This excerpt taken from the TPTX DEF 14A filed Apr 23, 2007.
Prior to the Merger, we entered into employment agreements with our Chief Executive Officer, Chief Financial Officer and General Counsel that included provisions relating to salary and bonus targets as well as providing for severance compensation under certain conditions. All compensation decisions for such executives were made by the Compensation Committee in place prior to the Merger. Each of the executives prior to the Merger was terminated in connection with the Merger.
Base Salaries. The base salaries of our executive officers prior to the Merger were based on the particular scope of each executives responsibilities, their qualifications and experience and their impact on stockholder value. In 2006 the Compensation Committee approved an increase of 2.5% of the 2005 base salary for the then-acting Chief Financial Officer and no increase in pay for each of the then-acting Chief Executive Officer and General Counsel.
Cash Bonus. In August 2006, prior to the closing of the Merger, the Compensation Committee in place at that time approved cash bonuses to be paid effective upon closing of the Merger for the then Chief Executive Officer equal to 40% of his base pay, less the value of any option grants he received in 2006, and for each of the Chief Financial Officer and General Counsel, 30% of their respective base pay, less the value of any option grants each received in 2006. The actual amounts paid to each of these individuals were as follows:
Stock Option Grants. Stock option grants made by the Compensation Committee in August 2006 to our executive officers employed prior to the Merger were based on performance of such employees negotiating, executing and finalizing the Merger. The following grants were made:
Change in Control and Severance Payments. Prior to the Merger, we entered into employment agreements with our then-acting Chief Executive Officer, Chief Financial Officer and General Counsel that included provisions providing for severance compensation to be paid if the executives were terminated under certain conditions, such as in connection with a change in control or a termination without cause by us, each as is set forth in the applicable agreement. The payments to these executives in connection with the Merger, which was a change in control transaction, are set forth in the section titled Summary Compensation Table in this proxy statement.