoSmithKline  in 1997, Mr. Lokay spent 16
years with Merck & Co.,  where his most recent  assignment  was Vice  President,
Worldwide Sales,  Marketing and Development in the Merck Vaccine  Division.  Mr.
Lokay joined Merck in 1981 as a sales  representative,  and  progressed  through
numerous  positions of increasing  responsibilities  in sales,  market research,
advertising,   product  management,  and  business  development,  while  gaining
experience in a wide variety of therapeutic areas, including  antihypertensives,
antiarrythmics, antibiotics, analgesic/anti-inflammatories,  psychotherapeutics,
vaccines,  and  gastro-intestinal  products.  Mr.  Lokay  is a  director  of the
University  of  Sciences,  Philadelphia,  Pennsylvania.  He holds a  Masters  of
Business  Administration  with a  concentration  in Marketing  from the Krannert
School of Management at Purdue  University,  and a Bachelor of Arts in Economics
from Lafayette College.

         All  directors  will hold  office  until  our next  annual  meeting  of
stockholders  and until  their  successors  shall  have been  duly  elected  and
qualified.  None of our directors are related to any other director or to any of
our executive officers.

         The Board of Directors  recommends that  stockholders  vote FOR each of
the nominees for the Board of Directors.

Committees and Meetings of the Board

         Our Board of  Directors  currently  consists of James A.  Grigsby,  who
serves as Chairman of the Board, H. Joseph Reiser,  John E. Bagalay,  Stephen K.
Carter,  Robert F. Hendrickson and Kevin G. Lokay.  There were nine (9) meetings
of the Board of Directors during 2001. Each incumbent  director,  except for Mr.
Lokay  and Mr.  Hendrickson,  attended  at  least  75% of the  aggregate  of all
meetings of the Board of Directors  held during the period in which he served as
a director  and the total number of meetings  held by the  committee on which he
served during the period, if applicable.


                                       4


         There  are  currently  three  committees  of the  Board of  Directors:
the Compensation  Committee,  the Nominating Committee and the Audit and Finance
Committee.

The Compensation Committee

         The Compensation Committee currently consists of Robert F. Hendrickson,
who serves as  Chairman,  and Kevin G. Lokay.  The  Compensation  Committee  was
established   in  1986  and  held  five  (5)  meetings  in  2001.   The  primary
responsibilities   of  the  Compensation   Committee   include   overseeing  the
administration  of our stock option  plans,  recommending  compensation  for our
executive  officers  and  other key  employees  to the  Board of  Directors  and
generally reviewing our compensation policy. In addition to Messrs.  Hendrickson
and Lokay, Mr. Misrock was also served as a member of the Compensation Committee
until his resignation on July 18, 2001.

The Nominating Committee

         The Nominating  Committee  currently consists of James A. Grigsby,  who
serves  as  Chairman,  and  H.  Joseph  Reiser.  The  Nominating  Committee  was
established  in 1994  and  did not  hold  any  meetings  in  2001.  The  primary
responsibility  of the  Nominating  Committee is  investigating,  recruiting and
interviewing  potential  candidates for election to the Board of Directors.  The
Nominating Committee will consider nominees for the Board of Directors suggested
by stockholders whose names are submitted in writing to the Nominating Committee
in care of the office of our Corporate Secretary.

The Audit and Finance Committee

         The Audit  Committee  currently  consists of John E. Bagalay,  Jr., who
serves as  Chairman,  Robert F.  Hendrickson  and Stephen K.  Carter.  The Audit
Committee  was  established  in 1986 and held  five (5)  meetings  in 2001.  The
primary  responsibilities  of the Audit  Committee  include:  (i) evaluating and
recommending to our Board of Directors the engagement of our independent  public
accountants;  (ii)  reviewing  the  results  and  scope of the  audit  and other
services provided by our independent  public  accountants;  and (iii) monitoring
and consulting with the independent public accountants and management  regarding
risk  management,  the  adequacy of  financial  and  accounting  procedures  and
internal  controls on a periodic  basis.  The Audit  Committee  also reviews and
monitors our  financial  planning and  financial  structure to  accommodate  our
operating  requirements and strategic  objectives.  The  responsibilities of the
Audit Committee are more fully set forth in the Audit Committee  Charter adopted
by the Audit Committee May 16, 2000, a copy of which was filed as an Appendix to
our Proxy Statement  filed with the Securities and Exchange  Commission on April
30, 2001.

         The Nasdaq  National  Market has adopted  requirements  relating to the
independence  of  members of the audit  committees  of  companies  traded on the
market.  Our Audit Committee  members meet the requirements of that rule, except
that members may not have been  employees of the Company  within the three prior
years. Dr. Bagalay served, at the request of the Board of Directors,  as interim
Chief  Executive  Officer from January  1998  through  August 1998,  pending the
recruitment  of a permanent  CEO,  and was deemed to be an employee  during this
period.  The new rules permit one member of an audit  committee to remain on the
committee   even  if  the   independence   criteria   are  not  met  in  certain
circumstances. In accordance with these rules, our Board of Directors determined
that, given his financial  expertise and judgment,  and the brief period of time
which he  served  as an  employee  upon the  Board of  Director's  request,  Dr.
Bagalay's  continued  service on the Audit Committee is in our best interest and
in the best interests of our stockholders.

         Except as noted above,  each Audit  Committee  member is an independent
member of our Board of Directors as defined in Rule  4200(a)(14) of the National
Association of Securities Dealers' listing standards. As an independent director
of our Board of  Directors,  each  Audit  Committee  member is not an officer or
employee of the  Company or our  subsidiaries  and does not have a  relationship
which,  in the  opinion of our Board of  Directors,  would  interfere  with that
person's exercise of independent  judgement in carrying out the responsibilities
of a director.


                                       5

Report of the Audit Committee

March 28, 2002

To the Board of Directors of Cytogen Corporation:

         We have reviewed and discussed with  management  the Company's  audited
financial statements as of and for the year ended December 31, 2001.

         Management  is  responsible  for the  Company's  internal  controls and
financial  reporting  process.  The Company's  independent  public  accountants,
Arthur Andersen,  LLP ("Andersen") are responsible for performing an independent
audit  of the  Company's  financial  statements  in  accordance  with  generally
accepted  accounting  principles  and to  issue  a  report  on  those  financial
statements. As appropriate, the Audit Committee reviews, evaluates and discusses
with the  Company's  management,  internal  accounting,  financial  and auditing
personnel and Andersen, the following:

-    the plan  for,  and  Andersen's  report  on,  each  audit of the  Company's
     financial statements;

-    the  Company's  financial  disclosure  documents,  including  all financial
     statements and reports filed with the Securities and Exchange Commission or
     sent to stockholders;

-    management's  selection,  application and disclosure of critical accounting
     policies;

-    changes in the  Company's  accounting  practices,  principles,  controls or
     methodologies;

-    significant  developments or changes in accounting  rules applicable to the
     Company; and

-    the adequacy of the Company's  internal controls and accounting,  financial
     and auditing personnel.

         We have discussed with Andersen the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees,  as
amended,  by the Auditing Standards Board of the American Institute of Certified
Public  Accountants  ("SAS 61").  SAS 61 requires  Andersen to discuss  with the
Audit Committee, among other things, the following:

-    methods to account for significant unusual transactions;

-    the effect of significant  accounting policies in controversial or emerging
     areas for which there is a lack of authoritative guidance or consensus;

-    the  process  used by  management  in  formulating  particularly  sensitive
     accounting estimates and the basis for Andersen's conclusions regarding the
     reasonableness of those estimates; and

-    disagreements   with   management   over  the   application  of  accounting
     principles,  the  basis  for  management's  accounting  estimates  and  the
     disclosures in the financial statements.

         We have received,  reviewed and discussed the written  disclosures  and
the letter from Andersen  required by Independence  Standard No. 1, Independence
Discussions with Audit  Committees,  as amended,  by the Independence  Standards
Board  ("Independence  Standards Board Standard No. 1"), and have discussed with
Andersen their independence.

         We have considered whether the non audit services provided by Andersen,
as set forth in the section of our Proxy Statement entitled, "Independent Public
Accountant Fees and Other Matters",  are compatible with maintaining  Andersen's
independence.  Independence  Standards  Board  Standard No. 1 requires  auditors
annually  to  disclose  in  writing  all  relationships  that  in the  auditor's
professional opinion may be reasonably thought to bear on independence,  confirm
their perceived independence and engage in a discussion of independence.

         Furthermore,  we have received  representations from Andersen that: (i)
the audit conducted by Andersen was subject to Anderson's quality system for the
U.S.  accounting and auditing practice to provide reasonable  assurance that the
engagement was in compliance  with  professional  standards;  and (ii) there was
appropriate  continuity  of  Andersen  personnel  working  on the  audit and the
availability of national office consultation to conduct the relevant portions of
the audit.


                                       6


         Based on the reviews and discussions referred to above, we recommend to
the  Board of  Directors  that the  financial  statements  referred  to above be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2001.

/s/ John E. Bagalay, Jr.
John E. Bagalay, Jr.
Audit Committee Chairman

/s/ Stephen K. Carter
Stephen K. Carter
Audit Committee Member

/s/ Robert F. Hendrickson
Robert F. Hendrickson
Audit Committee Member

Independent Public Accountants Fees and Other Matters

Audit Fees

         Andersen  billed us an  aggregate  of $96,250 in fees for  professional
services  rendered in connection with the audit of our financial  statements for
the most recent fiscal year and the reviews of the financial statements included
in each of our  Quarterly  Reports on Form 10-Q  during  the  fiscal  year ended
December 31, 2001.

Financial Information Systems Design and Implementation Fees

         Andersen  did  not  perform  any  professional  services  for us or our
affiliates  for the fiscal  year ended  December  31,  2001 in  connection  with
financial  information  systems design or  implementation,  the operation of our
information system or the management of our local area network.

All Other Fees

         Andersen  billed us $83,575 for other  services  rendered  for the most
recent fiscal year.

Directors' Compensation

         Each of our  non-employee  directors  receives  an annual  retainer  of
$12,000,  plus $1,500 for each board meeting  attended ($500 if participation is
by  telephone).  Any  non-employee  director  who also chairs a board  committee
receives an additional annual fee of $2,000. Non-employee directors receive $500
for each  committee  meeting  attended,  but receive no additional  retainer for
committee  membership.  Members of the  Nominating  Committee do not receive any
compensation  for serving on that  committee.  The Chairman of the Board (who is
not an employee of the Company) currently receives,  based upon significant time
spent on Company  business,  an  additional  annual  retainer  of  $50,000.  The
additional  retainer  contemplates  four days per month  substantially  given to
Company  business  by the  Chairman.  An amount of $1,500 per day is paid to the
Chairman for additional days in which the significant part of the day is devoted
to Company  matters.  During 2001,  the  Chairman  received  $50,000  under this
arrangement.  In  addition,  the  Chairman  was paid $12,500 in fees during 2001
relating to services to be performed in 2002.

                                       7


         Pursuant to the Director Plan, each  non-employee  director receives an
initial grant of options on the date of appointment  equal to a pro-rata portion
of 20,000 shares of our common stock,  based upon the number of months remaining
from the date of election until the one year anniversary of the preceding annual
meeting.  In  addition,  on  the  day  following  each  annual  meeting  of  the
stockholders,  each  individual who is elected as a non-employee  director shall
automatically  be granted options to purchase 10,000 shares of our common stock.
The  Chairman  of  the  Board,  unless  the  Compensation  Committee  determines
otherwise,  receives an additional grant of 15,000 options to purchase shares of
our common stock on the date of each annual  meeting.  Options granted under the
Director  Plan are  exercisable  at a price equal to the average of the high and
low sale prices of the common stock as reported on the Nasdaq National Market on
the date of grant and vest in full (i.e., first become exercisable) at the first
anniversary of the option grant date. Each director's  outstanding  options also
become  immediately  exercisable in full: (i) upon the occurrence of a change of
control of the Company; (ii) upon death or disability; or (iii) upon resignation
or retirement after age 55.

         In  addition,   at  the  2001  Annual  Meeting  of  Stockholders,   our
stockholders  adopted a proposal  to amend the  Director  Plan to  provide  that
non-employee directors shall receive, at the sole discretion of and after formal
action by our Board of Directors,  such number of shares of common stock that is
equal to each such director's cash compensation (including,  but not limited to,
annual service fees, fees payable for board and committee  meetings attended and
fees for committees chaired), (the "Cash Component"), divided by the fair market
value of our  common  stock  as of the date of  issuance  of such  shares,  (the
"Compensation  Shares"),  which date shall be no earlier  than the date on which
the  applicable  Cash  Component  compensation  becomes  due and  payable by us.
Compensation  Shares  shall not be issued for  services not yet rendered by such
directors to the Company.  Such  amendments to the Director Plan further provide
that in the event the board elects to issue Compensation  Shares,  such eligible
directors  shall receive  Compensation  Shares until,  absent  additional  board
action,  at least such time as: (i) such director owns twenty thousand  (20,000)
shares of our common stock,  excluding options or other rights to acquire shares
of our common stock, whether exercisable or unexercisable; or (ii) if fewer than
20,000  shares are so owned,  such  smaller  number of shares has a fair  market
value of in excess of one hundred  thousand  dollars  ($100,000),  excluding the
value,  if any, of options to purchase  common  stock,  whether  exercisable  or
unexercisable,  or other  rights to acquire  our common  stock.  Upon  achieving
either of such  milestones (i) or (ii) above,  each such director may, at his or
her option,  elect to cease  receiving his or her Cash  Component to which he or
she is entitled in shares of our common stock under the Director Plan; provided,
however,  that such director must make such election by providing notice of such
election to us in a timely manner.  In October 2001, our Board of Directors took
appropriate  actions to  implement  the  payment  of  director  compensation  in
Compensation Shares.

         Each  option  provided  for in  the  Director  Plan  shall  be  granted
automatically  and without  further  action by us, our Board of Directors or our
stockholders.  Promptly  after the date of grant of each option  provided for in
the  Director  Plan,  we shall  cause an option  agreement  to be  executed  and
delivered  to the holder of the option.  No other  options may be granted at any
time under the Director Plan.

         We have prepared an amendment to the Director  Plan that  restricts our
ability,  without the approval of a majority of our  stockholders,  to (a) grant
stock  appreciation  rights  with an  exercise  price that is less than the fair
market value of the underlying common stock; or (b) effectively amend or replace
certain  outstanding  equity-based awards in a manner that would result in lower
exercise  prices,  accelerated  vesting  schedules or the issuance of restricted
stock, as more fully set forth under the heading "PROPOSED AMENDMENT TO THE 1999
NON-EMPLOYEE  DIRECTOR  STOCK  OPTION  PLAN,  THE  1995  STOCK  OPTION  PLAN AND
BY-LAWS."


                                       8



                      EXECUTIVE OFFICERS AND KEY EMPLOYEES

         Our current executive  officers and their respective ages and positions
with us are as follows:



                                                             Capacities In                       In Current
             Name                      Age                   Which Served                      Position Since
-----------------------------          ---       -----------------------------------    ----------------------------
                                                                               
H. Joseph Reiser, Ph.D(1)....          55        Director, President and Chief          August 1998
                                                 Executive Officer

Michael D. Becker............          33        Vice President and Investor            April 2001
                                                 Relations Officer of Cytogen           (Interim Chief Executive
                                                 Corporation; Interim Chief Executive   Officer of AxCell
                                                 Officer of AxCell BioSciences          Biosciences Corporation
                                                 Corporation                            since January 2002)

William F. Goeckeler.........          47        Vice President of Research and         June 2001
                                                 Development                            (Director, Pharmaceutical
                                                                                        Development since
                                                                                        June 1997)

Lawrence R. Hoffman..........          47        Vice President, Chief Financial        July 2000
                                                 Officer

Deborah A. Kaminsky..........          47        Vice President of Sales and Marketing  June 2001
                                                                                        (Director of Marketing
                                                                                        since December 2000)


(1)  Mr.  Reiser's  biographical  information  appears  above,  see "ELECTION OF
     DIRECTORS".



         Michael  D.  Becker  joined  Cytogen  as Vice  President  and  Investor
Relations  Officer  in April  2001.  He has served as  Interim  Chief  Executive
Officer and a Director of our subsidiary, AxCell BioSciences Corporation,  since
January  2002.  Mr.  Becker  has  spent  more than a decade  as an  analyst  and
commentator for the biotechnology industry. From July 1996 to April 2001, he was
with Wayne Hummer  Investments  LLC, a  Chicago-based  regional  brokerage firm,
where he held senior positions as a biotechnology analyst,  investment executive
and portfolio  manager.  From October 1998 to April 2001, Mr. Becker also served
on the Board of Directors for the Chicago  Biotech  Network,  a nonprofit  trade
association for the biotechnology  industry in Illinois. In addition, he was the
founder  and editor of "Beck on  Biotech",  a monthly  biotechnology  investment
newsletter.  Mr. Becker is currently a member of the National Investor Relations
Institute (NIRI). Mr. Becker attended DePaul University in Chicago, Illinois.

         William F.  Goeckeler  was  promoted to Vice  President of Research and
Development  in June 2001.  He joined  Cytogen in March of 1994 as the Assistant
Director,  Pharmaceutical  Development.  In 1995 he was  promoted  to  Associate
Director,  Technical  Support  Operations  and in June 1997 became our Director,
Pharmaceutical  Development,  a position he held until June 2001. Before joining
us, Dr. Goeckeler spent nine years as a scientist in the Bioproducts  Laboratory
of Central Research and Development at The Dow Chemical  Company.  Dr. Goeckeler
did his  undergraduate  and graduate work at the University of Missouri where he
received his Ph.D. in Radiochemistry for research that involved the discovery of
Quadramet.

          Lawrence R.  Hoffman  joined  Cytogen  as  Vice  President  and  Chief
Financial  Officer  in July 2000.  He is  responsible  for all of our  financial
reporting and controls.  Mr.  Hoffman was  previously  Vice  President and Chief
Financial  Officer of The Liposome  Company from April 1998 to June 2000,  which
was acquired by Elan  Corporation plc in May 2000. Prior to joining The Liposome
Company, Mr. Hoffman was Vice President and Chief Financial Officer of IGI, Inc.
From April 1988 through July 1997, Mr. Hoffman held various positions  including
Treasurer,   Secretary  and  Acting  Principal   Financial  Officer  for  Sybron

                                       9

Chemicals,  Inc. Mr. Hoffman  received a Bachelor of Science in Accounting  from
LaSalle  University,  a Juris Doctor from Temple University School of Law and an
L.L.M. in Taxation from Villanova University.

         Deborah A. Kaminsky,  D.Ph. was promoted to Vice President of Sales
and Marketing in June 2001.  She joined  Cytogen in December 2000 as Director of
Marketing.  Prior to joining  Cytogen,  Dr. Kaminsky spent two years with Imagyn
Medical  Technologies  as  Vice  President  of  Clinical   Development,   having
previously spent more than a decade at Syncor  International  Corporation  where
she held positions of increasing responsibility ranging from pharmacy management
to business  development  and  president  of a Syncor  subsidiary.  She received
academic  degrees from the University of Oklahoma Health Sciences Center College
of Pharmacy  and the  Kellogg  Graduate  School of  Management  at  Northwestern
University,  is licensed as a Doctor of Pharmacy in  Oklahoma,  and received the
designation of Authorized  Nuclear Pharmacist (ANP) by the United States Nuclear
Regulatory Commission.



         The  current  key  employees  of  our  subsidiary,  AxCell  BioSciences
Corporation, are as follows:



                                                          Capacities In                    In Current
             Name                     Age                 Which Served                   Position Since
-----------------------------         ---        -------------------------------       ------------------
                                                                                  
John D. Rodwell, Ph.D........          55        President and Chief Technical             June 1999
                                                 Officer

Michael D. Becker(1).........          33        Interim Chief Executive Officer           January 2002



(1) Mr. Becker's biographical information appears above, see "EXECUTIVE OFFICERS
    AND KEY EMPLOYEES".


         John D.  Rodwell,  Ph.D.,  President  and Chief  Technical  Officer  of
AxCell,  joined  Cytogen in  September  1981.  He served as  Director,  Chemical
Research, then as Vice President,  Discovery Research from 1984 to 1989, as Vice
President,  Research and Development  from 1989 to July 1996, and as Senior Vice
President  and Chief  Scientific  Officer from July 1996  through June 1999,  at
which time he assumed full time duties as Acting  President and Chief  Technical
Officer of AxCell and  subsequently  became  President  of AxCell.  From 1980 to
1981, Dr. Rodwell was a Research Assistant  Professor and, from 1976 to 1980, he
was a  postdoctoral  fellow,  both  in the  Department  of  Microbiology  at the
University of Pennsylvania School of Medicine,  where he currently is an Adjunct
Associate  Professor in the Department of  Microbiology.  He holds a Bachelor of
Arts in Chemistry from the University of Massachusetts,  a Masters of Science in
Organic   Chemistry  from  Lowell   Technological   Institute  and  a  Ph.D.  in
Biochemistry from the University of California at Los Angeles.

         None of our or AxCell's  executive officers or key employees is related
to any other of our or AxCell's executive officers, key employees, or directors.
Our executive  officers are elected annually by the Board of Directors and serve
until their  successors are duly elected and  qualified.  AxCell's key employees
are elected annually by AxCell's board and serve until their successors are duly
elected and qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires our directors,  officers and  stockholders,  who  beneficially own more
than 10% of any class of our equity securities registered pursuant to Section 12
of the Exchange Act, to file initial reports of ownership and reports of changes
in  ownership  with respect to our equity  securities  with the  Securities  and
Exchange  Commission.  All reporting  persons are required by SEC  regulation to
furnish us with copies of all reports that such reporting  persons file with the
SEC pursuant to Section 16(a).

         Based  solely on our review of the copies of such forms  received by us
and upon written representations of the reporting persons received by us, except
as described below, each such reporting person has filed all of their respective
reports pursuant to Section 16(a) on a timely basis.


                                       10



         Robert F.  Hendrickson  failed to timely  file a Form 4 relating to his
exercise  and  subsequent  acquisition  of 10,000  shares of our common stock on
November 9, 2001. Mr.  Hendrickson  filed such Form 4 with the SEC on January 4,
2002.




                                       11



                             EXECUTIVE COMPENSATION

Summary of Compensation in Fiscal 2001, 2000 and 1999

         The  following  Summary   Compensation  Table  sets  forth  information
concerning  compensation for services in all capacities awarded to, earned by or
paid to each person who served as our Chief Executive Officer at any time during
2001, and our or AxCell's four most highly compensated  executive officers other
than the Chief  Executive  Officer who were serving at the end of 2001 and whose
aggregate cash compensation  exceeded $100,000 at the end of 2001  (collectively
referred to as the "Named Executives") during the years ended December 31, 2001,
2000 and 1999.



                                                      SUMMARY COMPENSATION TABLE

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Long-Term
                                                          Annual Compensation (1)                 Compensation
                                              ---------------------------------------------           Awards
                                                                                 Other              Securities
  Name and Principal Position                                                    Annual             Underlying         All Other
                                    Year         Salary        Bonus(2)      Compensation(3)         Options        Compensation(4)
                                                   ($)           ($)               ($)                  (#)               ($)
              (a)                   (b)            (c)           (d)               (e)                  (g)               (i)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
H. Joseph Reiser .............      2001         314,423       100,000          169,663              100,000             6,412
     President and Chief            2000         299,038        84,000          216,927              100,000             5,959
     Executive Officer              1999         275,000        80,000               --                   --             7,005

John D. Rodwell(5)............      2001         194,631        26,907               --                   --             5,802
     President and Chief            2000         185,192        37,038               --                   --             5,471
     Technical Officer of AxCell    1999         182,654        14,400               --                   --             8,610


William F. Goeckeler(6).......      2001         157,450        26,755               --               66,390             5,282
     Vice President of
     Research and Development

Lawrence R. Hoffman...........      2001         219,423        45,311               --               45,500             5,393
     Vice President and Chief       2000          90,673        40,000               --              550,000               129
     Financial Officer

Catherine M. Verna(7).........      2001         144,808        27,474               --               27,300             4,989
     Vice President, General        2000          91,000        18,200               --               80,000             2,794
     Counsel and Corporate
     Secretary


(1)  Certain  perquisites or personal  benefits are not included  herein because
     they did not  exceed,  in the case of each Named  Executive,  the lesser of
     either  $50,000 or 10% of total  annual  salary and bonus  reported for the
     Named Executives.

(2)  The amounts disclosed in this column include bonus payments made to each of
     the Named  Executives both in cash and in shares of our common stock.  Such
     payments made in shares of common stock were based upon a fair market value
     of $3.01 per share of such common  stock on December  31,  2001.  In fiscal
     year 2001,  the dollar  value of such bonus  amounts  paid in shares of our
     common stock were as follows: Dr. Rodwell, $12,046; Dr. Goeckeler, $11,978;
     Mr. Hoffman, $20,286; and Ms. Verna, $12,300.


                                       12



(3)  The amounts disclosed in this column consist of relocation expenses.

(4)  The amounts disclosed in this column include amounts contributed or accrued
     by us in the  respective  fiscal  years under our Savings  Plan,  a defined
     contribution  plan which consists of a 401(K)  portion and a  discretionary
     contribution  portion.  In fiscal year 2001, these amounts were as follows:
     on behalf of Dr.  Reiser,  $5,100;  Dr.  Rodwell,  $5,100;  Dr.  Goeckeler,
     $5,100; Mr. Hoffman,  $5,100; and Ms. Verna,  $4,891. The amounts disclosed
     also include  insurance  premiums paid by the Company with respect to group
     term life  insurance  and with  respect to fiscal  year 2001.  They were as
     follows: on behalf of Dr. Reiser, $1,312; Dr. Rodwell, $702; Dr. Goeckeler,
     $182; Mr. Hoffman, $293; and Ms. Verna, $98.

(5)  Dr. Rodwell also received  options to purchase 150,000 shares of the common
     stock of our subsidiary  company,  AxCell Biosciences  Corporation,  during
     2001.

(6)  Dr.  Goeckeler  received  40,000  options to purchase  shares of our common
     stock upon his promotion to Vice  President,  Research and  Development  in
     June 2001.

(7)  Ms. Verna resigned from her positions with us effective February 28, 2002.


                                       13

Option Grants in 2001

         The following table sets forth information concerning individual grants
of stock options made during 2001 to each of the Named Executives.



                                               OPTION GRANTS IN LAST FISCAL YEAR

----------------------------------------------------------------------------------------------------------------------
                                     Individual Grants

----------------------------------------------------------------------------------------------------------------------
                                                                                                 Potential Realizable
                                                  Percent of                                            Value at
                                   Number of        Total                                        Assumed Annual Rates
                                   Securities      Options                                             of Stock
                                   Underlying     Granted to                                   Price Appreciation for
                                    Options       Employees     Exercise or                        Option Term (3)
                                    Granted       in Fiscal      Base Price     Expiration  --------------------------
             Name                     (#)          Year(1)      ($/share)(2)       Date
              (a)                     (b)            (c)            (d)            (e)          5% ($)       10%($)
                                                                                                 (f)           (g)
----------------------------------------------------------------------------------------------------------------------

                                                                                            
H. Joseph Reiser.............        100,000          13.38          3.49         12/18/11      219,484       556,216

John D. Rodwell(4)...........             --            --            --               --            --            --

William F. Goeckeler.........         40,000           5.35          4.96         06/04/11      124,773       316,199
                                      26,390           3.53          3.49         12/18/11       57,922       146,785

Lawrence R. Hoffman..........         45,500           6.09          3.49         12/18/11       99,865       253,078

Catherine M. Verna(5)........         27,300           3.65          3.49         05/29/02           --            --


-----------

(1)  Based on an  aggregate  of 747,360  options  granted to  employees in 2001,
     including options granted to Named Executives.

(2)  The exercise price of all stock options granted during the last fiscal year
     is equal to the average of the high and low sale prices of our common stock
     as  reported  on the Nasdaq  National  Market on the  respective  dates the
     options were granted.  Options granted to executive officers generally vest
     over  three  years at the rate of 33.3%  per year  beginning  on the  first
     anniversary  of the date of grant,  subject to  acceleration  under certain
     conditions.  The maximum term of each option  granted is ten years from the
     date of grant.

(3)  These amounts represent certain assumed rates of appreciation  only. Actual
     gains,  if any, on stock option  exercises  and common  stock  holdings are
     dependent on the future  performance  of our common stock and overall stock
     market conditions. There is no assurance that the amounts reflected will be
     realized.

(4)  Mr. Rodwell  received options to purchase 150,000 shares of common stock of
     our subsidiary company, AxCell Biosciences  Corporation,  during 2001, with
     an  exercise  price  ranging  from $1.25 to $4.63 per share.  Such  options
     represent 34% of the total number of options  granted to purchase shares of
     AxCell's  common stock in 2001 and will expire  beginning in September 2010
     to December 2011.

(5)  Ms. Verna resigned from her positions with us effective  February 28, 2002.
     The options  granted to Ms. Verna during 2001 will expire within 90 days of
     the date of her  termination  of employment  with us, or May 28, 2002,  and
     were not, nor will such options be, vested as of such date.



                                       14



Aggregated Option Exercises in 2001 and Year End Option Values

         The following table sets forth information  concerning each exercise of
options  during 2001 by each of the Named  Executives  and the year end value of
unexercised in-the-money options.



                                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                        AND FISCAL YEAR END OPTION VALUES

-------------------------------------------------------------------------------------------------------------------------
                                                                               Number of                   Value of
                                                                         Securities Underlying           Unexercised
                                                                              Unexercised                In-the-Money
                                                                               Options at                 Options at
                                        Shares                                   Fiscal                     Fiscal
                                       Acquired                                 Year-End                 Year-End(1)
                                          on              Value                   (#)                        ($)
                                       Exercise         Realized              Exercisable/               Exercisable/
               Name                      (#)               ($)               Unexercisable              Unexercisable
                (a)                      (b)               (c)                    (d)                        (e)
-------------------------------------------------------------------------------------------------------------------------

                                                                                        
H. Joseph Reiser................        15,000           47,332           1,393,334 / 991,666       2,609,618 / 1,587,847

John D. Rodwell.................        15,000           30,255               379,500 / 0                122,066 / 0

William F. Goeckeler............          -                 -               43,465 / 77,790             30,526 / 1,743

Lawrence R. Hoffman.............          -                 -              183,334 / 412,166            1,725 / 3,450

Catherine M. Verna(2)...........          -                 -               26,667 / 80,633             1,035 / 2,070


----------

(1)  The  dollar  values in this  column  were  calculated  by  determining  the
     difference between the fair market value of our common stock underlying the
     options at fiscal year end of $3.01 per share,  and the  exercise  price of
     the options.

(2)  Ms. Verna resigned from her positions with us effective February 28, 2002.



                                       15



Equity Compensation Plans

         The  following   table  provides   information   about  the  securities
authorized for issuance under our equity  compensation  plans as of December 31,
2001.


-------------------------------------------------------------------------------------------------------------------
                                               Number of                                  Number of securities
                                           securities to be                             remaining available for
                                              issued upon         Weighted-average       future issuance under
                                              exercise of        exercise price of         equity compensation
                                              outstanding            outstanding             plans (excluding
                                           options, warrants     options, warrants       securities reflected in
           Plan Category(1)(2)                and rights             and rights                column (a))
                                                  (a)                   (b)                         (c)(3)
-------------------------------------------------------------------------------------------------------------------
                                                                                      
(i)  Equity compensation plans
     approved by security holders:

     Option Plans(4)..................          2,582,481              $3.94                     1,136,407
     Employee Stock Purchase
     Plan(5)..........................              --                   --                       355,497

(ii) Equity compensation plans not
     approved by
     security holders.................         2,423,630               $2.27                      70,000

Total.................................         5,006,111               $3.13                     1,561,904


----------

(1)  Does not  include  information  related  to the  stock  option  plan of our
     subsidiary,  AxCell Biosciences  Corporation,  pursuant to which AxCell may
     issue options to purchase  shares of AxCell's common stock to employees and
     consultants  of  AxCell.   Additional   information  regarding  the  AxCell
     Biosciences  Corporation Stock Option Plan is contained in Footnote (12) to
     the Notes to Consolidated  Financial  Statements of Cytogen Corporation and
     Subsidiaries  in our  Annual  Report  on Form  10-K  for the  period  ended
     December 31, 2001, as filed with the Securities and Exchange  Commission on
     March 28, 2002.

(2)  This table  excludes an  aggregate  of 472,157  shares of our common  stock
     issuable under our Cytogen Retirement Savings Plan and Cytogen  Corporation
     Performance Bonus Plan with Stock Payment Program.

(3)  In addition to being  available  for future  issuance  upon the exercise of
     options that may be granted after December 31, 2001,  all shares  available
     for  issuance  under our 1999  Non-Employee  Director  Plan may  instead be
     issued  outright to eligible  directors  thereunder in payment for services
     rendered to us.

(4)  Includes information  regarding the following  stockholder-approved  equity
     compensation plans: (i) 1988 Non-Employee Director Plan; (ii) 1989 Employee
     Stock Option  Plan;  (iii) 1989 Outside  Consultant  Plan;  (iv) 1992 Stock
     Option  Plan;  (v) 1995  Stock  Option  Plan;  and (vi)  1999  Non-Employee
     Director Plan.

                                       16

(5)  Includes  355,497  shares of common stock issuable under our Employee Stock
     Purchase  Plan,  under  which up to 2,826  shares of our common  stock were
     issuable in connection with the offering period which ended on December 31,
     2001.

Equity Compensation Plans Not Approved by Security Holders:

          The  following   describes   the  material   features  of  our  equity
compensation  plans that have not been approved by our security holders,  as set
forth in the above table.

          We have  issued  options to  purchase  2,050,000  shares of our common
stock  issued  outside  of any of our  equity  compensation  plans to H.  Joseph
Reiser, our President and Chief Executive Officer,  upon his commencement of his
employment with us in August 1998. Such options:  (i) vest from time to time and
pursuant to the achievement of certain  milestones  within the discretion of our
Board of  Directors;  (ii) have an exercise  price of $1.0937  per share;  (iii)
terminate on August 18, 2008; and (iv) are subject to equitable  adjustment upon
the occurrence of certain reorganizations,  recapitalizations or similar events.
We have also  issued  options to  purchase  300,000  shares of our common  stock
outside of any of our equity compensation plans to Lawrence R. Hoffman, our Vice
President and Chief Financial  Officer,  upon the commencement of his employment
with us in July 2000. Such options were granted on July 10, 2000 and vest at the
rate of 33.3% per year beginning on the first  anniversary of the date of grant.
Such options have an exercise price of $10.141 per share,  terminate on July 10,
2010 and are subject to  equitable  adjustment  upon the  occurrence  of certain
reorganizations, recapitalizations or similar events.

          Additionally  we have issued options to purchase  10,000 shares of our
common stock  issued  outside any of our equity  compensation  plans to Kevin G.
Lokay,  upon his  appointment  to our Board of Directors in January  2001.  Such
options have an exercise  price of $6.126 per share,  expire on January 17, 2011
and vested in full on January  17,  2002.  Such  options are subject to the same
equitable  adjustment as are our outstanding  shares of common stock and are not
afforded anti-dilution protection.

          We have also issued an aggregate of 63,630 warrants to purchase shares
of our  common  stock to various  persons  and  entities  in  consideration  for
services  rendered by such persons or entities.  Such  warrants  have a weighted
average  exercise price of $2.27 per share and expire from time to time over the
next three years. All such warrants are immediately exercisable.

          We are  contractually  obligated  to issue  warrants  to  purchase  an
additional  70,000  shares of our common stock to the SCO Group over the next 10
months, which warrants are in consideration for certain services provided by SCO
to us and in addition to warrants to purchase  14,000 shares of our common stock
previously  so  issued to SCO and which  are  included  in the above  referenced
warrants.  Such warrants shall be issued at the beginning of each month, have an
exercise  price equal to 50% above our closing  stock price on the last business
day of the preceeding month and will expire three years from the date of grant.


                                       17

Employment   Contracts,   Termination   of  Employment   and   Change-in-Control
Arrangements


         We have executed indemnification  agreements with each of our executive
officers  and  directors  pursuant  to which we have  agreed to  indemnify  such
parties to the full extent permitted by law, subject to certain  exceptions,  if
any such party  becomes  subject to an action  because such party is a director,
officer,  employee, agent or fiduciary of the Company. In general, our employees
are covered by confidentiality agreements.

         We entered into an employment  agreement with H. Joseph Reiser,  Ph.D.,
our  President  and Chief  Executive  Officer,  which  provides  for bonuses and
vesting of options  for the  purchase  of shares of our  common  stock  based on
continued employment and on the achievement of performance objectives defined by
our Board of Directors.  Dr. Reiser is also entitled to one year's severance pay
equal to his base salary, along with medical and insurance benefits for the same
period, if he is dismissed for reasons other than cause.

         We have  also  entered  into  Executive  Change  of  Control  Severance
Agreements with each of Messrs. Becker,  Goeckeler and Hoffman and Ms. Kaminsky,
which  provide,  generally,  for the payment of twelve  months' base  salary,  a
pro-rata portion of such officer's bonus  compensation,  the continuation of all
benefits,  reasonable  Company-paid  outplacement  assistance  and certain other
accrued rights, in the event such officer's  employment with us is terminated in
connection with a change in control as set forth therein.

Compensation Committee Interlocks And Insider Participation

         During  2001,  our  Compensation   Committee  consisted  of  Robert  F.
Hendrickson, who served as Chairman, Kevin G. Lokay and S. Leslie Misrock (until
Mr.  Misrock  resigned July 18, 2001).  There are no, and during 2001 there were
no,  Compensation  Committee  interlocks.  In  June  1999,  we  entered  into an
agreement  with  S.  Leslie  Misrock,   and  others,  to  reacquire  rights  for
immunotherapy to our PSMA technology by acquiring Prostagen,  Inc., of which Mr.
Misrock  was a  principal  holder.  Mr.  Misrock  was  elected  to our  Board of
Directors in August 1999. In connection  with the  acquisition,  Mr. Misrock and
other shareholders of Prostagen received shares of our common stock. We may also
issue additional shares upon completion of certain  milestones,  including up to
450,000  shares of our common stock upon the  satisfactory  termination of lease
obligations  assumed in the  acquisition;  up to 500,000  shares of common stock
upon beneficial  resolution of other  contractual  arrangements  entered into by
Prostagen;  and up to an  additional  $4.0 million in shares of our common stock
(calculated  at the time of issuance) if certain  milestones are achieved in our
dendritic  cell  therapy  and  PSMA  development   programs.  We  are  currently
determining whether the initial $2.0 million milestone has been met in the first
quarter of 2002 based on the  progress of the  dendritic  cell  prostate  cancer
clinical  trials  being  conducted  by  Northwest  Biotherapeutics  Inc.  (NWBT,
NASDAQ).

         In addition,  Mr.  Misrock,  until his death,  was a senior  partner at
Pennie  and  Edmonds,  a New York  based  intellectual  property  law firm  that
represents us in certain intellectual property matters.


                                       18



Performance Graph

         The following graph compares the cumulative total stockholder return on
our common stock with the cumulative  total return on the Nasdaq Composite Index
and the Nasdaq  Pharmaceutical Index  (capitalization  weighted) for a five year
period (January 1, 1997 through December 31, 2001).

                 COMPARISON OF CUMULATIVE TOTAL RETURN(1)(2)(3)

              Among the Company, the Nasdaq Composite Index and the
                           Nasdaq Pharmaceutical Index
                            (Capitalization Weighted)








                            [LINE GRAPH APPEARS HERE]








                              Base
                             Period
        Company/            January      December   December     December    December     December
       Index Name           1, 1997        1997        1998        1999         2000        2001
---------------------      ---------    --------    --------     --------    --------     --------
                                                                         
CYTO.................         $100        $29.55      $15.35       $47.16      $42.62       $54.73
NASDAQ...............         $100       $122.48     $172.70      $320.82     $193.00      $153.15
NASDAQ PHAR..........         $100       $103.05     $130.81      $246.64     $307.65      $262.19


-----------


(1)  Graph  assumes $100  invested on January 1, 1997 in our common  stock,  the
     Nasdaq Composite Index and the Nasdaq  Pharmaceutical Index (capitalization
     weighted).

(2)      Total return assumes reinvestment of dividends.

(3)      Year ended December 31.



                                       19

Report of the Compensation Committee of the Board of Directors

Policy

         The Compensation Committee of the Board of Directors is responsible for
oversight of our executive  compensation program. The Compensation  Committee is
composed  entirely of  independent,  non-employee  directors.  The  Compensation
Committee makes  recommendations  to the full Board of Directors on compensation
policy and as to specific compensation actions,  except where independent action
by the Compensation Committee is appropriate.

         Our compensation  program,  both for our executive  officers as well as
for all  employees,  is  based  on the  philosophy  that  the  interests  of the
employees  should be closely  aligned with those of our  stockholders.  Our 2001
executive compensation program was based on the following principles:

-    compensation  opportunities  should attract the best talent to us, motivate
     individuals  to  perform  at  their  highest  levels,   reward  outstanding
     achievement,  and retain the leadership  and skills  necessary for building
     long-term stockholder value;

-    a portion of total compensation should be at risk of performance; and

-    individual  executives  should be encouraged to manage from the perspective
     of owners of the Company.

         Our 2001 compensation  program  reflected the Compensation  Committee's
assessment  as to  appropriate  treatment on an  individual  basis for the Chief
Executive  Officer  and the other  Named  Executives  compared to the prior year
levels.  We target our overall  compensation  program at the median level of the
biotechnology industry. In addition,  compensation for the Named Executives (and
other   executives),   including   our  CEO,   took  into   account   individual
responsibility and performance as assessed by the Compensation Committee.

         The  compensation  program  includes a combination of competitive  base
salary and benefits,  annual cash bonus  opportunities  and stock option awards.
The 2001  executive  compensation  program and a specific  discussion  as to the
compensation of the CEO are set out below.

Annual Compensation for 2001

         Generally,   annual   compensation  of  executive  officers  under  the
executive   compensation   program  for  2001  consisted  of  salary  and  bonus
components.

Base Salary

         In  December   2000,   the   Compensation   Committee   determined  for
recommendation  to the  full  Board  of  Directors,  base  salaries  and  annual
incentive  opportunities for 2001 for our executives,  including the CEO and the
other Named Executives.

Bonus

         A portion of 2001 executive officer annual compensation opportunity was
based  on  corporate  performance.  The  Compensation  Committee  believes  that
incentive  compensation  should be linked to  corporate  financial  results  and
corporate  goals.  Bonus  opportunity  levels for 2001  performance  were set in
advance of the year at a percentage of base salary, with the total amount of the
bonus  opportunity  dependent on the extent to which  corporate  objectives were
achieved and the amount of cash  available  as  determined  by the  Compensation
Committee.  At year-end,  the  Compensation  Committee  determined the extent to
which our financial and corporate  objectives  had been achieved and applied the
appropriate  bonus percentage to the respective base salary of each of the Named
Executives. The amounts approved on the Compensation Committee's recommendations
were less than target amounts. We issued to each of Mr. Rodwell,  Mr. Goeckeler,
Mr. Hoffman and Ms. Verna,  4,937,  4,909,  8,314 and 5,041 registered shares of
our common stock,  respectively,  as part of each such  individual's  2001 bonus
compensation.


                                       20



Long Term Compensation - Stock Options

         The  Compensation   Committee   believes  that  stock  options  are  an
appropriate   means  to  link  our  employees'   interests  with  those  of  our
stockholders.  Stock  option  awards are designed  primarily  to provide  strong
incentives for superior longer-term performance and continued retention. Because
the  Compensation  Committee  believes that corporate  performance is one of the
principal factors influencing the market value of our common stock, the granting
of stock options to our executive  officers  encourages  them to work to achieve
consistent improvements in corporate performance. Options only have value to the
recipient when the price of our common stock exceeds the exercise  price,  which
is not less than the fair market value of our common stock at the date of grant.

         Option  grants are set taking into account the  comparison of practices
at peer groups,  an  individual's  level of  responsibility  and  furtherance of
corporate objectives,  and the amount and terms of past stock option awards. The
Compensation Committee also took into account in its review of option grants the
fact that we have no other  long  term  incentive  program,  and  believes  that
options are important to retain  executives and promote steps to build long term
value.

Compensation of the Chief Executive Officer

         Dr.  Reiser's  salary  for  2001 was set on the  recommendation  of the
Compensation  Committee  and was  believed  to be an  appropriate  level of base
compensation in view of compensation levels paid by the industry, in view of Dr.
Reiser's experience,  and considering our continuing  accomplishments  under his
leadership  during the year.  The year end bonus in the amount of  $100,000  was
based  on  the  Compensation  Committee's  judgment  as to  achievement  of  his
objectives  compared to a target  amount set by the  Compensation  Committee  in
advance  of the year.  During  2001,  Dr.  Reiser's  salary  was  $315,000.  The
Committee has approved an increase of $10,000 to $325,000 for 2002.

Federal Income Tax Considerations

         Section 162(m) of the Internal Revenue Code of 1986, as amended, or the
"Code,"  generally  disallows a federal income tax deduction to public companies
for certain compensation over $1 million paid to its chief executive officer and
four other most highly compensated  executive  officers.  Certain  compensation,
including  compensation  based on  performance,  is not subject to this limit if
certain  conditions  are  met,  primarily,  that  the  compensation  is based on
objective  performance  criteria  approved  by  stockholders.  The  compensation
payments  must also be made  pursuant to a plan  administered  by a committee of
outside directors.  The Compensation Committee must certify that the performance
goals were achieved before payments can be awarded.

         The  Compensation  Committee  believes that our executive  compensation
program is consistent with the requirements of Section 162(m). Our regular stock
option plans under which options may be granted to executive  officers have been
approved by our  stockholders  and we believe such plans should  qualify for the
exclusion  from the deduction  limits.  Base salary,  annual bonuses and certain
other  compensation  amounts disclosed in the summary  compensation table do not
qualify  for the  exclusion  from  the $1  million  limit  but such  amounts  of
compensation are not expected to exceed the deduction  limits.  The Compensation
Committee will consider appropriate steps in the future,  including  stockholder
approval,  to maintain  deductions for our incentive  compensation  plans to the
greatest extent practical while maintaining flexibility to take actions which it
deems in our best  interests and in the best interests of our  stockholders  but
which may result in certain compensation not qualifying for tax deductions.

         The  Compensation   Committee   believes  that  performance  should  be
rewarded,  that the  financial  interests of the  executive  officers  should be
aligned with the stockholders,  and that compensation should be competitive.  We
have structured the compensation we pay to meet these criteria.

         The  foregoing  report on  compensation  is provided  by the  following
outside directors, who constituted the Compensation Committee as of December 31,
2001.


                                           Robert F. Hendrickson, Chairman
                                           Kevin G. Lokay, Member

                                       21




         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         There were, as of March 31, 2002, approximately 4,352 holders of record
and approximately  51,223 beneficial  holders of our common stock. The following
table sets forth  certain  information,  as of March 31,  2002,  with respect to
holdings  of  our  common  stock  by:  (i)  each  person  known  by us to be the
beneficial  owner of more  than 5% of the total  number of shares of our  common
stock outstanding as of such date, based upon currently  available Schedules 13D
and 13G filed  with the SEC,  (ii) each of our  directors  (which  includes  all
nominees) and Named Executives,  and (iii) all directors and executive  officers
as a group.



                                                                 Amount and Nature of             Beneficial
     Name and Address of Beneficial Owner(1)                         Ownership(1)             Percent of Class(2)
-------------------------------------------------------          --------------------         -------------------
                                                                                                
(i)  Certain beneficial owners:

     The State of Wisconsin Investment Board
     121 East Wilson Street
     Madison, Wisconsin  53707.........................                4,790,665                       6%

(ii) Directors (which includes all nominees) and Named
     Executives:

     H. Joseph Reiser..................................                1,853,008(3)                    2%

     John E. Bagalay, Jr...............................                  160,000(3)                    *

     Stephen K. Carter.................................                   31,800(3)                    *

     James A. Grigsby..................................                  176,050(3)                    *

     Robert F. Hendrickson.............................                   60,600(3)                    *

     Kevin G. Lokay....................................                   16,794(3)                    *

     William F. Goeckeler..............................                   50,759(3)                    *

     Lawrence R. Hoffman...............................                  200,195(3)                    *

     John D. Rodwell...................................                  444,437(3)                    *

     Catherine M. Verna................................                   35,597(3)                    *

(iii)All directors and executive officers as a
     group (12 persons)................................                3,104,598(3)                    4%


----------

* Indicates amount is less than 1%.

(1)  Except  as set  forth  in the  footnotes  to  this  table  and  subject  to
     applicable  community  property law, the persons and entities named in this
     table have sole voting and investment power with respect to all shares.

(2)  Percent of class for each person and all  executive  officers and directors
     as a group is based on 82,514,676 shares of our common stock outstanding on
     March  31,  2002  and  includes  shares  subject  to  options  held  by the
     individual or the group,  as  applicable,  which are  exercisable or become
     exercisable within 60 days following such date.

(3)  Includes  shares of our common stock which the  following  persons have the
     right to acquire  upon the  exercise  of stock  options,  within 60 days of
     March 31, 2002, as follows: Dr. Reiser:  1,843,334;  Dr. Bagalay:  140,956;
     Dr. Carter:  19,674; Mr. Grigsby:  121,600;  Mr.  Hendrickson:  40,600; Mr.
     Lokay:  13,333;  Dr. Goeckeler:  43,465; Mr. Hoffman:  183,334;  Ms. Verna:
     26,667; and Mr. Rodwell: 379,500.


                                       22




Certain Relationships and Related Transactions

         The members of our  Compensation  Committee  during 2001 were Robert F.
Hendrickson  (Chairman),  Kevin G. Lokay and S. Leslie  Misrock  (until July 18,
2001).  None of these  gentlemen were officers or employees of the Company while
serving on the  Compensation  Committee.  For Related  Transactions  information
relating to Mr.  Misrock,  please see  "EXECUTIVE  COMPENSATION  -  COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION."

    PROPOSED AMENDMENTS TO THE 1995 STOCK OPTION PLAN, THE 1999 NON-EMPLOYEE
                    DIRECTOR STOCK OPTION PLAN, AND BY-LAWS

The 1995 Stock Option Plan

General

         On March 28,  1995,  the Board of  Directors  approved  and, on May 23,
1995, our stockholders adopted, the 1995 Stock Option Plan, the "1995 Plan". The
1995 Plan  currently  provides for the grant of options to purchase a maximum of
4,502,635 shares of our common stock to eligible employees and consultants.

         The following is a summary description of the 1995 Plan as it currently
exists without giving effect to the proposed amendment,  and is qualified in its
entirety  by the full text of the 1995 Plan.  The full text of the 1995 Plan may
be  obtained by our  stockholders  upon  request to the office of our  Corporate
Secretary.

         A Committee,  designated by our Board of Directors, the "Committee", is
authorized  to, among other things,  interpret and  administer the 1995 Plan, to
select  employees or eligible  consultants  to whom options will be granted,  to
determine the time when options will be granted and the terms and  provisions of
the options  (which may differ from one another),  and to adopt and make changes
in the rules and regulations for carrying out the 1995 Plan. The Committee shall
be  composed of not less than two outside  directors  who are also  non-employee
directors and who are not eligible to participate in the 1995 Plan.

         Our Board of Directors may amend the 1995 Plan, except that stockholder
approval is required  to: (i)  increase  the maximum  number of shares of common
stock that may be issued on  exercise  of options  granted  under the 1995 Plan,
with  certain  exceptions;  (ii) change the  categories  of persons  eligible to
receive  options;  (iii)  increase the limit on the number of shares that may be
granted per optionee;  or (iv) modify the  provisions  of Section  7(a)(i) as it
relates to the  prohibition  of granting  options with an exercise price that is
less than the fair market  value of the  underlying  common stock on the date of
grant.

         Options  may be granted  under the 1995 Plan only to persons who at the
date of grant  either (i) are  employees  or eligible  consultants  or (ii) have
agreed to become  employees or eligible  consultants,  and, in either case,  are
determined by the Committee to be of substantial  importance to us or any of our
subsidiaries.  Options  granted to persons who are not yet employees or eligible
consultants  at the date of grant may not be  exercised  until the  optionee has
become an employee  or eligible  consultant,  and shall  expire if the  optionee
fails to  commence  service as an employee  or  eligible  consultant  within six
months (or such other period as the Committee may  determine)  after the date of
grant.

         The mere grant of an option does not require any consideration from the
optionee.  The  Committee  may, in its  discretion,  provide that payment of the
exercise  price  of an  option  may be made in cash or  check.  Options  will be
exercisable  over a period to be designated by the  Committee,  but not prior to
six months or more than ten years (or five  years for  certain  incentive  stock
options)  after  the  date of  grant.  Except  as  otherwise  determined  by the
Committee,  options  granted under the 1995 Plan will be exercisable  only while
the  optionee is employed by us and within three  months  after  termination  of
employment  generally or within 12 months after  termination  of  employment  by
reason of death or disability.


                                       23




         No  eligible  employee  may be granted  options to  purchase  more than
200,000 shares in any one calendar year. Under the 1995 Plan, eligible Optionees
may be granted  either ISOs or NQSOs.  ISOs are intended to be "incentive  stock
options"  under Section 422 of the Code and NQSOs are those options which do not
qualify under Section 422 of the Code.  Under the Code, the exercise price of an
ISO must be at least  equal to 100% of the fair  market  value of the  shares of
common stock on the date of grant,  although the exercise price of a NQSO may be
less than such fair market value. The aggregate fair market value (determined at
the time an option is  granted) of the common  stock with  respect to which ISOs
are first  exercisable  by an optionee  during any calendar  year may not exceed
$100,000.

         Options granted under the 1995 Plan are not transferable  other than by
will  or by  operation  of  the  laws  of  descent  and  distribution,  and  are
exercisable  to the extent vested at any time prior to the scheduled  expiration
date of the option. In the event of the death of an optionee,  the option may be
exercisable  by his estate.  If an option expires or is cancelled or surrendered
without being  exercised in full, the number of shares as to which the option is
not  exercised  will once again  become  shares as to which new  options  may be
granted. The 1995 Plan became effective as of March 28, 1995, and will remain in
effect for ten years thereafter  (March 28, 2005), or until sooner terminated by
our Board of Directors.

         Unless otherwise determined by our Board of Directors,  our issuance of
shares of stock of any class, or securities  convertible into shares of stock of
any class,  for cash or  property,  or for labor or services  either upon direct
sale or upon the  exercise of rights or warrants to  subscribe  therefor,  or on
conversion of shares or obligations of the Company  convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with  respect to, the number,  class or price of shares of common  stock
then subject to outstanding options.

         If as a  result  of (i)  our  reorganization  or  liquidation  or  (ii)
reclassification of our capital stock, or (iii) our consolidation or merger with
or into another  corporation,  or sale of all or substantially all the assets of
ours (such  reorganization  or  liquidation or  reclassification  of our capital
stock,  or a  merger,  consolidation  or  sale  of the  type  described  in this
subsection being a "Corporate Transaction") while an option is outstanding,  the
holders of the common  stock become  entitled to receive,  with respect to their
common  stock,  securities or assets other than, or in addition to, their common
stock,  upon  exercise of that  option,  the holder will receive what the holder
would have owned if the holder had exercised the option  immediately  before the
Corporate  Transaction  which occurred while the option was  outstanding and had
not disposed of anything the holder would have  received as a result of that and
all subsequent Corporate Transactions.


                                       24




Previously Granted Options Under the 1995 Plan

         As of March 31, 2002,  we had granted  options to purchase an aggregate
of 3,518,334 shares of common stock (net of  cancellations)  under the 1995 Plan
at a weighted  average  exercise price of $3.18 per share. As of March 31, 2002,
1,008,008  options to  purchase  shares  were  vested and  1,575,442  options to
purchase  shares have been exercised  under the 1995 Plan.  The following  table
sets forth information as of March 31, 2002 concerning options granted under the
1995 Plan to (i) the Named Executives;  (ii) all current executive officers as a
group; (iii) all current directors who are not executive officers as a group(1);
(iv) each nominee for election as a  director(1);  (v) each  associate of any of
such  directors,  executive  officers  or  nominees;  (vi) each  person  who has
received or is to receive 5% of such options or rights; and (vii) all employees,
including all current officers who are not executive officers, as a group(1):



                                               Options Granted
                                            (Net of Cancellation)
                                                    through              Weighted Average
              Name(1)                           March 31, 2002            Exercise Price          Expiration Date
---------------------------------------     --------------------         ----------------         ---------------
                                                                                        
(i)   The Named Executives:

       H. Joseph Reiser..............                400,000                   $2.15              8/2008 - 12/2011

       John D. Rodwell...............                322,000                   $3.81               7/2005 - 1/2008

       William F. Goeckeler..........                174,960                   $2.76             12/2007 - 12/2011

       Lawrence R. Hoffman...........                295,500                   $7.89              7/2010 - 12/2011

       Catherine M. Verna(2).........                 26,667                   $4.92                    5/2002

(ii)   All current executive officers as
       a group (7 persons)............             1,405,517                   $4.01              5/2002 - 12/2011

(iii) All employees, including all
      current officers who are not
      executive officers, as a group..             3,518,334                   $3.18              5/2002 - 12/2011


----------

(1)  Participation  in the 1995 Plan is limited to our  employees  and  eligible
     consultants,  therefore  directors  (other than H.  Joseph  Reiser) are not
     eligible to participate.

(2)  Ms. Verna resigned from her positions with us effective February 28, 2002.

         As of March 31, 2002,  the market value of our common stock  underlying
the 1995 Plan was $2.14 per share.

The 1999 Non-Employee Director Plan

General

         The  following  is a  summary  description  of  the  1999  Non-Employee
Director Plan,  (the  "Director  Plan"),  as it currently  exists without giving
effect to the proposed  amendment,  and is qualified in its entirety by the full
text of the Director Plan. The full text of the Director Plan may be obtained by
our stockholders upon request to the office of our Corporate Secretary.

         On April 1, 1999,  the Board of  Directors  approved  and,  on June 16,
1999, the stockholders  adopted,  the Director Plan. The Director Plan currently
provides for the grant of options to purchase a maximum of 500,000 shares of our
common stock to non-employee directors, of whom there are five.

                                       25



         Pursuant to the Director Plan, each  non-employee  director receives an
initial grant of options on the date of appointment  equal to a pro-rata portion
of 20,000 shares of our common stock,  based upon the number of months remaining
from the date of election until the one year anniversary of the preceding annual
meeting.  In  addition,  on  the  day  following  each  annual  meeting  of  the
stockholders,  each  individual who is elected as a non-employee  director shall
automatically  be granted options to purchase 10,000 shares of our common stock.
The  Chairman  of  the  Board,  unless  the  Compensation  Committee  determines
otherwise,  receives an additional grant of 15,000 options to purchase shares of
our common stock on the date of each annual  meeting.  Options granted under the
Director  Plan are  exercisable  at a price equal to the average of the high and
low sale prices of the common stock as reported on the Nasdaq National Market on
the date of grant and vest in full (i.e., first become exercisable) at the first
anniversary of the option grant date. Each director's  outstanding  options also
become  immediately  exercisable in full: (i) upon the occurrence of a change of
control of the Company; (ii) upon death or disability; or (iii) upon resignation
or retirement after age 55.

         In  addition,   at  our  2001  Annual  Meeting  of  Stockholders,   our
stockholders  adopted a proposal  to amend the  Director  Plan to  provide  that
non-employee directors shall receive, at the sole discretion of and after formal
action by our Board of Directors,  such number of shares of common stock that is
equal to each such director's cash compensation (including,  but not limited to,
annual service fees, fees payable for Board and committee  meetings attended and
fees for committees chaired),  (the "Cash Component") divided by the fair market
value of our  common  stock  as of the date of  issuance  of such  shares,  (the
"Compensation  Shares"),  which date shall be no earlier  than the date on which
the  applicable  Cash  Component  compensation  becomes  due and  payable by us.
Compensation  Shares  shall not be issued for  services not yet rendered by such
directors to us. Such  amendments to the Director  Plan further  provide that in
the event the Board of  Directors  elects  to issue  Compensation  Shares,  such
eligible Directors shall receive  Compensation  Shares until,  absent additional
board  action,  at least such time as: (i) such  director  owns twenty  thousand
(20,000)  shares of our  common  stock,  excluding  options  or other  rights to
acquire shares of our common stock,  whether  exercisable or  unexercisable;  or
(ii) if fewer than 20,000 shares are so owned, such smaller number of shares has
a fair market  value of in excess of one hundred  thousand  dollars  ($100,000),
excluding  the value,  if any,  of options to  purchase  common  stock,  whether
exercisable or unexercisable,  or other rights to acquire our common stock. Upon
achieving  either of such milestones (i) or (ii) above,  each such director may,
at his or her option,  elect to cease  receiving  his or her Cash  Component  to
which he or she is  entitled  in  shares  of our  common  stock  under the Plan;
provided,  however,  that such  director  must make such  election by  providing
notice of such election to us in a timely manner.  In October 2001, our Board of
Directors  took  appropriate  actions  to  implement  the  payment  of  director
compensation in Compensation Shares.

         Each  option  provided  for in  the  Director  Plan  shall  be  granted
automatically  and without  further  action by us, our Board of Directors or our
stockholders.  Promptly  after the date of grant of each option  provided for in
the  Director  Plan,  we shall  cause an option  agreement  to be  executed  and
delivered  to the holder of the option.  No other  options may be granted at any
time under the Director Plan.

         Options may not be transferred except by will or by the laws of descent
and  distribution  and are exercisable to the extent vested at any time prior to
the scheduled expiration date of the option. The Director Plan terminates on the
earlier  of June 16,  2009 or at such  time as all  shares of our  common  stock
currently or hereafter  reserved  for  issuance  shall have been issued,  unless
sooner terminated by the Board of Directors.

         In the event that our common stock shall be subdivided or combined into
a greater or smaller  number of shares or if we shall issue any shares of common
stock as a stock dividend on our outstanding  common stock, the number of shares
of common  stock  deliverable  upon the  exercise of options  granted  under the
Director Plan shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to reflect
such subdivision,  combination or stock dividend. In the event that we are to be
consolidated  with or  acquired  by another  entity in a merger,  sale of all or
substantially  all of our assets or  otherwise,  each option  granted  under the
Director Plan which is outstanding but unvested as of the effective date of such
event shall become fully exercisable.

         Our Board of Directors  may, at any time and from time to time,  modify
or amend the  Director  Plan in any respect  effective  at any date the Board of
Directors determines;  provided,  that without the approval of our stockholders,
the Board of  Directors  may not:  (i)  except as  provided  in Section 8 of the
Director  Plan,  increase the maximum number of shares of our common stock which

                                       26

may be issued on  exercise  of Options or the  payment  of  Compensation  Shares
granted  under the Director  Plan;  (ii) change the  provisions  of Section 6 or
Section 7 of the  Director  Plan;  or (iii)  change  the  categories  of persons
eligible to receive options or  Compensation  Shares under the Director Plan. No
modification or amendment of the Director Plan will,  without the consent of the
holder of an outstanding  Option or Compensation  Shares,  adversely  affect the
holder's rights under that Option or with respect to such Compensation Shares.

Previously Granted Options Under the Director Plan

         As of March 31, 2002,  we had granted  options to purchase an aggregate
of 271,666 shares of common stock (net of cancellations) under the Director Plan
at a weighted  average  exercise price of $3.60 per share. As of March 31, 2002,
167,940  options to purchase  shares were vested and 10,726  options to purchase
shares had been  exercised  under the Director  Plan.  The following  table sets
forth  information  as of March 31, 2002  concerning  options  granted under the
Director  Plan  to (i) the  Named  Executives(1);  (ii)  all  current  executive
officers  as a  group(1);  (iii) all  current  directors  who are not  executive
officers  as a group;  (iv) each  nominee for  election as a director;  (v) each
associate of any of such directors,  executive  officers or nominees;  (vi) each
person who has received or is to receive 5% of such options or rights; and (vii)
all employees, including all current officers who are not executive officers, as
a group(1):



                                            Options Granted
                                         (Net of Cancellation)
                                                through                Weighted Average
             Name(1)                         March 31, 2002             Exercise Price            Expiration Date
---------------------------------        ---------------------         ----------------           ---------------
                                                                                         
(iii)All current directors who
     are not executive officers
     as a group (5 persons)......                222,333                     $3.68                6/2009 - 6/2011

(iv)All current nominees for
     election as a director:

     James A. Grigsby............                 86,000                     $3.67                6/2009 - 6/2011

     John E. Bagalay.............                 41,000                     $3.54                6/2009 - 6/2011

     Stephen K. Carter...........                 41,000                     $3.54                6/2009 - 6/2011

     Robert F. Hendrickson.......                 41,000                     $3.54                6/2009 - 6/2011

     Kevin G. Lokay..............                 13,333                     $4.94                1/2011 - 6/2011

     H. Joseph Reiser, Ph.D(2)...                  --                           --                      --

----------

(1)  Participation   in  the  Director  Plan  is  limited  to  our  non-employee
     directors,  therefore  the Named  Executives,  executive  officers  and our
     employees are not eligible to participate.

(2)  As an executive  officer,  Mr. Reiser is not eligible to participate in the
     Director Plan.

          As of March 31, 2002, the market value of our common stock underlying
the Director Plan was $2.14 per share.

Background Regarding By-Laws

General

         The By-Laws  were last  amended by our Board of  Directors  on June 19,
2001.  The By-Laws  generally  provide that our  property,  business and affairs
shall be  managed  and  controlled  by our  Board  of  Directors.  The  Board of
Directors shall exercise all of the powers and duties conferred by law except as

                                       27



provided by the  Certificate  of  Incorporation  or the  By-Laws.  Copies of the
By-Laws may be obtained by our  stockholders  upon  request to the office of our
Corporate Secretary.

Federal Income Tax Treatment of the 1995 Plan and Director Plan

         The  following  is a summary of the United  States  federal  income tax
consequences  that generally will arise with respect to awards granted under the
1995 Plan and/or the  Director  Plan and with  respect to the sale of our common
stock acquired  under such plans.  This summary is based on the federal tax laws
in effect as of the date of this  Proxy  Statement.  Changes to these laws could
alter the tax consequences described below.

         The  options  issued  or to be  issued  under  the  1995  Plan  may  be
designated as either  incentive  stock  options  (ISOs) or  non-qualified  stock
options  (NQSOs),  and options under the Director Plan may only be designated as
NQSOs.

         In general,  a participant  will not recognize  taxable income upon the
grant or exercise of an ISO.  Instead,  a  participant  will  recognize  taxable
income  with  respect  to an ISO only  upon the sale of  common  stock  acquired
through the  exercise of the option,  or "ISO  Stock".  The  exercise of an ISO,
however, may subject the participant to the alternative minimum tax.

         Generally,  the  tax  consequences  of  selling  ISO  Stock  will  vary
depending on the date on which it is sold.  If the  participant  sells ISO Stock
more than two years from the date the option was  granted and more than one year
from the date the option was  exercised,  then the  participant  will  recognize
long-term capital gain in an amount equal to the excess of the sale price of the
ISO Stock over the exercise price.

         If the  participant  sells  ISO  Stock  prior to  satisfying  the above
waiting periods, then all or a portion of the gain recognized by the participant
will be ordinary  compensation  income and the remaining gain, if any, will be a
capital  gain.  This  capital  gain  will  be a  long-term  capital  gain if the
participant  has held the ISO Stock for more than one year  prior to the date of
sale.

         If a participant sells ISO Stock for less than the exercise price, then
the participant will recognize  capital loss in an amount equal to the excess of
the exercise price over the sale price of the ISO Stock.  This capital loss will
be a long-term  capital loss if the  participant has held the ISO Stock for more
than one year prior to the date of sale.

         NQSOs are  taxed  pursuant  to  Section  83 of the  Code.  If a NQSO is
granted  in  connection  with the  performance  of  services  and has a "readily
ascertainable  fair market value" at the time of the grant, the optionee will be
deemed to have  received  compensation  income in the year of grant in an amount
equal to the excess of the fair market  value of the option at the time of grant
over the amount,  if any, paid by the optionee for the option.  However,  a NQSO
generally has "readily  ascertainable fair market value" only when the option is
actively  traded  on an  established  market  and when  certain  stringent  Code
requirements are met.

         If the option does not have a readily  ascertainable  fair market value
at the time of the grant,  the option is not included as compensation  income at
that time. Rather, the optionee realizes ordinary  compensation income only when
the option is exercised and the optionee has become  substantially vested in the
shares  transferred.  The shares are considered to be substantially  vested when
they are either transferable or not subject to a substantial risk of forfeiture.
The amount of ordinary  compensation  income  realized is equal to the excess of
the fair market value of the shares at the time the shares become  substantially
vested over the sum of the exercise  price plus the amount,  if any, paid by the
optionee for the option.

         If a NQSO is exercised  through  payment of the  exercise  price by the
delivery of common  stock,  to the extent that the number of shares  received by
the optionee  exceeds the number of shares  surrendered,  ordinary  compensation
income  will be realized  by the  optionee at that time equal to the  difference
between the fair market value of such excess shares and the tax basis (generally
zero) of such excess shares.  We are generally  entitled to a tax deduction with
respect to any ordinary  compensation  income  recognized by a participant under
the 1995 Plan. Any such deduction will be subject to the  limitations of Section
162(m) of the Code.


                                       28



         Generally,  the  optionee's  basis in the shares  will be the  exercise
price plus the  optionee's  basis in the  option.  The  optionee's  basis in the
option is equal to the sum of the  compensation  income  realized at the time of
grant or exercise,  whichever is applicable, and the amount, if any, paid by the
optionee for the option. In the compensatory option context,  optionees normally
pay nothing for the grant of the option so the basis in the option will  usually
be the amount of ordinary  compensation  income realized at the time of grant or
exercise.  Thus, the  optionee's  basis in the shares will generally be equal to
the exercise price of the option plus the amount of ordinary compensation income
realized by the  optionee.  The capital gain or loss will be  short-term  if the
shares  are  disposed  of within one year  after the  option is  exercised,  and
long-term  if the shares are  disposed of more than one year after the option is
exercised.

         If a NQSO is taxed at the time of grant and  expires or lapses  without
being exercised,  it is treated in the same manner as the lapse of an investment
option.  The lapse is deemed to be a sale or  exchange  of the option on the day
the option  expires or lapses and the amount of income  realized by the optionee
is zero. The optionee  recognizes a capital loss in the amount of the optionee's
basis (ordinary  compensation  income realized at the time of the grant plus the
amount,  if any,  paid by the optionee for the option) in the option at the time
of the lapse.  This capital loss is short-term  or  long-term,  depending on the
optionee's holding period in the option.

         If a NQSO is not  taxed at the  time of grant  and  expires  or  lapses
without  being  exercised,   the  optionee  will  have  no  federal  income  tax
consequences unless the optionee paid for the option. In such case, the optionee
would  recognize a capital  loss in the amount of the price paid by the optionee
for the option.  This capital loss is short-term or long-term,  depending on the
optionees holding period in the option.

Reasons for and  General  Effect of Proposed  Amendments  to the 1995 Plan,  the
Director Plan and By-Laws

         Our Board of Directors  has  approved  certain  amendments  to the 1995
Plan, the Director Plan and By-Laws which further restrict our ability,  without
the approval of a majority of our stockholders, to: (a) grant stock appreciation
rights  with an exercise  price that is less than the fair  market  value of the
underlying common stock; or (b) effectively amend or replace certain outstanding
equity-based  awards in a manner  that would  result in lower  exercise  prices,
accelerated vesting schedules or the issuance of restricted stock.

         On January 18, 2002, we entered into a common stock purchase  agreement
with the State of Wisconsin  Investment  Board,  pursuant to which we issued and
sold,  2,970,665  shares of our common  stock for  aggregate  proceeds  to us of
approximately $8.0 million.

         Under the terms of the share  purchase  agreement,  we were required to
adopt,  subject to  stockholder  approval,  amendments to the Director Plan, the
1995 Plan and the By-Laws, (the "Amendments"),  to provide that, unless approved
by the  holders of a majority of the shares  present  and  entitled to vote at a
duly convened meeting of stockholders, we shall not:

         (a) grant any stock option, including stock appreciation right, with an
exercise price that is less than 100% of the fair market value of the underlying
stock on the date of grant;

         (b) reduce the  exercise  price of any stock  option,  including  stock
appreciation  right,  outstanding  or to be  granted in the  future;  cancel and
re-grant options at a lower exercise price (including entering into any "6 month
and 1 day"  cancellation  and  re-grant  scheme),  whether or not the  cancelled
options  are put back into the  available  pool for  grant;  replace  underwater
options with  restricted  stock in an  exchange,  buy-back or other  scheme;  or
replace  any  options  with  new  options  having  a  lower  exercise  price  or
accelerated vesting schedule in an exchange, buy-back or other scheme; or

          (c)  amend or  repeal  such  Amendments  or the  requirement  for such
Amendments.


                                       29

          Our Board of Directors approved amended versions of the 1995 Plan, the
Director Plan and the By-Laws  incorporating  provisions of such Amendments that
were not already set forth under the 1995 Plan, the Director Plan or the By-Laws
on June 19, 2001.  Accordingly,  the proposed  amendments to the 1995 Plan,  the
Director Plan and the By-Laws provide that without the approval of a majority of
our  stockholders,  we shall not:  (a) grant stock  appreciation  rights with an
exercise price that is less than the fair market value of the underlying  common
stock; or (b)  effectively  amend or replace  certain  outstanding  equity-based
awards in a manner  that  would  result in lower  exercise  prices,  accelerated
vesting schedules or the issuance of restricted stock.

         We agreed to submit  such  proposed  amendments  to the 1995 Plan,  the
Director  Plan and the  By-Laws to our  stockholders  for  approval  at our 2002
Annual Meeting of Stockholders.

         The  Board  of  Directors  recommends  a vote FOR the  approval  of the
Amendments to the 1995 Plan, the Director Plan and the By-Laws.

                   INFORMATION CONCERNING INDEPENDENT AUDITORS

         Arthur  Andersen LLP has served as our independent  public  accountants
since 1982.  Our Board of  Directors  has no reason to  question  the quality or
integrity of the audit and other assurance  services provided by Andersen during
this  time.  However,  during  the  past  several  months  our  Board  has  been
monitoring,  and will continue to monitor,  ongoing developments relating to the
investigation  of  Andersen  and  criminal  allegations  that have been  brought
against the firm. In  consideration of these  developments,  our Board has asked
management to hold discussions with other auditing firms, and these  discussions
are ongoing as of the date hereof.  Following these  discussions,  our Board may
engage another firm for auditing  services  beginning in 2002. We have requested
that  a  representative   from  Andersen  attend  our  2002  Annual  Meeting  of
Stockholders.  Such representative will have an opportunity to make a statement,
if he or she desires, and will be available to respond to appropriate  questions
from stockholders.

                             STOCKHOLDERS' PROPOSALS

         Stockholders who intend to have a proposal  considered for inclusion in
our proxy materials for  presentation at our 2003 Annual Meeting of Stockholders
pursuant to Rule 14a-8 under the Exchange  Act must submit their  proposal to us
at our offices at 600 College Road East, CN 5308, Princeton,  New Jersey, 08540,
attention H. Joseph Reiser not later than January 9, 2003.

         Stockholders  who intend to present a proposal at such meeting  without
inclusion of such proposal in our proxy  materials  pursuant to Rule 14a-8 under
the Exchange Act are required to provide  advanced notice of such proposal to us
at the aforementioned address not later than March 25, 2003.

         If we do not  receive  notice of a  stockholder  proposal  within  this
timeframe,  our  management  will use its  discretionary  authority  to vote the
shares they represent,  as our Board of Directors may recommend.  We reserve the
right to  reject,  rule out of order,  or take  other  appropriate  action  with
respect  to any  proposal  that does not  comply  with  these  other  applicable
requirements.

                    HOUSEHOLDING OF ANNUAL MEETING MATERIALS

         The SEC has also recently adopted a "householding" rule which we intend
to  implement  for future  stockholder  communications.  This rule permits us to
deliver a single proxy or information statement to a household,  even though two
or more  stockholders  live  under the same  roof or a  stockholder  has  shares
registered in multiple  accounts.  This rule enables us to reduce the expense of
printing and mailing  associated with proxy statements and reduces the amount of
duplicative  information you may currently receive.  If this rule applies to you
and  you  wish  to  continue   receiving   separate  proxy   materials   without
participating in the "householding" rule, please check the designated box on the
enclosed  proxy card.  If we do not hear from you within 60 days, we will assume
that we have your implied  consent to deliver one set of proxy  materials  under
the new rule.  This implied  consent  will  continue for as long as you remain a
stockholder of the company,  unless you inform us in writing  otherwise.  If you
revoke your consent, we will begin sending separate copies within 30 days of the
receipt of your revocation.

                                       30




         Some  banks,  brokers  and other  nominee  record  holders  are already
"householding"  proxy  statements and annual  reports.  This means that only one
copy of our proxy  statement  or annual  report  may have been sent to  multiple
stockholders  in your  household.  We will  promptly  deliver a separate copy of
either  document  to you if you  write  us at 600  College  Road  East  CN-5308,
Princeton,  New  Jersey  08540,  or call us at  (609)  750-8200.  If you want to
receive  separate copies of the annual report and proxy statement in the future,
or if you are receiving  multiple copies and would like to receive only one copy
for your  household,  you should  contact your bank,  broker,  or other  nominee
record holder, or you may contact us at the above address and phone number.

                                  OTHER MATTERS

         Our Board of Directors  is not aware of any matter to be presented  for
action at the Annual Meeting other than the matters  referred to above, and does
not intend to bring any other matters  before the Annual  Meeting.  However,  if
other matters should come before the Annual  Meeting,  we intend that holders of
the proxies will vote thereon in their discretion.

                                     GENERAL

         The  accompanying  proxy is  solicited by and on behalf of our Board of
Directors,  whose notice of meeting is attached to this Proxy Statement, and the
entire cost of such solicitation will be borne by us.

         In  addition  to the use of the  mails,  proxies  may be  solicited  by
personal interview,  telephone and telegram by our directors, officers and other
employees who will not be specially compensated for these services. We will also
request  that  brokers,  nominees,  custodians  and  other  fiduciaries  forward
soliciting  materials to the beneficial  owners of shares held of record by such
brokers,  nominees,  custodians  and other  fiduciaries.  We will reimburse such
persons for their reasonable expenses in connection therewith.

         Certain  information  contained in this Proxy Statement relating to the
occupations  and security  holdings of our  directors and officers is based upon
information received from the individual directors and officers.

         WE WILL FURNISH,  WITHOUT CHARGE, A COPY OF OUR REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 2001,  INCLUDING  CONSOLIDATED  FINANCIAL STATEMENTS
BUT NOT INCLUDING  EXHIBITS,  TO EACH OF OUR STOCKHOLDERS OF RECORD ON APRIL 22,
2002, AND TO EACH BENEFICIAL  STOCKHOLDER ON THAT DATE UPON WRITTEN REQUEST MADE
TO  MR.  H.  JOSEPH  REISER,   PRESIDENT  &  CHIEF  EXECUTIVE  OFFICER,  CYTOGEN
CORPORATION,  600 COLLEGE ROAD EAST, CN 5308,  PRINCETON,  NEW JERSEY  08540.  A
REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.

         PLEASE  DATE,   SIGN  AND  RETURN  THE  PROXY  CARD  AT  YOUR  EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE.  A PROMPT RETURN OF YOUR PROXY CARD
WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.

                                      By Order of the Board of Directors



                                      /s/ H. Joseph Reiser
Princeton, New Jersey                 H. Joseph Reiser
May 9, 2002                           President and Chief Executive Officer








                                     31


                                  COMMON STOCK
                              CYTOGEN CORPORATION

               PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
            OF THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS

         The  undersigned  hereby  constitutes and appoints H. Joseph Reiser and
Lawrence  R.  Hoffman,  and each of them,  his or her true and lawful  agent and
proxy with full  power of  substitution  in each,  to  represent  and to vote on
behalf  of the  undersigned  all of  the  shares  of  Cytogen  Corporation  (the
"Company")  which the  undersigned  is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at The Radisson Hotel, Route One at Ridge
Road,  Princeton,  New Jersey at 11:00 a.m.,  local time,  on Tuesday,  June 18,
2002,  and at any  adjournment  or  adjournments  thereof,  upon  the  following
proposals more fully  described in the Notice of Annual Meeting of  Stockholders
and Proxy Statement for the Meeting (receipt of which is hereby acknowledged).

         This proxy when properly  executed will be voted in the manner directed
herein by the undersigned stockholder.  If no direction is made, this proxy will
be voted FOR proposals 1 and 2.

                  (continued and to be signed on reverse side)




                 Please Detach and Mail In the Envelope Provided

A [X] Please mark your votes as in this example.


                  FOR    WITHHELD
1. ELECTION OF                       Nominees:
   DIRECTORS.     [  ]     [  ]      James A. Grigsby      Stephen K. Carter
                                     H. Joseph Reiser      Robert F. Hendrickson
                                     John E. Bagalay, Jr.  Kevin G. Lokay

 VOTE FOR all the nominees listed at right;
 except vote withheld from the following
 nominee(s) (if any).

 -----------------------------------------------------

2.   APPROVAL OF PROPOSAL TO AMEND, AS REQUIRED, THE COMPANY'S 1995 STOCK OPTION
     PLAN,  1999  NON-EMPLOYEE  DIRECTOR  STOCK  OPTION  PLAN  AND  BY-LAWS,  AS
     APPLICABLE,  TO PROVIDE  THAT  WITHOUT  THE  APPROVAL  OF A MAJORITY OF THE
     COMPANY'S STOCKHOLDERS, THE COMPANY SHALL NOT:

                 FOR              AGAINST              ABSTAIN
                 [  ]               [  ]                 [  ]


     (i)  GRANT STOCK  APPRECIATION  RIGHTS WITH AN EXERCISE  PRICE THAT IS LESS
          THAN THE FAIR MARKET VALUE OF THE UNDERLYING COMMON STOCK; OR

     (ii) EFFECTIVELY AMEND OR REPLACE CERTAIN  OUTSTANDING  EQUITY-BASED AWARDS
          IN A MANNER THAT WOULD RESULT IN LOWER EXERCISE  PRICES,  ACCELEREATED
          VESTING SCHEDULES OR THE ISSUANCE OF RESTRICTED STOCK. 3 In his or her
          discretion,  the proxy is authorized to vote upon other matters as may
          properly  come  before  the  Meeting.  I will I will  not  attend  the
          Meeting.

3.   In his or her  discretion,  the  proxy is  authorized  to vote  upon  other
     matters as may properly come before the Meeting.

               I will               I will not               attend the Meeting.
                [  ]                   [  ]



***                             HOUSEHOLDING                                 ***

If you wish to continue receiving separate proxy materials without participating
in the  "householding"  rule, as described on page 30 of our accompanying  proxy
statement,  please  check the box  below.  If we do not hear from you  within 60
days,  we will  assume that we have your  implied  consent to deliver one set of
proxy  materials  under the new rule.  This implied consent will continue for as
long as you remain a shareholder of the Company, unless you inform us in writing
otherwise.  If you revoke your consent,  we will begin sending  separate  copies
within 30 days of the receipt of your revocation.

            [  ] I do not wish to participate in "householding".


PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,  USING THE ENCLOSED
ENVELOPE.

Signature of Common Stockholder_______________________


Signature of Common Stockholder_______________________      Dated: ____________
                                  IF HELD JOINTLY


Note:    This proxy  must be signed  exactly as the name  appears  hereon.  When
         shares are held by joint tenants,  both should sign. If the signer is a
         corporation,  please  sign  full  corporate  name  by  duly  authorized
         officer,  giving  full title as such.  If the signer is a  partnership,
         please sign in partnership name by authorized person.




                                   APPENDIX A

                              AMENDED AND RESTATED

                         1999 NON-EMPLOYEE DIRECTOR PLAN









                              CYTOGEN CORPORATION

                  AMENDED AND RESTATED 1999 STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS


1.   Purpose; Effective Date.

     (a) The  purposes  of this Plan are to  further  the  interests  of Cytogen
Corporation  (the "Company") by retaining the services of persons now serving as
non-employee Directors of the Company,  attracting and retaining the services of
persons  capable of serving on the Board of  Directors  of the  Company,  and by
providing  such persons with an incentive  that aligns their  interests with the
interests of the Company's shareholders.

     (b)  This  Plan  will  become  effective  on  approval  of the  Plan by the
affirmative  vote of the majority of shares  present in person or represented by
proxy at a meeting of the  shareholders  of the Company and cast on the proposal
for  approval  of the Plan.

2.   Definitions.

     Whenever used in this Plan, the following  terms will have the meanings set
forth in this Section:

     "Board of Directors" means the Board of Directors of the Company.

     "Cash  Component"  means  director  cash  compensation,  including  but not
limited to annual services fees,  fees payable for board and committee  meetings
attended and fees for committees chaired.

     "Code" means the United States Internal Revenue Code of 1986, as amended.

     "Common  Stock" means the common  stock,  par value $.0l per share,  of the
Company.

     "Compensation  Shares"  means any shares of Common Stock issued to Eligible
Directors  hereunder in payment of such Eligible  Director's  Cash  Component of
compensation.

     "Date of Grant"  means with  respect to any Option the date the Option will
become effective under the provisions of this Plan.

     "Disability"  means  inability  of a Director to engage in any  substantial
gainful  activity  by  reason of a  medically  determinable  physical  or mental
impairment which  reasonably can be expected to last for a continuous  period of
not less than six months.

     "Eligible  Director"  means,  as of any time, a person who is a director of
the Company but is not then an Employee.


     "Employee"  means any person  employed by the Company  (including,  without
limitation,  a person employed by the Company who is also an officer or director
of the Company).

     "Exchange Act" means the Securities  Exchange Act of 1934, as amended,  and
rules and regulations promulgated thereunder.

     "Exercise Price" means with respect to any Option the price per share which
must be paid upon exercise of the Option.

     "Fair Market  Value" means (i) if the Common Stock is traded in a market in
which actual  transactions are reported,  the average of the high and low prices
at which the Common Stock is reported to have traded on the relevant date in all
markets  on which  trading in the Common  Stock is  reported,  or if there is no
reported sale of the Common Stock on the relevant  date, the mean of the highest
reported bid price and lowest  reported  asked price for the Common Stock on the
relevant date,  (ii) if the Common Stock is Publicly  Traded but only in markets
in which there is no reporting of actual  transactions,  the mean of the highest
reported bid price and the lowest  reported  asked price for the Common Stock on
the relevant  date,  or (iii) if the Common Stock is not  Publicly  Traded,  the
value of a share  of  Common  Stock as  determined  by the  most  recent  annual
valuation  prepared  by an  independent  expert at the  request  of the Board of
Directors.

     "Major Event" means when (i) the Company enters into one or more definitive
agreements to merge or consolidate the Company with or into another corporation,
or to sell or otherwise  dispose of all or  substantially  all of the  Company's
assets,  or to effect any other  transaction,  consolidation  or  reorganization
having similar results or effect; (ii) any person other than the Company makes a
tender or  exchange  offer for more than 50% of Common  Stock  pursuant to which
purchases  of any amount of Common Stock are made;  or (iii) stock  representing
more than 50% of the voting power of the Company is acquired by any person other
than the  Company  in any one or more  transactions  occurring  in any  24-month
period.

     "Option" means any option granted under this Plan.

     "Option Agreement" means an agreement, in such form as may be determined by
the Board of Directors or the  Committee,  executed and delivered by the Company
to the holder of any Option with respect to that option.

     "Option  Shares" means,  with respect to any Option,  the maximum number of
shares of Common  Stock  which may be  acquired  under the  option  prior to its
expiration.

     "Plan" means the Cytogen  Corporation  1999 Directors Stock Option Plan, as
amended.

     "Publicly Traded" means, with respect to any class of stock, that the class
of stock  is  required  to be  registered  under  Section  12 of the  Securities
Exchange  Act of 1934,  as  amended,  or that  stock of that class has been sold
within the preceding 12 months in an underwritten public offering.

                                       A-2


     "Termination  of Service" means the time when a Director ceases to serve as
a  Director  for  any  reason,   including  without   limitation  by  reason  of
resignation, retirement, removal, death or Disability.

3.   Administration of the Plan.

     (a)  The  Compensation   Committee  of  the  Board  of  Directors  will  be
responsible for the  administration of this Plan. The Committee shall consist of
two or more  non-employee  directors of the Company who meet the  definition  of
"outside  director"  under the  provisions of Section 162(m) of the Code and the
definition of "non-employee  director" under the provisions of the Exchange Act.
No member of the Committee  shall have been within one year prior to appointment
to, or while serving on, the Committee  granted or awarded equity  securities of
the  Company  pursuant  to this or any other plan of the  Company  except to the
extent that participation in any such plan or receipt of any such grant or award
would not adversely  affect the  Committee  member's  status as a  "non-employee
director" or as an "outside director".

     (b) The  Committee  shall  (i)  determine  or  provide  for the  terms  and
conditions of the issuance of Compensation Shares, if so authorized by the Board
of Directors, or grant Agreements, and all election and other forms, which terms
and conditions shall not be inconsistent with this Plan, (ii) interpret the Plan
and (iii) make all other  decisions  relating to the operation of the Plan.  The
Committee  may  adopt  such  rules  or  guidelines  as it deems  appropriate  to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.

     (c) No member of the Board of Directors or of any committee of the Board of
Directors shall be liable for any act or omission of the Board or any committee,
or of any other member of the Board or any committee, or for any act or omission
on his own part, in connection  with the  administration  of this Plan unless it
resulted  from the  member's  own willful  misconduct.

 4.  Persons  Eligible to Receive Options and Compensation Shares.

     Options  and  Compensation   Shares  shall  be  granted  only  to  Eligible
Directors.

5.   Stock Subject to the Plan.

     The  maximum  number  of  shares of  Common  Stock as to which  Options  or
Compensation  Shares may be granted or issued under this Plan is 500,000 shares,
subject to  adjustment  as provided in Section 8. If any Option or  Compensation
Share expires or is cancelled,  surrendered or forfeited without being exercised
in full (with  respect to Options),  the number of shares as to which the Option
is not exercised, or Options or Compensation Shares are canceled, surrendered or
forfeited, will once again become shares as to which new Options or Compensation
Shares may be granted.  The Common  Stock  which is issued upon the  exercise of
Options or issued as  Compensation  Shares may be authorized but unissued shares
or shares which have been issued and  reacquired  by the  Company.


                                      A-3

6. Grants of Options or Compensation  Shares.

     (a) Each person who is newly-elected a director of the Company at an annual
meeting of the  stockholders  of the Company,  such person having not previously
served as a director  of the  Company  and such  person  then being an  Eligible
Director,  shall, as of the date of such annual meeting, be granted an Option to
purchase  twenty thousand  (20,000)  shares of Common Stock.  In addition,  each
person who is  appointed a director  of the  Company  after the date of the most
recent annual  meeting of the  stockholders  of the Company,  and is an Eligible
Director as of such date,  shall be granted on such date an Option to purchase a
pro rata portion of twenty thousand (20,000) shares of Common Stock,  based upon
the number of full months  remaining from the date of appointment  until the one
year anniversary month of such preceding annual meeting.

     (b) Effective on approval of the Plan by the shareholders,  each person who
is on that date an  Eligible  Director  shall be granted  an Option to  purchase
twenty one thousand (21,000) shares of Common Stock (the "Initial Option").

     (c) Each person who is  appointed a director of the Company  after the date
of approval of the Plan by the  Shareholders  and is an Eligible  Director as of
such date  shall be  granted  an Option to  purchase  a pro rata  portion of ten
thousand  (10,000) shares of Common Stock,  based upon the number of full months
remaining from the date of election until the one year anniversary  month of the
preceding annual meeting, as of the effective date of their appointment.

     (d) On the day following  each annual  meeting of the  stockholders  of the
Company,  commencing  with the 2000 annual  meeting,  each person who is on that
date an Eligible Director and was re-elected at that meeting shall be granted an
Option to purchase 10,000 shares of Common Stock. In addition, a Chairman of the
Board of Directors,  unless the  Compensation  Committee of the Board determines
otherwise, shall receive an additional grant of fifteen thousand (15,000) shares
of Common Stock.

     (e) Eligible  Directors shall receive,  at the sole discretion of and after
formal action by the Board of Directors,  Compensation  Shares in such number of
shares of Common Stock that is equal to each respective Eligible Director's Cash
Component  compensation divided by the Fair Market Value of the Company's Common
Stock as of the date of issuance of such Compensation  Shares, which shall be no
earlier  than the date on  which  the  applicable  Cash  Component  compensation
becomes due and payable by the Company,  subject to the terms and conditions set
forth  herein.  Compensation  Shares  shall not be issued for  services  not yet
rendered by an Eligible Director to the Company.

     (f)  Subject to Section  6(e)  hereof,  Eligible  Directors  shall  receive
Compensation  Shares in lieu of the Cash  Component of such Eligible  Director's
compensation until at least such time as: (i) such Eligible Director owns twenty
thousand  (20,000) shares of the Company's  Common Stock,  excluding  options or
other  rights  to  acquire  shares  of  the  Company's  Common  Stock,   whether
exercisable or unexercisable;  or (ii) if fewer than 20,000 shares are so owned,
such  smaller  number of shares  having a Fair Market  Value of in excess of one
hundred thousand dollars ($100,000),  excluding the value, if any, of options to
purchase Common Stock, whether exercisable or unexercisable,  or other rights to
acquire Common Stock of the Company.

                                      A-4

     (g) Upon  achieving  either  of the  milestones  (i) or (ii)  set  forth in
Section  6(f) hereof,  each such  Eligible  Director  may, at his or her option,
elect  to  cease  receiving  his or her  Cash  Component  to  which he or she is
entitled in shares of Common Stock under the Plan; provided,  however, that such
Eligible  Director must make such election by providing  notice of such election
to the Company.

     (h)  Each  Option   provided  for  in  this  Section  6  shall  be  granted
automatically and without further action by the Company,  the Board of Directors
or the Company's  stockholders.  Promptly after the Date of Grant of each Option
provided for in this Section 6, the Company  shall cause an Option  Agreement to
be executed and  delivered to the holder of the Option.  No other Options may be
granted at any time under this Plan.

7.   Option and Compensation  Shares  Provisions.

     (a) Exercise  Price.  The Exercise Price of the Initial Option will be 200%
of the Fair Market Value of the Common Stock on the Date of Grant of the Option.
The Exercise  Price of each Option other than the Initial Option will be 100% of
the Fair  Market  Value of the Common  Stock on the Date of Grant of the Option.
The Committee may not reduce the Exercise  Price of any Option granted under the
Plan.

(b)  Term;  Vesting.

     (i)  No Option  granted under this Plan may be exercised more than 10 years
          after the Date of Grant of the option.

     (ii) Except as provided in Sections  7(b)(iii),  7(f),  7(g) and 7(h),  the
          Initial  Option  shall  become  exercisable  in  one-third  increments
          annually on the first,  second, and third anniversaries of the Date of
          Grant,  and  Options  other  than  the  Initial  Option  shall  become
          exercisable in full on the first anniversary of the Date of Grant.

     (iii)Upon  the  occurrence  of a  Major  Event,  all of the  Option  Shares
          covered by an Option shall become  immediately  available for purchase
          upon exercise of the option,  without regard to the vesting provisions
          of Section 7(b)(ii).

     (c) Exercise of Options.  An Option may be exercised in whole or in part at
any time,  or from time to time,  during its term.  To exercise  an Option,  the
person  exercising  the Option must  deliver to the  Company,  at its  principal
office:

     (i)  a notice of exercise of the Option,  which  states the extent to which
          the option is being exercised; and

     (ii) payment  in full in cash,  which may be  satisfied  by a check,  in an
          amount equal to the  Exercise  Price of the option times the number of
          shares as to which it is being exercised.

                                      A-5


    (d) Delivery of Stock  Certificates.  As promptly as  practicable  after an
option is  exercised  or  Compensation  Shares  become  payable  to an  Eligible
Director,  the Company will deliver to the person who exercises the Option or is
owed such  Compensation  Shares,  certificates  registered in that person's name
representing  the number of shares of Common  Stock which were  purchased by the
exercise of the option or grant of  Compensation  Shares in payment for services
rendered.  Each certificate may bear a legend to indicate,  if applicable,  that
the Common Stock  represented  by the  certificate  was issued in a  transaction
which was not registered  under the Securities Act of 1933, as amended,  and may
only be sold or transferred in a transaction  which is registered under that Act
or is exempt from the registration requirements of that Act.

    (e)  Nontransferability

     (i)  Options.  During the lifetime of a person to whom an option is issued,
          the Option may be exercised only by that person or his or her guardian
          or legal  representative.  An Option may not be  assigned,  pledged or
          hypothecated  in any way, will not be subject to  execution,  and will
          not be transferable  otherwise than by will or the laws of descent and
          distribution.  The Company will not  recognize  any attempt to assign,
          transfer,  pledge,  hypothecate  or  otherwise  dispose  of an  option
          contrary to the provisions of this Plan, or any levy of any attachment
          or similar process upon any Option, and, except as expressly stated in
          this Plan,  the Company will not be required  to, and will not,  issue
          Common  Stock on  exercise  of an option to anyone  who claims to have
          acquired that option from the person to whom it was granted.

     (ii) Compensation  Shares.  For one  year  after  the date of  issuance  of
          Compensation Shares to any Eligible Director, such Compensation Shares
          shall not be transferable by such Eligible  Director.  During this one
          year  period,  Compensation  Shares  may not be  assigned,  pledged or
          hypothecated in any way, and will not be  transferable  otherwise than
          by will or the laws of descent and distribution.  The Company will not
          recognize  any attempt to assign,  transfer,  pledge,  hypothecate  or
          otherwise dispose of Compensation Shares contrary to the provisions of
          this Plan, or any levy of any  attachment or similar  process upon any
          Compensation Shares, and, except as expressly stated in this Plan, the
          Company  will not be  required  to, and will not,  remove any  related
          restrictive  legend from the  Compensation  Shares until such one year
          period has expired.  The Compensation  Shares shall bear a restrictive
          legend  evidencing  such  lock-up  (the  "Lock-up  Legend").  Upon the
          expiration of such one year lock-up period, Compensation Share s shall
          become fully  transferable by the holder,  subject to the terms of the
          Securities  Act of 1933,  as amended and state  securities  laws.  The
          Company shall take reasonable  steps to remove the Lock-up Legend from
          the Compensation  Shares within a reasonable time after the expiration
          of  such   period   upon  the   request  of  an   Eligible   Director.
          Notwithstanding such lock-up provision, upon the occurrence of a Major
          Event,  all of the  Compensation  Shares issued  hereunder to Eligible
          Directors  shall be  treated in a like  manner as are the  outstanding
          shares of the Company's Common Stock upon the occurrence of such Major
          Event.

                                      A-6

     (f) Termination of Service of Director Holding an Option Other Than Because
of Death or Disability.  Subject to the provisions of Sections 7(b) and 7(h), if
there is a  Termination  of  Service  of a  director  to whom an Option has been
granted,  other  than by  reason  of the  director's  death  or  disability,  or
retirement,  each Option held by the director may be exercised until the earlier
of (x) the end of the  three-month  period  immediately  following  the  date of
Termination of service, or (y) the expiration of the term of the option.

     (g) Death or Disability of Director Holding an Option.  Notwithstanding the
provisions of Section  7(b), if there is a Termination  of Service of a director
to whom an  option  has  been  granted  by  reason  of the  director's  death or
disability,  or a former director dies within three months following the date of
his or her Termination of Service,  each option held by the Director on the date
of the  Director's  Termination  of Service may be exercised  in full (i.e.,  in
respect of up to 100% of the Option shares, regardless of the time elapsed since
the Date of  Grant)  until the  earlier  of (x) the end of the  one-year  period
immediately  following the date of  Termination of service or (y) the expiration
of the term of the option. In the event of an Eligible  Director's death, all of
such person's  outstanding Options will transfer to the maximum extent permitted
by law to such person's designated Beneficiary. Each Eligible Director may name,
from  time to  time,  any  beneficiary  or  beneficiaries  (which  may be  named
contingent ly or  successively)  as his or her  Beneficiary for purposes of this
Plan. Each  designation  shall be on a form  prescribed by the Company,  will be
effective  only when delivered to the Company and when effective will revoke all
prior designations by the Eligible  Director.  If an Eligible Director dies with
no such  beneficiary  designation  in  effect,  such  person's  Options  will be
transferable  by will  or  pursuant  to the  laws of  descent  and  distribution
applicable to such person.

     (h)  Retirement or  Resignation.  If there is a Termination of Service of a
Director by reason of the Director's retirement or resignation at any time after
the  Director  has  reached age 55 with a minimum of three  years'  service as a
non-employee  director,  each  Option  held by the  Director  on the date of the
Director's  Termination of Service may be exercised in full (i.e., in respect of
up to 100% of the Option  Shares,  regardless of the time elapsed since the Date
of Grant)  until the earlier of (x) the end of the five year period  immediately
following the date of  Termination  of Service or (y) the expiration of the term
of the option.

8.   Recapitalization, reorganizations, stock splits and the like.

     (a) The existence of outstanding  Options or Compensation  Shares shall not
affect in any way the right or power of the Company or its  stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's  capital  structure or its  business,  or any merger or
consolidation of the Company,  or any issue of bonds,  debentures,  preferred or
prior  preference  stock ahead of or  affecting  the Common  Stock or the rights
thereof,  or the  dissolution  or  liquidation  of the  Company,  or any sale or
transfer of all or any part of its assets or business or any other corporate act
or  proceeding,   whether  of  a  similar  character  or  otherwise.  Except  as
hereinafter  expressly provided,  the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or  property,  or for labor or  services  either  upon  direct  sale or upon the


                                      A-7


exercise of rights or warrants to subscribe therefor, or on conversion of shares
or obligations o f the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to,  the  number,  class or price of shares  of Common  Stock  then  subject  to
outstanding options.

     (b) If as a result of any (i)  reorganization or liquidation of the Company
or (ii)  reclassification  of the Company's capital stock,  stock splits,  stock
splits  in  the  form  of   dividends,   reverse   stock   splits,   or  similar
recapitalizations  of the  Company,  or (iii)  consolidation  or  merger  of the
Company with or into another  corporation,  or sale of all or substantially  all
the assets of the Company (a  reorganization  or  liquidation  of the Company or
reclassification  of the Company's capital stock, or a merger,  consolidation or
sale of the type described in this subsection  being a "Corporate  Transaction")
while an Option is outstanding,  the holders of the Common Stock become entitled
to receive with respect to their Common Stock,  securities or assets other than,
or in addition to, their Common  Stock,  upon exercise of that Option the holder
will receive what the holder  would have owned if the holder had  exercised  the
Option immediately  before the first Corporate  Transaction which occurred while
the option was outstan  ding and had not  disposed of anything  the holder would
have  received as a result of that and all  subsequent  Corporate  Transactions.
Compensation Shares shall be adjusted in the same manner as the Company's Common
Stock in all events.

9.   Rights of Option  Holder.

     The holder of an Option will not have any rights as a stockholder by reason
of holding that Option. Upon exercise of an Option, the holder will be deemed to
acquire the rights of a stockholder when, but not before, the issuance of Common
Stock as a result  of the  exercise  is  recorded  in the stock  records  of the
Company.

10.  Laws and Regulations.

     The obligation of the Company to sell and deliver shares of Common Stock on
exercise of options or upon the issuance of Compensation  Shares will be subject
to the condition  that legal counsel for the Company be satisfied  that the sale
and delivery will not violate the  Securities  Act of 1933,  as amended,  or any
other applicable laws, rules or regulations.

11.  Reservation of Shares.

     The Company  will at all times keep  reserved  for  issuance on exercise of
options a number of authorized but unissued or reacquired shares of Common Stock
equal to the  maximum  number of shares the  Company may be required to issue on
exercise of  outstanding  options  (assuming  no  subsequent  adjustments  under
Section 8).

12.  Amendment of the Plan.

     The  Board of  Directors  may at any time and from  time to time  modify or
amend  this Plan in any  respect  effective  at any date the Board of  Directors
determines;  provided,  that  without the  approval of the  stockholders  of the
Company  the Board of  Directors  may not,  (i) except as provided in Section 8,

                                      A-8

increase  the  maximum  number of shares of Common  Stock which may be issued on
exercise of Options or the payment of  Compensation  Shares  granted  under this
Plan;  (ii) change the  provisions  of Section 6 or Section 7; (iii)  change the
categories of persons  eligible to receive options or Compensation  Shares under
this Plan; or (iv)  otherwise  materially  increase  (within the meaning of Rule
16b-3  of  the  Exchange  Act)  the  benefits   accruing  under  this  Plan.  No
modification  or amendment of this Plan will,  without the consent of the holder
of an outstanding Option or Compensation  Shares,  adversely affect the holder's
rights  under  that  Option  or  with  respect  to  such  Compensation   Shares.
Notwithstanding approval by shareholde rs, the Board may amend this Plan without
further shareholder approval to add provisions required or enabled by changes to
Rule 16b-3.

13.  Termination of the Plan.

     This Plan will terminate on June 16, 2009,  unless sooner  terminated.  The
Board of Directors  may suspend or terminate  this Plan at any time or from time
to time, but no such action may adversely  affect the rights of a person holding
an outstanding  Option or Compensation  Share. The applicable terms of the Plan,
and any terms and  conditions as applicable  to Options or  Compensation  Shares
granted  prior to such  date,  shall  survive  the  termination  of the Plan and
continue to apply to such Options or Compensation Shares.




                                      A-9





                                   APPENDIX B

                              AMENDED AND RESTATED

                             1995 STOCK OPTION PLAN









                               CYTOGEN CORPORATION

                              AMENDED AND RESTATED
                             1995 STOCK OPTION PLAN

                       (last amended as of June 19, 2001)


1.   Purpose; Effective Date.

     (a) The  purposes  of this Plan are to  further  the  interests  of Cytogen
Corporation  (the  "Company") and its  Subsidiaries by retaining the services of
persons now serving as  officers  and other  employees  and  consultants  of the
Company and its  Subsidiaries,  attracting and retaining the services of persons
capable of serving as officers, employees and consultants of the Company and its
Subsidiaries  and providing  incentives  for such  employees and  consultants to
exert   maximum   efforts  to  promote  the  success  of  the  Company  and  its
Subsidiaries.

     (b) The  effective  date of this  Plan is March  28,  1995.  This Plan will
become  effective  on that date,  subject to approval of the Plan not later than
September  30, 1995 by a majority of the votes cast at a duly held  stockholders
meeting at which a quorum  representing  a majority  of all  outstanding  voting
stock is, either in person or by proxy,  present and voting on the Plan. Nothing
in this Plan  shall  affect  the  rights or  obligations  of  holders of options
granted under any other Company stock option plan.

2.   Definitions.

     Whenever used in this Plan, the following  terms will have the meanings set
forth in this paragraph:

     "Board of Directors" means the Board of Directors of the Company.

     "Code" means the U.S. Internal Revenue Code of 1986, as amended.

     "Committee" means the committee described in paragraph 3.

     "Common  Stock" means the common stock,  par value $. 01 per share,  of the
Company.

     "Date of Grant"  means with  respect  to any Option the date the  Committee
approves  the grant of the Option or such later date as may be  specified by the
Committee as the date the option will become effective.

     "Disinterested   Director"   means  a  member   of  the   Board  who  is  a
"disinterested  person"  within  the  meaning  of  Rule  16b-3(d)(3)  under  the
Securities Exchange Act of 1934, or any successor provision.



     "Eligible  Consultant" means a consultant providing services to, and who is
not an employee of, the Company or any of its Subsidiaries.

     "Employee"  means  any  person  employed  by  the  Company  or  any  of its
Subsidiaries (including, without limitation, a person employed by the Company or
any of its Subsidiaries who is also an officer or director of the Company or any
of its Subsidiaries).

     "Exercise Price" means with respect to any Option the price per share which
must be paid upon exercise of the Option.

     "Fair Market  Value" means (i) if the Common Stock is traded in a market in
which actual  transactions are reported,  the mean of the high and low prices at
which the Common  Stock is reported to have traded on the  relevant  date in all
markets  on which  trading in the Common  Stock is  reported,  or if there is no
reported sale of the Common Stock on the relevant  date, the mean of the highest
reported bid price and lowest  reported  asked price for the Common Stock on the
relevant date,  (ii) if the Common Stock is Publicly  Traded but only in markets
in which there is no reporting of actual  transactions,  the mean of the highest
reported bid price and the lowest  reported  asked price for the Common Stock on
the relevant  date,  or (iii) if the Common Stock is not  Publicly  Traded,  the
value of a share of Common  Stock as  determined  by the most  recent  valuation
prepared by an independent expert at the request of the Committee.

     "Incentive  Stock  Option"  means any Option  that at the time of the grant
qualifies and is  designated as an incentive  stock option within the meaning of
Section 422 of the Code.

     "Non-Qualified  Option"  means any Option  that is not an  Incentive  Stock
Option.

     "Option" means any Incentive Stock Option or  Non-Qualified  Option granted
under this Plan.

     "Option  Agreement" means an agreement in such form as may be determined by
he Committee,  executed and delivered by the Company to the holder of any Option
with respect to that Option.

     "Outside  Director"  means  a  member  of the  Board  who is not a  current
employee of the Company (or a related  entity),  is not a former employee who is
receiving   compensation  for  prior  services  (other  than  benefits  under  a
tax-qualified  retirement  plan), was not an officer of the Company at any time,
and is not currently receiving remuneration,  either directly or indirectly,  in
any capacity other than as a director.

     "Plan" means the Cytogen Corporation 1995 Stock Option Plan, as amended.

     "Publicly Traded" means, with respect to any class of stock, that the class
of stock  is  required  to be  registered  under  Section  12 of the  Securities
Exchange  Act of 1934,  as  amended,  or that  stock of that class has been sold
within the preceding 12 months in an underwritten public offering.


                                      B-2


     "Subsidiary"  means any  corporation  that,  at the time in  question  is a
subsidiary  corporation  of the Company  within the meaning of section 424(f) of
the Code.

     "Ten Percent Shareholder" means, with respect to the grant of any Option, a
person who at the Date of Grant is the beneficial owner of stock possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company.

     "Termination  of  Service"  means (a) the time  when the  employee-employer
relationship between an Employee and the Company ceases to exist for any reason,
or (b) the time  when an  officer  who is not also an  Employee  ceases to be an
officer  of the  Company  for any  reason  or (c)  the  time  when  an  Eligible
Consultant  ceases to be such a consultant  for any reason,  including,  but not
limited to, a termination by resignation,  discharge, death, Total Disability or
retirement.  Any leave of absence  taken with the  consent of the  Company for a
period of not more than 90 days shall not be a  Termination  of  Service,  or if
longer,  so long as the  optionee's  right to  reemployment  with the Company is
guaranteed by contract.  If the period of leave exceeds 90 days and if the right
to reemployment  is not guaranteed by contract,  the Termination of Service will
be deemed to occur on the 91st day of the leave.

     "Total Disability" means inability of an Employee or Eligible Consultant to
engage in any substantial gainful activity by reason of a medically determinable
physical or mental  impairment which can be expected to result in death or which
has lasted or can be expected to last for a  continuous  period of not less than
12 months.  All  determinations  as to the date and extent of  disability  of an
Employee or Eligible Consultant will be made by the Committee.

3.   Administration.

     (a) This Plan shall be administered by a Committee, which shall be composed
of not less than two Outside Directors who are also Disinterested Directors. The
Committee  may, from time to time,  adopt or rescind rules and  regulations  for
carrying out the  provisions  and purposes of this Plan.  Subject to the express
provisions  of this  Plan,  the  Committee  shall  have sole  authority,  in its
absolute  discretion,  to  determine  which  officers,  Employees  and  Eligible
Consultants shall receive Options,  the time when Options shall be granted,  the
terms and  provisions of the Options  (which may differ from one another) and to
do  everything  necessary or  appropriate  to administer  this Plan,  including,
without  limitation,  interpreting  the provisions of this Plan and the Options.
All  determinations  made by the  Committee  with  respect  to this Plan and the
Options shall be final, binding and conclusive.


     (b) No member of the  Committee  shall be liable for any act or omission of
the Committee or any other member of the  Committee,  or for any act or omission
on his own part, in connection with the  administration  of this Plan, unless it
resulted from the member's own willful misconduct.


4.   Persons Eligible to Receive Options.

     (a) Options may be granted  under this Plan only to persons who at the Date
of Grant  either (i) are  officers,  Employees  or Eligible  Consultants  of the

                                      B-3

Company  or any of its  Subsidiaries  or (ii) have  agreed  to become  officers,
Employees  or Eligible  Consultants  of the Company or any of its  Subsidiaries,
and, in either  case,  are  determined  by the  Committee  to be of  substantial
importance to the Company or any of its Subsidiaries.

     (b)  Options  granted to persons  who are not yet  officers,  Employees  or
Eligible  Consultants  at the  Date of  Grant  may not be  exercised  until  the
optionee  has become an  officer,  Employee or  Eligible  Consultant,  and shall
expire if the  optionee  fails to commence  service as an  officer,  Employee or
Eligible Consultant within six months (or such other period as the Committee may
determine) after the Date of Grant.

     (c)  Incentive  Stock  Options  may be  granted  only  to  persons  who are
Employees  at the Date of  Grant,  and only on such  terms  as are  provided  in
paragraphs 6, 7 and 8 hereof.

     (d) No Employee or Eligible Consultant to whom Options may be granted under
this Plan may be granted Options to purchase more than 200,000 shares in any one
calendar year.

5.   Stock Subject to the Plan.

     (a)  Subject to any  adjustment  as provided  in  paragraph  9, the maximum
number of shares of Common Stock as to which  Options may be granted  under this
Plan is 4,502,635  shares reduced by the number of outstanding  options  granted
under the Cytogen  Corporation 1989 Employee Stock Option Plan (the "1989 Plan")
that are exercised  after the effective date of this Plan. If any Option expires
or is cancelled or  surrendered  without being  exercised in full, the number of
shares as to which the Option is not exercised  will once again become shares as
to which  new  Options  may be  granted.  The  Common  Stock  which is issued on
exercise of Options may be authorized  but unissued  shares or shares which have
been issued and reacquired by the Company.

     (b) For  administrative  purposes  only, the Committee  shall  establish an
account  indicating the number of shares of Common Stock as to which Options may
then be granted under this Plan (the "Current  Account"),  and the Committee may
issue  Options  only with respect to the shares of Common  Stock  available  for
grant as set forth in the Current Account. The Current Account shall contain the
number of shares available for grant calculated as follows: (a) 4,502,635, minus
(b) the number of shares of Common Stock  subject to options  granted  under the
1989 Plan that are exercised  after the effective  date of this Plan,  minus (c)
the number of shares of Common  Stock  subject to  outstanding  options  granted
under the 1989 Plan and this Plan, plus (d) the number of shares of Common Stock
subject to outstanding options granted under the 1989 Plan and/or this Plan that
expire, are cancelled or surrendered without being exercised in full.

6.   Grants of Options.

     (a) Subject to paragraph 4(d), the Committee will have complete  discretion
to  determine  when,  and to which  officers  or  other  Employees  or  Eligible
Consultants,  Options are to be granted, the number of shares of Common Stock to
which Options granted to each officer or other Employee or Eligible  Consultant,
will relate,  whether and to what extent Options  granted to an officer or other

                                      B-4

Employee  or  Eligible   Consultant,   will  be  Incentive   Stock   Options  or
Non-Qualified  Options and, subject to the provisions of paragraphs 7 and 8, the
Exercise Price and the term of each Option. The Committee may, in its discretion
at the time of granting the Option,  provide that the Exercise Price may be paid
in cash,  by the surrender of Common Stock,  by an  interest-bearing  promissory
note, or by other means; subject, however, to any requirements of applicable law
which may limit the type or amount of such non-cash consideration. If payment by
promissory note is permitted:  (i) the optionee shall be required to make a cash
payment upon exercise of the Option of not less than 20% of the Exercise  Price;
(ii) the note shall provide for full recourse  against the maker;  and (iii) the
note shall be payable in full prior to its stated  maturity upon the  optionee's
Termination of Service for any reason other than death or Total Disability.

     (b) Any Options which are not  designated  as Incentive  Stock Options when
they are granted will be Non-Qualified Options.

     (c)  Promptly  after the Date of Grant of each  Option,  the Company  shall
cause an Option  Agreement  to be executed  and  delivered  to the holder of the
Option.  The Option  Agreement shall clearly state whether the Option granted is
or is not an Incentive Stock Option.  Separate Option  Agreements  shall be used
for Incentive Stock Options and Non-Qualified Stock Options.

     (d) Except as otherwise  determined  by the  Committee,  and subject to the
requirements  of  applicable  law,  the entire  Exercise  Price  received by the
Company upon the exercise of an option shall  constitute  stated  capital to the
extent of the  aggregate  par value of the Common Stock issued upon  exercise of
the Option.

     (e) Any  Option  granted  under  this  Plan  prior  to the date the Plan is
approved by the Company's stockholders shall not be exercisable unless and until
the Plan is so approved.

7.   Option Provisions.

     (a) Exercise Price. No  consideration  shall be payable by any optionee for
the grant of an Option.  Subject to the  provisions  of  paragraph  7(a)(i)  and
paragraph  8, the  Exercise  Price of each Option will be as  determined  by the
Committee.

          (i) The  Committee  shall not grant any Option with an exercise  price
     that is less than 100% of the Fair Market Value of the underlying  stock on
     the date of grant or reduce the exercise  price of any Option granted under
     the Plan.


     (b) Term.  The term of each Option will be as determined by the  Committee,
but in no event  will the term of an Option be  longer  than ten years  from the
Date of Grant, or five years in the case of an Incentive Stock Option granted to
a Ten Percent Shareholder.  Options may not be exercised before six months after
the Date of Grant.  Options will cease to be exercisable prior to the expiration
of their term under certain  circumstances  as provided in paragraphs 7(f), (g),
and (h).  Subject  to the  foregoing,  and to any  vesting  or other  conditions
imposed at the time it is  granted,  an Option may be  exercised  in whole or in
part at any time, or from time to time, during its term.

                                      B-5

     (c) Manner of Exercise.  To exercise an Option,  the person  exercising the
Option must deliver to the Company, at its principal office:

          (i) a notice of exercise,  which states the extent to which the Option
     is being exercised;

          (ii) a certified or bank cashier's check in an amount, or Common Stock
     with a Fair Market Value,  equal to the Exercise  Price of the Option times
     the number of shares as to which it is being exercised, or consideration in
     such other form as may be permitted  under the terms on which the Option is
     granted; and

          (iii) a certified  or bank  cashier's  check equal to any  withholding
     taxes the Company is required to pay because of the exercise of the Option.

     The  Committee  may permit an  Employee,  as an  alternative  to making the
     payment  described in clause (iii),  to authorize the Company to withhold a
     sum equal to the withholding  taxes the Company is required to pay from the
     Employee's  salary  and bonus  payments  over a period of not more than six
     months (or such  longer  period as the Company  may  approve).  The date on
     which the Company  receives all the items specified in this subsection will
     be the date on which the Option is exercised to the extent described in the
     notice of election.

     (d) Delivery of Stock  Certificates.  As promptly as  practicable  after an
Option is  exercised,  the Company will deliver to the person who  exercises the
Option certificates,  registered in that person's name,  representing the number
of shares of Common  Stock which were  purchased  by the exercise of the Option.
Each  certificate  may bear a legend to indicate,  if  applicable,  that (i) the
Common Stock  represented by the certificate  was issued in a transaction  which
was not registered under the Securities Act of 1933, as amended, and may only be
sold or  transferred in a transaction  which is registered  under that Act or is
exempt from the registration requirements of that Act, and (ii) the Common Stock
represented by the certificate is subject to the obligation of the holder to pay
any unpaid balance of the Exercise Price (whether  pursuant to a promissory note
or  otherwise),  and/or  that the  Common  Stock is  pledged  to secure  such an
obligation.

     (e)  Nontransferability  of Options.  During the  lifetime of the person to
whom an Option is issued, the Option may be exercised only by that person or his
or her guardian or legal representative.  An Option may not be assigned, pledged
or  hypothecated  in any way, will not be subject to execution,  and will not be
transferable otherwise than by will or the laws of descent and distribution. The
Company will not recognize any attempt to assign, transfer,  pledge, hypothecate
or otherwise  dispose of an Option  contrary to the  provisions of this Plan, or
any levy of any attachment or similar  process upon any Option,  and,  except as
expressly  stated in this Plan,  the Company  will not be required  to, and will
not,  issue  Common  Stock on exercise of an Option to anyone who claims to have
acquired that Option from the person to whom it was granted.


                                      B-6

     (f)  Termination of Service of Holder of Option Other Than Because of Total
Disability or Death. If there is a Termination of Service of a person to whom an
Option has been  granted,  other than by reason of the  person's  death or Total
Disability,  each  Option  held by the person  may be  exercised  (if  otherwise
exercisable)  until  the  earlier  of (i)  the  end of  the  three-month  period
immediately  following  the  date  of  the  Termination  of  Service,  (ii)  the
expiration  of the term  specified in the Option,  or (iii) such earlier time as
may be determined by the Committee at the time of granting the Option.

     (g) Total  Disability  of Holder of Option.  If there is a  Termination  of
Service of a person to whom an Option  has been  granted by reason of his or her
Total Disability,  each Option held by the person may be exercised (if otherwise
exercisable) until the earlier of (i) the end of the one-year period immediately
following the date of the  Termination  of Service,  (ii) the  expiration of the
term specified in the Option, or (iii) such earlier time as may be determined by
the Committee at the time of granting the Option.

     (h) Death of Holder of Option.  If there is a  Termination  of Service of a
person to whom an Option has been  granted  by reason of his or her death,  or a
former officer or Employee or Eligible Consultant dies following the date of his
or her  Termination  of  Service  but at a time  when an Option  still  would be
exercisable by that person but for the death of the person,  each Option held by
the  person at the time of his or her death may be  exercised  by the  person or
persons  to  whom  the  Option  passed  by will or by the  laws of  descent  and
distribution  (but by no other  persons) until the earlier of (i) the end of the
one-year period immediately following the date of death (or such other period as
may be determined by the Committee at the time of granting the Option), (ii) the
expiration  of the term  specified  in the Option,  or (iii) if the death occurs
after the  Termination  of  Service,  the end of the  period in which the Option
could be exercised under paragraph 7(f) or (g).

     8. Special  Provisions  Relating to Incentive  Stock Options.  No Incentive
Stock  Option may be granted  after March 27,  2005.  The  Exercise  Price of an
Incentive  Stock  Option will be not less than 100% of the Fair Market  Value of
the Common Stock on the Date of Grant of the Option.  An Incentive  Stock Option
may not be granted to a person who, at the time the Option is granted,  is a Ten
Percent  Shareholder,  unless (i) the  Exercise  Price of the Option is at least
110% of the Fair Market  Value of the Common Stock on the Date of Grant and (ii)
the Option by its terms is not  exercisable  after the  expiration of five years
from the Date of Grant.  To the extent  that the  aggregate  Fair  Market  Value
(determined  at the time an  Incentive  Stock  Option is  granted) of the Common
Stock with respect to which Incentive Stock Options are first  exercisable by an
Employee during any calendar year (under this Plan and any other incentive stock
option plans of the Company) exceeds $100,000,  such Options shall be treated as
Non-Qualified  Options.


                                      B-7

9.   Recapitalization.

     (a) The  existence of  outstanding  Options shall not affect in any way the
right or power of the Company or its  stockholders  to make or authorize  any or
all  adjustments,  recapitalizations,  reorganizations  or other  changes in the
Company's capital  structure or its business,  or any merger or consolidation of
the Company,  or any issue of bonds,  debentures,  preferred or prior preference
stock  ahead of or  affecting  the Common  Stock or the rights  thereof,  or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business or any other corporate act or proceeding, whether
of a similar character or otherwise.  Unless otherwise  determined by the Board,
the  issue  by the  Company  of  shares  of stock of any  class,  or  securities
convertible  into  shares of stock of any class,  for cash or  property,  or for
labor or services  either  upon  direct  sale or upon the  exercise of rights or
warrants to subscribe therefor, or on conversion of shares or obligations of the
Company convertible into such shares or other securities,  shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number, class
or price of shares of Common Stock then subject to outstanding Options.

     (b) If as a result of any (i)  reorganization or liquidation of the Company
or (ii)  reclassification of the Company's capital stock, or (iii) consolidation
or merger of the Company  with or into  another  corporation,  or sale of all or
substantially  all the assets of the Company (a reorganization or liquidation of
the Company or  reclassification  of the Company's  capital stock,  or a merger,
consolidation  or  sale  of the  type  described  in  this  subsection  being  a
"Corporate  Transaction")  while an Option is  outstanding,  the  holders of the
Common  Stock become  entitled to receive  with  respect to their Common  Stock,
securities  or assets other than,  or in addition to, their Common  Stock,  upon
exercise of that Option the holder will receive what the holder would have owned
if the  holder  had  exercised  the  Option  immediately  before  the  Corporate
Transaction which occurred while the Option was outstanding and had not disposed
of  anything  the  holder  would  have  received  as a  result  of that  and all
subsequent Corporate Transactions.

10. Rights of Option Holder.

     (a) The holder of an Option  will not have any rights as a  stockholder  by
reason of holding that Option.  Upon  exercise of an Option,  the holder will be
deemed to acquire the rights of a stockholder when, but not before, the issuance
of Common Stock as a result of the exercise is recorded in the stock  records of
the Company.

     (b)  Nothing in this Plan or in the grant of an Option will confer upon any
Employee  the  right  to  continue  in the  employment  of the  Company  or will
interfere with or restrict in any way the rights of the Company to discharge any
Employee at any time for any reason whatsoever,  with or without cause, nor will
it impose any obligation on the Employee to remain in the employ of the Company.


     11. Laws and Regulations. The obligation of the Company to sell and deliver
shares of Common Stock on exercise of Options  will be subject to the  condition
that legal counsel for the Company be satisfied  that the sale and delivery will
not violate the  Securities  Act of 1933,  as amended,  or any other  applicable
laws,  rules or regulations.

                                      B-8

12.  Withholding of Taxes.

     (a) In  addition  to the  requirement  in  paragraph  7(c) that in order to
exercise  an Option a person  must make a payment to the  Company  or  authorize
withholding in order to enable the Company to pay any withholding taxes due as a
result of the  exercise,  if a person who  exercised an  Incentive  Stock Option
disposes of shares of Common Stock acquired  through  exercise of that Incentive
Stock  Option  either  (i)  within  two  years  after  the  Date of Grant of the
Incentive  Stock Option or (ii) within one year after the issuance of the shares
on exercise of the Incentive  Stock  Option,  the person will notify the Company
promptly of the  occurrence of the event and, if the event was a disposition  of
Common  Stock  acquired on exercise of an  Incentive  Stock  Option,  the amount
realized upon the disposition.

     (b) If,  whether  because of a  disposition  of Common  Stock  acquired  on
exercise of an Incentive Stock Option, or otherwise,  the Company is required to
pay withholding  taxes to any Federal,  state or other taxing  authority and the
Employee  fails to  provide  the  Company  with the funds with which to pay that
withholding tax, the Company may withhold up to 50% of each payment of salary or
bonus to the  Employee  (which  will be in  addition  to any other  required  or
permitted  withholding),  until the Company has been  reimbursed  for the entire
withholding tax it was required to pay.

     (c) The  obligations  contained  in  this  paragraph  12  shall  bind  each
optionee,  and each optionee, by accepting and/or exercising an Option, shall be
deemed to agree to observe and comply with them.

     13.  Reservation of Shares. The Company will at all times keep reserved for
issuance  on  exercise  of  Options  a number  of  authorized  but  unissued  or
reacquired  shares of Common  Stock  equal to the  maximum  number of shares the
Company may be required to issue on exercise of outstanding Options (assuming no
subsequent adjustments under paragraph 9).

     14.  Amendment of the Plan. The Board of Directors may at any time and from
time to time modify or amend this Plan in any respect  effective at any date the
Board of  Directors  determines;  provided,  that  without  the  approval of the
stockholders  of the  Company  the Board of  Directors  may not,  (i)  except as
provided in paragraph 9,  increase the maximum  number of shares of Common Stock
which may be issued on exercise of Options  granted under this Plan; (ii) change
the  categories  of persons  eligible to receive  Options;  (iii)  increase  the
per-optionee  limit  specified  in  paragraph  4(d),  (iv) take any other action
requiring the approval of the  stockholders  of the Company in order to maintain
the exemption available under Rule 16b-3 (or any similar rule) of the Securities
and Exchange  Commission,  or (v) modify the provisions of paragraph 7(a)(i). No
modification  or amendment of this Plan will,  without the consent of the holder
of an  outstanding  Option,  adversely  affect the  holder's  rights  under that
Option.

                                      B-9

     15. Interpretation The Committee shall have the power to interpret the Plan
and to make and amend rules for putting it into effect and  administering it. It
is  intended  that the  Incentive  Stock  Options  granted  under the Plan shall
constitute  incentive  stock  options  within the  meaning of section 422 of the
Code,  that the  Non-Qualified  Options  shall  constitute  property  subject to
federal income tax pursuant to the provisions of section 83 of the Code and that
the Plan shall  qualify  for the  exemption  available  under Rule 16b-3 (or any
similar rule) of the  Securities  and Exchange  Commission.  It is also intended
that all  compensation  income  recognized  by  optionees  as the  result of the
exercise of Options or the  disposition  of Common Stock acquired on exercise of
Options shall be considered performance-based  compensation excludable from such
optionee's  "applicable employee  remuneration" pursuant to section 162(m)(4)(C)
of the Code. The provisions of the Plan shall be interpreted and applied insofar
as possible to carry out such intent.

     16.  Termination of the Plan.  This Plan shall  terminate on March 27, 2005
unless sooner  terminated.  The Board of Directors may suspend or terminate this
Plan at any time or from time to time,  but no such action may adversely  affect
the rights of a person holding an outstanding Option.


                                      B-10




                                   APPENDIX C

                              AMENDED AND RESTATED

                                     BY-LAWS






                                  B Y - L A W S

                                       OF

                               CYTOGEN CORPORATION

                            (a Delaware corporation)

                          (amended as of June 19, 2001)


                                    ARTICLE I
                                     OFFICES

     SECTION 1. OFFICES. The corporation shall maintain its registered office in
the State of Delaware at 100 West Tenth Street,  City of  Wilmington,  County of
New Castle and its  resident  agent at such  address  is The  Corporation  Trust
Company.  The  Corporation  may also have  offices in such  other  places in the
United  States or elsewhere as the Board of  Directors  may,  from time to time,
appoint or as the business of the Corporation may require.


                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

     SECTION  1.  ANNUAL  MEETINGS.  Annual  meetings  of  stockholders  for the
election of directors  and for such other  business as may properly be conducted
at such meeting shall be held at such place,  either within or without the State
of Delaware, and at such time and date as the Board of Directors shall determine
by resolution and set forth in the notice of the meeting.  In the event that the
Board of Directors fails to so determine the time, date and place for the annual
meeting,  it shall be held,  beginning in 1981, at the  principal  office of the
Corporation at 10 o'clock A.M. on the last Friday in February of each year.

     SECTION 2.  SPECIAL  MEETINGS.  Special  meetings of  stockholders,  unless
otherwise prescribed by statute, may be called by the Chairman of the Board, the
President or by  resolution of the Board of Directors and shall be called by the
President or Secretary upon the written request of not less than 50% in interest
of the  stockholders  entitled to vote thereat.  Notice of each special  meeting
shall be given in accordance with Section 3 of this Article II. Unless otherwise
permitted by law,  business  transacted at any special  meeting of  stockholders
shall be limited to the purpose stated in the notice.

     SECTION 3.  NOTICE OF  MEETINGS.  Whenever  stockholders  are  required  or
permitted  to take any action at a  meeting,  a written  notice of the  meeting,
which shall state the place, date and time of the meeting, and, in the case of a
special meeting,  the purposes for which the meeting is called,  shall be mailed
to or delivered to each  stockholder  of record  entitled to vote thereat.  Such
notice  shall be given not less than ten (10) days nor more than sixty (60) days
before the date of any such meeting.



     SECTION 4. QUORUM.  Unless otherwise  required by law or the Certificate of
Incorporation,  the  holders of a majority of the issued and  outstanding  stock
entitled  to vote  thereat,  present in person or  represented  by proxy,  shall
constitute  a  quorum  for  the  transaction  of  business  at all  meetings  of
stockholders.

     SECTION  5.  VOTING.  Unless  otherwise  provided  in  the  Certificate  of
Incorporation,  each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder. Upon the request of not less than 10% in
interest of the stockholders  entitled to vote at a meeting,  voting shall be by
written  ballot.  All elections of directors shall be decided by plurality vote.
Unless  otherwise   required  by  law,  these  By-Laws  or  the  Certificate  of
Incorporation,  all other corporate  action shall be decided by majority vote of
the shares cast on the proposed action.

     SECTION  6.  INSPECTORS.  The Board of  Directors  may,  in  advance of any
meeting of  stockholders,  appoint one or more inspectors to act at such meeting
or any adjournment  thereof. If any of the inspectors so appointed shall fail to
appear or act, the chairman of the meeting  shall,  or if  inspectors  shall not
have been  appointed,  the  chairman  of the  meeting  may,  appoint one or more
inspectors.  Each  inspector,  before entering upon the discharge of his duties,
shall take and sign an oath  faithfully  to execute the duties of  inspector  at
such meeting with strict  impartiality and according to the best of his ability.
The  inspectors  shall  determine  the number of shares of capital  stock of the
Corporation  outstanding  and the  voting  power of each,  the  number of shares
represented at the meeting,  the existence of a quorum,  the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the results, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders.
On request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or candidate for the office
of director shall act as an inspector of an election of directors.

     SECTION 7. CHAIRMAN OF MEETINGS.  The Chairman of the Board of Directors of
the  Corporation,  if one is  elected,  or, in his  absence or  disability,  the
President of the Corporation, shall preside at all meetings of the stockholders.

     SECTION 8. SECRETARY OF MEETING. The Secretary of the Corporation shall act
as Secretary at all meetings of the  stockholders.  In the absence or disability
of the Secretary,  the Chairman of the Board of Directors or the President shall
appoint a person to act as Secretary at such meetings.

     SECTION 9. LISTS OF  STOCKHOLDERS.  The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the  meeting,  arranged  in  alphabetical  order,  showing  the  address of each
stockholder  and the number and class of shares held by each. Such list shall be
open to the  examination  of any  stockholder,  for any  purpose  germane to the
meeting, during ordinary business hours, for a period of at least ten days prior


                                      C-2


to the  meeting,  at a place  within the city  where the  meeting is to be held,
which shall be specified in the notice of the meeting,  or, if not so specified,
at the place  where the  meeting is to be held.  The list shall also be produced
and kept at the meeting and may be inspected by any stockholder who is present.

     SECTION  10.  ACTION  WITHOUT  MEETING.  Unless  otherwise  provided by the
Certificate  of  Incorporation,  any action  required  by law to be taken at any
annual or special meeting of  stockholders,  or any action which may be taken at
such meetings, may be taken without a meeting,  without prior notice and without
a vote,  if a consent in writing,  setting  forth the action so taken,  shall be
signed by the  holders of  outstanding  stock  having not less than the  minimum
number of votes that would be  necessary  to  authorize or take such action at a
meeting at which all shares  entitled  to vote were  present  and voted.  Prompt
notice of the  taking of the  corporate  action  without a meeting  by less than
unanimous  written  consent  shall be given to those  stockholders  who have not
consented in writing.

     SECTION 11. ADJOURNMENT. At any meeting of stockholders of the Corporation,
if less than a quorum be  present,  a majority of the  stockholders  entitled to
vote thereat, present in person or by proxy, shall have the power to adjourn the
meeting from time to time without notice other than  announcement at the meeting
until a quorum shall be present. Any business may be transacted at the adjourned
meeting which might have been transacted at the meeting originally  noticed.  If
the  adjournment is for more than thirty days, or if after the adjournment a new
record  date,  as provided  for in Section 5 of Article V of these  By-Laws,  is
fixed for the  adjourned  meeting,  a notice of the  adjourned  meeting shall be
given to each stockholder of record entitled to vote at the meeting.

                                  ARTICLE III
                               BOARD OF DIRECTORS

     SECTION 1. POWERS.  The property,  business and affairs of the  Corporation
shall be managed  and  controlled  by its Board of  Directors.  The Board  shall
exercise all of the powers and duties conferred by law except as provided by the
Certificate of Incorporation or these By-Laws.

     SECTION 2. NUMBER AND TERM.  The number of  directors  shall be fixed at no
less than two nor more than seven. Within the limits specified above, the number
of  directors  shall be  fixed  from  time to time by the  Board.  The  Board of
Directors shall be elected by the stockholders at their annual meeting, and each
director  shall be  elected  to serve  for the  term of one year and  until  his
successor  shall be elected  and  qualify or until his  earlier  resignation  or
removal. Directors need not be stockholders.

     SECTION  3.  RESIGNATIONS.  Any  director  may  resign  at any  time.  Such
resignation  shall  be made in  writing,  and  shall  take  effect  at the  time
specified  therein,  and if no time is specified,  at the time of its receipt by
the  President  or  Secretary.  The  acceptance  of a  resignation  shall not be
necessary to make it effective.


                                      C-3


     SECTION 4.  REMOVAL.  Any director or the entire Board of Directors  may be
removed either for or without cause at any time by the  affirmative  vote of the
holders  of a  majority  of the  shares  entitled  to vote for the  election  of
directors at any annual or special meeting of the  stockholders  called for that
purpose. Vacancies thus created may be filled at such meeting by the affirmative
vote of a majority of the  stockholders  entitled to vote,  or, if the vacancies
not so filled, by the directors as provided in Section 5 of this Article III.

     SECTION 5. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Except as provided in
Section 4 of this Article III, vacancies occurring in any directorship and newly
created directorship may be filled by a majority vote of the remaining directors
then in office.  Any director so chosen shall hold office for the unexpired term
of his predecessor and until his successor shall be elected and qualify or until
his earlier death,  resignation  or removal.  The Board may not fill the vacancy
created by removal of a director by electing the director so removed.

     SECTION 6.  MEETINGS.  The newly elected  directors  shall hold their first
meeting to organize  the  Corporation,  elect  officers  and  transact any other
business  which may properly come before the meeting.  An annual  organizational
meeting of the Board of Directors  shall be held  immediately  after each annual
meeting of the stockholders, or at such time and place as may be noticed for the
meeting. Regular meetings of the Board may be held without notice at such places
and  times  as  shall  be  determined  from  time to time by  resolution  of the
directors.  Special meetings of the Board shall be called by the President or by
the  Secretary on the written  request of any  director  with at least two days'
notice to each  director and shall be held at such place as may be determined by
the directors or as shall be stated in the notice of the meeting.

     SECTION 7. QUORUM,  VOTING AND ADJOURNMENT.  A majority of the total number
of  directors  or any  committee  thereof  shall  constitute  a  quorum  for the
transaction  of business.  The vote of a majority of the directors  present at a
meeting  at which a quorum  is  present  shall be the act of the  Board.  In the
absence of a quorum,  a majority of the  directors  present  thereat may adjourn
such meeting to another time and place.  Notice of such  adjourned  meeting need
not be given if the time and place of such  adjourned  meeting are  announced at
the meeting so adjourned.

     SECTION 8. COMMITTEES.  The Board of Directors may, by resolution passed by
a majority of the Board,  designate  one or more  committees,  including but not
limited to an Executive Committee and an Audit Committee, each such committee to
consist  of one or more of the  directors  of the  Corporation.  The  Board  may
designate one or more directors as alternate members of any committee to replace
any absent or  disqualified  member at any  meeting of the  committee.  Any such
committee, to the extent provided in the resolution of the Board, shall have and
may  exercise  all the powers and  authority  of the Board of  Directors  in the
management of the business and, affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority to amend the Certificate of

                                      C-4

Incorporation,  adopt an agreement of merger or consolidation,  recommend to the
stockholders  the sale,  lease, or exchange of all or  substantially  all of the
Corporation's properties and assets, recommend to the stockholders a dissolution
of the  Corporation  or a revocation of a dissolution or to amend these By-Laws.
Unless a resolution of the Board  expressly  provides,  no such committee  shall
have the power or authority  to declare a dividend or to authorize  the issuance
of stock of the  Corporation.  All  committees  of the Board shall  report their
Proceedings to the Board when recruited.

     SECTION 9. ACTION  WITHOUT A MEETING.  Unless  otherwise  restricted by the
Certificate of Incorporation or these By-Laws,  any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken  without a meeting  if all  members  of the Board or any  committee
thereof consent thereto in writing.

     SECTION 10.  COMPENSATION.  The Board of Directors shall have the authority
to fix the  compensation  of directors for their  services.  A director may also
serve the  Corporation in other  capacities and receive  compensation  therefor.
SECTION 11. TELEPHONIC MEETING.  Unless otherwise  restricted by the Certificate
of  Incorporation,  members of the Board,  or any  committee  designated  by the
Board, may participate in a meeting by means of conference  telephone or similar
communications  equipment in which all persons  participating in the meeting can
hear each other.  Participation in such telephonic  meeting shall constitute the
presence in person at such meeting.


                                   ARTICLE IV
                                    OFFICERS

     SECTION 1. The officers of the  Corporation  shall  include a President,  a
Secretary and one or more subordinate officers,  all of whom shall be elected by
the Board of  Directors  and who shall  hold  office  for a term of one year and
until  their   successors  are  elected  and  qualify  or  until  their  earlier
resignation or removal. In addition, the Board of Directors may elect a Chairman
of the  Board,  one  or  more  Vice  Presidents,  including  an  Executive  Vice
President,  a Treasurer  and one or more  Assistant  Treasurers  and one or more
Assistant  Secretaries,  who shall  hold  their  office for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of  Directors.  The initial  officers  shall be elected at the
first  meeting  of the  Board  of  Directors  and,  thereafter,  at  the  annual
organizational  meeting  of the Board  held  after  each  annual  meeting of the
stockholders. Any number of offices may be held by the same person.

     SECTION 2. OTHER  OFFICERS AND AGENTS.  The Board of Directors  may appoint
such  other  officers  and  agents as it deems  advisable,  who shall hold their
office for such terms and shall  exercise  and perform such powers and duties as
shall be determined from time to time by the Board of Directors.

     SECTION 3.  CHAIRMAN.  The  Chairman of the Board of  Directors  shall be a
member of the Board and shall  preside at all meetings of the Board of Directors
and of the stockholders.  In addition, the Chairman of the Board shall have such
powers and perform such other duties as from time to time may be assigned to him
by the Board of Directors.

     SECTION 4. PRESIDENT. The President shall be the Chief Executive Officer of
the  Corporation.  He shall exercise such duties as  customarily  pertain to the
office of  President  and Chief  Executive  Officer,  and shall have general and
active  management  of the  property,  business and affairs of the  Corporation,
subject to the supervision and control of the Board. He shall perform such other
duties as prescribed from time to time by the Board or these By-Laws.

                                      C-5


     In the absence,  disability or refusal of the Chairman of the Board to act,
or the vacancy of such office,  the  President  shall preside at all meetings of
the stockholders and of the Board of Directors. Except as the Board of Directors
shall  otherwise  authorize,  the President  shall execute bonds,  mortgages and
other  contracts  on behalf of the  Corporation,  and shall cause the seal to be
affixed to any instrument  requiring it and, when so affixed,  the seal shall be
attested by the  signature  of the  Secretary  or the  Treasurer or an Assistant
Secretary or an Assistant Treasurer.

     SECTION 5. VICE  PRESIDENTS.  Each Vice President,  if any are elected,  of
whom one or more may be designated an Executive Vice President,  shall have such
powers  and  shall  perform  such  duties  as  shall be  assigned  to him by the
President or the Board of Directors.

     SECTION 6.  TREASURER.  The  Treasurer  shall have custody of the corporate
funds,  securities,  evidences  of  indebtedness  and  other  valuables  of  the
Corporation  and  shall  keep  full  and  accurate   accounts  of  receipts  and
disbursements in books belonging to the Corporation. He shall deposit all moneys
and other  valuables  in the name and to the credit of the  Corporation  in such
depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation, taking proper vouchers therefor. He shall
render to the President and Board of Directors,  upon their request, a report of
the  financial  condition  of the  Corporation.  If  required  by the  Board  of
Directors,  he shall give the  Corporation a bond for the faithful  discharge of
his duties in such amount and with such surety as the Board shall prescribe.

     The Treasurer  shall have such further powers and perform such other duties
incident to the office of Treasurer as from time to time  assigned to him by the
Board.

     SECTION  7.  SECRETARY.  The  Secretary  shall be the Chief  Administrative
Officer of the Corporation  and shall:  (a) cause minutes of all meetings of the
stockholders  and  directors  to be  recorded  and kept;  (b) cause all  notices
required by these  By-Laws or otherwise to be given  properly;  (c) see that the
minute books, stock books, and other nonfinancial  books,  records and papers of
the  Corporation  are kept  properly;  and (d)  cause all  reports,  statements,
returns,  certificates  and other documents to be prepared and filed when and as
required.  The Secretary  shall have such further  powers and perform such other
duties as prescribed from time to time by the Board.

     SECTION 8. ASSISTANT TREASURERS AND ASSISTANT  SECRETARIES.  Each Assistant
Treasurer and each Assistant Secretary, if any are elected, shall be vested with
all the Powers and shall perform all the duties of the Treasurer and  Secretary,
respectively,  in the absence or disability of such officer, unless or until the
Board of' Directors shall otherwise determine. In addition, Assistant Treasurers
and Assistant  Secretaries  shall have such powers and shall perform such duties
as shall be assigned to them by the Board.

     SECTION 9. CORPORATE FUNDS AND CHECKS.  The funds of the Corporation  shall
be kept in such  depositories  as shall from time to time be  prescribed  by the
Board of Directors. All checks or other orders for the payment of money shall be
signed by the  President  or the  Treasurer or such other person or agent as may
from time to time be authorized and with such  countersignature,  if any, as may
be required by the Board of Directors.

                                      C-6

     SECTION 10. CONTRACTS AND OTHER DOCUMENTS.  The President or Treasurer,  or
such other  officer or  officers as may from time to time be  authorized  by the
Board of  Directors,  shall  have  power to sign and  execute  on  behalf of the
Corporation  deeds,  conveyances and contracts,  and any and all other documents
requiring execution by the Corporation.

     SECTION 11. OWNERSHIP OF STOCK OF ANOTHER CORPORATION. The President or the
Treasurer, or such other officer or agent as shall be authorized by the Board of
Directors, shall have the power and authority, on behalf of the Corporation,  to
attend and to vote at any meeting of  stockholders  of any  corporation in which
the Corporation holds stock and may exercise, on behalf of the corporation,  any
and all of the rights and powers  incident  the  ownership  of such stock at any
such meeting, including authority to execute and deliver proxies and consents on
behalf of the corporation.

     SECTION 12. DELEGATION OF DUTIES. In the absence,  disability or refusal of
any officer to exercise  and perform  his  duties,  the Board of  Directors  may
delegate to another officer such powers or duties.

     SECTION 13. RESIGNATION AND REMOVAL.  Any officer of the Corporation may be
removed from office for or without  cause at any time by the Board of Directors.
Any officer may resign at any time in the same manner prescribed under Section 3
of Article III of these By-laws.

     SECTION  14.  VACANCIES.  The Board of  Directors  shall have power to fill
vacancies occurring in any office.


                                    ARTICLE V
                                      STOCK

     SECTION 1. CERTIFICATES OF STOCK.  Every holder of stock in the Corporation
shall  be  entitled  to have a  certificate  signed  by,  or in the  name of the
Corporation  by, the Chairman of the Board or the President or a Vice  President
and by the Treasurer or an Assistant  Treasurer or the Secretary or an Assistant
Secretary, certifying the number and class of shares of stock in the Corporation
owned  by  him.  Any  or  all of the  signatures  on  the  certificate  may be a
facsimile.  The Board of  Directors  shall have the power to appoint one or more
transfer   agents  and/or   registrars  for  the  transfer  or  registration  of
certificates  of stock of any class,  and may require stock  certificates  to be
countersigned  or  registered  by one or  more of such  transfer  agents  and/or
registrars.

     SECTION 2. TRANSFER OF SHARES.  Shares of stock of the Corporation shall be
transferable  upon its books by the holders thereof,  in person or by their duly
authorized attorneys or legal representatives, upon surrender to the Corporation
by delivery  thereof to the person in charge of the stock and transfer books and
ledgers.  Such  certificates  shall  be  cancelled  and new  certificates  shall

                                      C-7


thereupon  be issued.  A record  shall be made of each  transfer.  Whenever  any
transfer of shares shall be made for collateral security, and not absolutely, it
shall be so expressed in the entry of the transfer if, when the certificates are
presented,  both the transferor and transferee request the Corporation to do so.
The Board shall have power and authority to make such rules and  regulations  as
it may deem necessary or proper concerning the issue,  transfer and registration
of certificates for shares of stock of the corporation.

     SECTION 3. LOST  CERTIFICATES.  A new certificate of stock may be issued in
the place of any certificate  previously  issued by the Corporation,  alleged to
have been lost, stolen,  destroyed or mutilated, and the Board of Directors may,
in their  discretion,  require  the owner of such  lost,  stolen,  destroyed  or
mutilated  certificate,  or his legal representative,  to give the Corporation a
bond, in such sum as the Board may direct, not exceeding double the value of the
stock, in order to indemnify the Corporation against any claims that may be made
against it in connection therewith.

     SECTION 4.  STOCKHOLDERS OF RECORD.  The  Corporation  shall be entitled to
treat the  holder  of  record  of any  share or  shares  of stock as the  holder
thereof,  in fact,  and shall not be bound to recognize  any  equitable or other
claim to or interest in such shares on the part of any other person,  whether or
not it shall have express or other notice thereof, except as otherwise expressly
provided by law.

     SECTION 5.  STOCKHOLDERS  RECORD DATE.  In order that the  Corporation  may
determine  the  stockholders  entitled to notice of or to vote at any meeting of
stockholders  or any  adjournment  thereof,  or to express  consent to corporate
action in  writing  without a meeting,  or  entitled  to receive  payment of any
dividend  or other  distribution  or  allotment  of any  rights,  or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful  action,  the Board of  Directors  may fix a
record  date,  which  shall not be more than  sixty  days nor less than ten days
before the date of such  meeting.  A  determination  of  stockholders  of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting,  provided,  however, that the Board of Directors may
fix a new record date for the adjourned meeting.

     SECTION 6.  DIVIDENDS.  Subject to the  provisions  of the  Certificate  of
Incorporation, the Board of Directors may at any regular or special meeting, out
of funds legally  available  therefor,  declare  dividends upon the stock of the
Corporation.  Before the declaration of any dividend, the Board of Directors may
set apart, out of any funds of the Corporation available for dividends, such sum
or sums as from  time to time in  their  discretion  may be  deemed  proper  for
working  capital or as a reserve  fund to meet  contingencies  or for such other
purposes as shall be deemed conducive to the interests of the Corporation.

                                   ARTICLE VI
                           NOTICE AND WAIVER OF NOTICE

     SECTION 1. NOTICE.  Whenever any written  notice is required to be given by
law, the Certificate of Incorporation or these By-Laws,  such notice, if mailed,
shall be deemed to be given when  deposited in the United  States mail,  postage

                                      C-8

prepaid,  addressed  to the person  entitled to such notice at his address as it
appears on the books and  records of the  Corporation.  Such  notice may also be
sent by telegram.

     SECTION 2.  WAIVER OF NOTICE.  Whenever  notice is  required to be given by
law, the Certificate of Incorporation or these By-laws, a written waiver thereof
signed by the person entitled to notice, whether before or after the time stated
therein,  shall be deemed  equivalent  to  notice.  Attendance  of a person at a
meeting  shall  constitute a waiver of notice of such  meeting,  except when the
person attends a meeting for the express purpose of objecting,  at the beginning
of the meeting,  to the  transaction of any business  because the meeting is not
lawfully  called or convened.  Neither the business to be transacted at, nor the
purpose  of,  any  meeting  of the  stockholders,  directors,  or  members  of a
committee of the Board need be specified in any written waiver of notice.


                                  ARTICLE VII
                              AMENDMENT OF BY-LAWS

     SECTION 1.  AMENDMENTS.  These  By-Laws  may be amended or  repealed or new
By-Laws  may be adopted by the  affirmative  vote of a majority  of the Board of
Directors  at any  regular  or  special  meeting  of the  Board.  If any  By-Law
regulating an impending election of directors is adopted, amended or repealed by
the  Board,  there  shall be set  forth in the  notice  of the next  meeting  of
shareholders for the election of directors the By-Law(s) so adopted, amended, or
repealed, together with a precise statement of the changes made. By-Laws adopted
by  Board  of   Directors   may  be  amended  or   repealed   by   stockholders.
Notwithstanding  the  foregoing to the  contrary,  the  provisions  of Article X
hereof may not be further amended or repealed  without the  affirmative  vote of
the  holders of a  majority  of the  shares of common  stock of the  Corporation
present and entitled to vote at a duly convened  meeting of the  stockholders of
the Corporation.


                                  ARTICLE VIII

     SECTION 1. The seal of the Corporation  shall be circular in form and shall
have the name of the corporation on the  circumference  and the jurisdiction and
year of incorporation in the center.

     SECTION 2. FISCAL  YEAR.  The fiscal year of the  Corporation  shall end on
September 30 of each year, or such other twelve  consecutive months as the Board
of Directors may designate.


                                   ARTICLE IX
                                 INDEMNIFICATION

     SECTION 1. A director of the Corporation  shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director,  except for liability  (i) for any breach of the  director's
duty  of  loyalty to  the Corporation or  its stockholders, (ii) for  acts  or

                                      C-9

omissions not in good faith or which involve intentional misconduct or a knowing
violation of law,  (iii) under Section 174 of the Delaware  General  Corporation
Law, or (iv) for any  transaction  from which the  director  derived an improper
personal benefit.

     SECTION 2. Each  person who has or is made a party or is  threatened  to be
made a party to or is involved in any action, suit or proceeding, whether civil,
criminal,  administrative  or  investigative  (hereinafter a  "proceeding"),  by
reason  of the fact  that he or she,  or a person of whom he or she is the legal
representative,  is or  was a  director,  officer,  employee  or  agent  of  the
Corporation  or is or  was  serving  at the  request  of  the  Corporation  as a
director, officer, employee or agent of another corporation or of a partnership,
joint  venture,  trust or other  enterprise,  including  service with respect to
employee  benefit plans,  whether the basis of such proceeding is alleged action
or inaction in an official capacity as a director, officer, employee or agent or
in any other capacity while serving as a director,  officer,  employee or agent,
shall be indemnified  and held harmless by the Corporation to the fullest extent
permitted by the  Delaware  General  Corporation  Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment  permits the Corporation to provide broader  indemnification
rights  than  said  law  permitted  the  Corporation  to  provide  prior to such
amendment),  against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in  settlement)  reasonably  incurred or  suffered by such person in  connection
therewith and such indemnification  shall continue as to a person who has ceased
to be a director,  officer,  employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators;  provided, however, that, except
as provided in this Section 2, the  Corporation  shall indemnify any such person
seeking  indemnification  in  connection  with a  proceeding  (or part  thereof)
initiated  by  such  person  only if  such  proceeding  (or  part  thereof)  was
authorized  by  the  Board  of  Directors  of  the  Corporation.  The  right  to
indemnification  conferred in this Section 2 shall be a contract right and shall
include  the  right  to be paid by the  Corporation  the  expenses  incurred  in
defending any such proceeding in advance of its final  disposition as authorized
by the Board of  Directors;  provided,  however,  that if the  Delaware  General
Corporation  Law so  requires,  the  payment  of  such  expenses  incurred  by a
director,  officer,  employee or agent of the Company in his or her  capacity as
such in advance of the final disposition of a proceeding shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such director,
officer,  employee or agent of the Company,  to repay all amounts so advanced if
it shall ultimately be determined that such director, officer, employee or agent
of the  Company  is not  entitled  to be  indemnified  under  this  Section 2 or
otherwise.

     SECTION  3. If a claim  under  Section 2 of this  Article IX is not paid in
full by the  Corporation  within 30 days after a written claim has been received
by the  Corporation,  the claimant may at any time thereafter bring suit against
the  Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part,  the claimant shall be entitled to be paid also the expense of
prosecuting  such claim. It shall be a defense to any such action (other than an
action  brought  to  enforce a claim for  expenses  incurred  in  defending  any
proceeding in advance of its final disposition  where the required  undertaking,
if any is required,  has been tendered to the Corporation) that the claimant has
not met the standard of conduct  which makes it  permissible  under the Delaware
General  Corporation  Law for the  Corporation to indemnify the claimant for the
amount  claimed, but  the burden  of proving  such  defense shall  be on  the

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Corporation.  Neither the  failure of the  Corporation  (including  its Board of
Directors,  independent  legal  counsel,  or its  stockholders  to  have  made a
determination  prior to the commencement of such action that  indemnification of
the  claimant  is  proper  in the  circumstances  because  he or she has met the
applicable  standard of conduct set forth in the  Delaware  General  Corporation
Law, nor an actual  determination  by the  Corporation  (including  its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption  that the claimant has not met the  applicable  standard of
conduct.

     SECTION  4. The  right  to  indemnification  and the  payment  of  expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this  Article IX shall not be  exclusive  of any other right which any person
may have or hereafter acquire under any statute, provision of the Certificate of
Incorporation,  these By-Laws,  agreement, vote of stockholders or disinterested
directors or otherwise.

     SECTION 5. The  Corporation  may maintain  insurance,  at its  expense,  to
protect itself and any director,  officer,  employee or agent of the Corporation
or another corporation,  partnership,  joint venture,  trust or other enterprise
against any such  expense,  liability  or loss,  whether or not the  corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.


                                    ARTICLE X
                                  MISCELLANEOUS

     SECTION 1. STOCK OPTIONS.  The  Corporation may not grant any stock options
having an exercise  price that is less than 100% of the fair market value of the
underlying  stock on the date of grant.  Furthermore,  the  Corporation  may not
reduce the exercise  price of any stock option  granted under any existing stock
option  plan or under  any stock  option  plan  adopted  after the date of these
amended By-Laws.

     SECTION 2.  CONVERTIBLE  SECURITIES.  The Corporation may not sell or issue
any security of the Corporation  convertible,  exercisable or exchangeable  into
shares of common  stock of the  Corporation,  having a  conversion,  exercise or
exchange  price per share which is subject to downward  adjustment  based on the
market price of the common stock at the time of conversion, exercise or exchange
of such security into common stock (except for appropriate  adjustments  made to
give effect to any stock splits or stock dividends).

     SECTION  3. SALE OF STOCK.  The  Corporation  may not enter  into:  (a) any
equity line or similar  agreement or  arrangement;  or (b) any agreement to sell
common stock of the  Corporation  (or any security  convertible,  exercisable or
exchangeable  into shares of common stock ("Common Stock  Equivalent")) at a per
share price (or,  with respect to a Common Stock  Equivalent,  at a  conversion,
exercise or exchange  price,  as the case may be  ("Equivalent  Price")) that is
fixed after the  execution  date of the  agreement,  whether or not based on any
predetermined  price-setting formula or calculation method.  Notwithstanding the


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foregoing, however, a price protection clause shall be permitted in an agreement
for sale of Common Stock or Common Stock Equivalent, if such clause provides for
an  adjustment  to the price per share of Common  Stock or,  with  respect  to a
Common Stock  Equivalent,  to the Equivalent  Price (provided that such price or
Equivalent Price is fixed on or before the execution date of the  agreement)(the
"Fixed Price") in the event that the Corporation, during the period beginning on
the date of the  agreement  and ending no later  than 90 days after the  closing
date of the transaction, sells shares of Common Stock or Common Stock Equivalent
to another  investor at a price or Equivalent  Price,  as the case may be, below
the Fixed Price.


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