TPTX » Topics » Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers.

This excerpt taken from the TPTX 8-K filed Jul 28, 2009.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers.

On July 27, 2009, as part of the execution of the Merger Agreement by TorreyPines, each director of TorreyPines has agreed to resign as a director contingent upon the closing of the Merger as described in Item 1.01 above. The effective date of such resignations has not yet been set.


Employment Agreements

Ev Graham

On July 27, 2009, TPTX, Inc., a Delaware corporation and wholly-owned subsidiary of TorreyPines (“TPTX”), entered into a second amended and restated employment agreement with our Chief Executive Officer, Evelyn Graham. The second amended and restated employment agreement amends and restates the previously disclosed employment agreement between TorreyPines, TPTX and Ms. Graham dated September 1, 2008, as amended February 3, 2009. This second amended and restated employment agreement was entered into in connection with the Merger and will become effective only upon the closing of the Merger. Upon effectiveness, if the Merger closes, this second amended and restated employment agreement shall replace and supersede all prior employment agreements between Ms. Graham and TPTX and/or TorreyPines.

This second amended and restated agreement, once effective, will remain effective through February 28, 2010 and may be terminated by Ms. Graham or TPTX at any time, with or without cause. Ms. Graham’s second amended and restated employment agreement reflects her current annual base salary of $350,000. The agreement does not provide for any annual bonus or vacation.

Pursuant to the terms of Ms. Graham’s second amended and restated employment agreement, in the event that Ms. Graham is terminated for any reason, Ms. Graham will be entitled to continue to receive her base salary through February 28, 2010.

In addition, if, following the effective time of Ms. Graham’s second amended and restated employment agreement and prior to February 28, 2010, TPTX (i) sells to a third party buyer any equity securities of TPTX and the proceeds from such sale are used primarily for the development of TPTX’s product designated NGX426, (ii) completes a change of control transaction or (iii) enters into a partnership, option, or similar arrangement and such sale or equivalent transaction as described in clauses (i), (ii) or (iii) above is approved by TPTX and is for aggregate cash consideration (net of all costs and expenses associated with the sale) received by TPTX on or before February 28, 2010 of not less than $10 million, then promptly following the closing of such sale or equivalent transaction, (A) TPTX shall pay to Ms. Graham an amount equal to (a) 3.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (b) 41%, and (B) TorreyPines shall pay to Ms. Graham an amount equal to (x) 2.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (y) 41%.

The foregoing description of Ms. Graham’s second amended and restated employment agreement is not complete and is qualified in its entirety by reference to a copy of Ms. Graham’s second amended and restated employment agreement filed as Exhibit 10.1 to this Form 8-K, the contents of which are incorporated herein by reference.


Craig Johnson

On July 27, 2009, TPTX entered into a second amended and restated employment agreement with our Chief Financial Officer, Craig Johnson. The second amended and restated employment agreement amends and restates the previously disclosed employment agreement between TorreyPines, TPTX and Mr. Johnson dated November 12, 2008, as amended February 3, 2009. This second amended and restated employment agreement was entered into in connection with the Merger and will become effective only upon the closing of the Merger. Upon effectiveness, if the Merger closes, this second amended and restated employment agreement shall replace and supersede all prior employment agreements between Mr. Johnson and TPTX and/or TorreyPines.

This second amended and restated agreement, once effective, will remain effective through February 28, 2010 and may be terminated by Mr. Johnson or TPTX at any time, with or without cause. Mr. Johnson’s second amended and restated employment agreement reflects his current annual base salary of $282,000. The agreement does not provide for any annual bonus or vacation.

Pursuant to the terms of Mr. Johnson’s second amended and restated employment agreement, in the event that Mr. Johnson is terminated for any reason, Mr. Johnson will be entitled to continue to receive his base salary through February 28, 2010.

In addition, if, following the effective time of Mr. Johnson’s second amended and restated employment agreement and prior to February 28, 2010, TPTX (i) sells to a third party buyer any equity securities of TPTX and the proceeds from such sale are used primarily for the development of TPTX’s product designated NGX426, (ii) completes a change of control transaction or (iii) enters into a partnership, option, or similar arrangement and such sale or equivalent transaction as described in clauses (i), (ii) or (iii) is approved by TPTX and is for aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX on or before February 28, 2010 of not less than $10 million, then promptly following the closing of such sale or equivalent transaction, (A) TPTX shall pay to Mr. Johnson an amount equal to (a) 3.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (b) 33%, and (B) TorreyPines shall pay to Mr. Johnson an amount equal to (x) 2.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (y) 33%.

The foregoing description of Mr. Johnson’s second amended and restated employment agreement is not complete and is qualified in its entirety by reference to a copy of Mr. Johnson’s amended and restated employment agreement filed as Exhibit 10.2 to this Form 8-K, the contents of which are incorporated herein by reference.

Paul Schneider

On July 27, 2009, TPTX entered into a second amended and restated employment agreement with our Vice President and General Counsel, Paul Schneider. The second amended and restated employment agreement amends and restates the previously disclosed employment agreement between TorreyPines, TPTX and Mr. Schneider dated November 12, 2008, as amended February 3, 2009. This second amended and restated employment agreement was entered into in connection with the Merger and will become effective


only upon the closing of the Merger. Upon effectiveness, if the Merger closes, this second amended and restated employment agreement shall replace and supersede all prior employment agreements between Mr. Schneider and TPTX and/or TorreyPines.

This second amended and restated agreement, once effective, will remain effective through February 28, 2010 and may be terminated by Mr. Schneider or TPTX at any time, with or without cause. Mr. Schneider’s second amended and restated employment agreement reflects his current annual base salary of $217,700. The agreement does not provide for any annual bonus or vacation.

Pursuant to the terms of Mr. Schneider’s second amended and restated employment agreement, in the event that Mr. Schneider is terminated for any reason, Mr. Schneider will be entitled to continue to receive his base salary through February 28, 2010.

In addition, if, following the effective time of Mr. Schneider’s second amended and restated employment agreement and prior to February 28, 2010, TPTX (i) sells to a third party buyer any equity securities of TPTX and the proceeds from such sale are used primarily for the development of TPTX’s product designated NGX426, (ii) completes a change of control transaction or (iii) enters into a partnership, option, or similar arrangement and such sale or equivalent transaction as described in clauses (i), (ii) or (iii) is approved by TPTX and is for aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX on or before February 28, 2010 of not less than $10 million, then promptly following the closing of such sale or equivalent transaction, (A) TPTX shall pay to the Mr. Schneider an amount equal to (a) 3.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (b) 26%, and (B) TorreyPines shall pay to Mr. Schneider an amount equal to (x) 2.0% of the aggregate cash consideration (net of all costs and expenses associated with the sale or equivalent transaction) received by TPTX in the sale or equivalent transaction multiplied by (y) 26%.

The foregoing description of Mr. Schneider’s second amended and restated employment agreement is not complete and is qualified in its entirety by reference to a copy of Mr. Schneider’s amended and restated employment agreement filed as Exhibit 10.3 to this Form 8-K, the contents of which are incorporated herein by reference.

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