Exhibit 10.12

 

Summary of 2006 Compensation for

Executive Officers, Non-Executive Chairman and Non-Employee Directors

 

Executive Officer Compensation

 

In January 2006, the Board of Directors of PRAECIS PHARMACEUTICALS INCORPORATED
(the “Company”), upon recommendation of the Compensation Committee, approved the
2006 compensation for the Company’s executive officers. The table below sets
forth 2006 compensation and potential bonus award values under the Company’s
Executive Management Bonus Plan (the “Bonus Plan”).

 

 

Name and Title

 

Annual
Salary (1)

 

Bonus Target
Award Value (2)

 

Kevin F. McLaughlin
President and Chief Executive Officer

 

$

368,550

 

50

%

Edward C. English
Vice President, Chief Financial Officer, Treasurer and Assistant Secretary

 

$

219,000

 

25

%

Marc B. Garnick, M.D.
Executive Vice President and Chief Medical and Regulatory Officer

 

$

350,000

 

30

%

Richard W. Wagner, Ph.D.
Executive Vice President, Discovery Research

 

$

285,000

 

30

%

 

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(1)                                  Effective as of January 1, 2006.

(2)                                  Represents the target award value for 2006,
as a percentage of base salary, approved by the Compensation Committee for each
executive officer under the Bonus Plan. Actual bonuses earned for 2006 may vary
from zero to 150% of the target amount, depending upon the Company’s 2006
performance relative to predetermined corporate performance measures, as well as
the performance of each executive officer against predetermined individual
goals.

 

None of the Company’s executive officers has an employment agreement and the
executive compensation described above has been or will be (with respect to
actual bonus payments for 2006) approved by the Board of Directors, upon
recommendation of the Compensation Committee, but is not otherwise set forth in
a written agreement between the Company and such executive officers.

 

Each executive officer is a party to a letter agreement with the Company
providing for certain benefits in the event of the executive’s termination upon
or within one year following a change of control of the Company. These
agreements are filed as exhibits to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2005 and will be described in more detail under
“Employment Agreements/Change of Control Arrangements” in the Company’s Proxy
Statement for its 2006 Annual Meeting of Stockholders.

 

Each executive officer may also be eligible for an annual option grant to
purchase shares of common stock, par value $.01 per share, of the Company.
Annual option grants for executive officers vest and become exercisable over a
four-year period, with 25% vesting on the first

 

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anniversary of the grant date and thereafter on a monthly basis, if the
executive officer is then employed by the Company. The amount of such annual
grants, if any, will be dependent upon corporate and individual performance
during 2006.

 

The executive officers are also eligible to participate in the Company’s
employee benefit plans, which include health, dental, life and long-term
disability insurance; three weeks of vacation per year; twelve statutory/
Company designated holidays each year; and the ability to participate in the
Company’s 401(k) Plan and Employee Stock Purchase Plan.

 

Non-Executive Chairman Compensation

 

Malcolm L. Gefter, Ph.D. serves as the Chairman of the Board of Directors, in a
non-executive capacity, and as the Company’s Chief Scientific Officer. As Chief
Scientific Officer, Dr. Gefter’s 2006 compensation is $200,000, which is
unchanged from 2005. He is not eligible for an annual cash bonus under the Bonus
Plan or otherwise. There is no employment agreement with Dr. Gefter, and his
compensation has been approved by the Board of Directors, upon recommendation of
the Compensation Committee, but is not otherwise set forth in a written
agreement. Dr. Gefter is a party to a letter agreement with the Company
providing for certain benefits in the event of his termination upon or within
one year following a change of control of the Company. This agreement is filed
as an exhibit to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2005 and will be described in more detail under “Employment
Agreements/Change of Control Arrangements” in the Company’s Proxy Statement for
its 2006 Annual Meeting of Stockholders. Dr. Gefter may also be eligible for an
annual option grant to purchase shares of common stock, par value $.01 per
share, of the Company. Annual option grants for Dr. Gefter will vest and become
exercisable in equal monthly installments over a one-year period from the date
of grant so long as he is an employee of the Company and/or serves on the Board
of Directors.

 

Dr. Gefter is also eligible to participate in the Company’s employee benefit
plans described above.

 

Non-Employee Director Compensation

 

For 2006, non-employee directors will receive the following annual compensation,
which has been approved by the Company’s Board of Directors and remains
unchanged from 2005:

 

Cash Compensation

 

•                  Annual Retainer of $15,000.

 

•                  $1,500 for each regularly scheduled board meeting.

 

•                  $1,000 for each regularly scheduled committee meeting.

 

•                  $500 for any special telephonic Board or committee meeting.

 

•                  The Chairman of the Audit Committee receives a per-meeting
fee of $1,000 for his attendance and participation in, on behalf of the Audit
Committee, meetings with the Company’s management and Ernst and Young LLP, the
Company’s independent registered public accounting firm, regarding the Company’s
financial results and other financial and accounting matters.

 

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•                  Reimbursement for reasonable expenses incurred in connection
with attending board and committee meetings.

 

Stock Compensation

 

Directors are eligible to receive stock options under our Third Amended and
Restated 1995 Stock Plan. Non-employee directors receive an annual option grant
which vests and becomes exercisable in equal monthly installments over a
one-year period from the date of grant so long as the individual continues to be
a member of our Board of Directors.

 

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