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

  	
  %

  



 






(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


 

















 


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.


 

















 


•                  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.