This excerpt taken from the TPTX DEF 14A filed Jun 19, 2009.
Summary of Benefits of Executive Officers
The liquidation and dissolution of the Company would be considered a change of control as defined in the Executive Officers employment agreements. As such, approval of the Plan of Dissolution and the termination of the Executive Officers in connection therewith would trigger payments under the employment agreements. Due to the financial status of the Company and the limited cash available, it is currently anticipated that the Company would only be able to provide a portion of the benefits payable under the Executive Officers employment agreements. Under the employment agreements, the following amounts would be due to the Executive Officers upon their termination as a result of the approval of the Plan of Dissolution:
If we receive cash upon the sale of our assets in an amount sufficient to pay the Executive Officers severance obligations in full, the Plan of Dissolution anticipates that we would pay the full amounts due the Executive Officers under their employment agreements.
In addition, the Executive Officers hold an aggregate of options to purchase 1,678,075 shares of our common stock of which the lowest exercise price is $0.23 per share. As of May 26, 2009, the closing price of a share of our common stock on the Nasdaq Stock Market was $0.33. Unless and until any such options are exercised and payment of the applicable exercise price is made, the option holders are not entitled to any cash distributions with respect to their options under the Plan of Dissolution.
In addition to the above, the Executive Officers, certain members of our Board of Directors, including Dr. Deleage who resigned from our Board of Directors effective May 27, 2009, Mr. Van Beneden who resigned from our Board of Directors effective May 29, 2009 and Dr. Fisherman who resigned from our board of Directors effective June 12, 2009 and entities affiliated with certain members of our Board of Directors, including Alta Partners where Dr. Deleage is a managing director, GIMV N.V. where Mr. Van Beneden is Executive Vice President Life Sciences and Advent Healthcare Ventures where Dr. Fisherman is a managing director own an aggregate of 5,916,946 shares of the Companys common stock. It is currently expected that distributions to stockholders would only occur upon the consummation of the sale of some or all of our assets. The amount of such distributions is not readily determinable as it is dependent upon the amount of consideration received for such assets. In the event of a distribution, Ms. Graham, Mr. Johnson and certain directors would be entitled to cash distributions based on their ownership of shares of the Companys common stock, which is detailed in the following table:
Following the filing of the Certificate of Dissolution with the Delaware Secretary of State, we will continue to indemnify each of our current and former directors and officers to the extent required under Delaware law and our Certificate of Incorporation and Bylaws as in effect immediately prior to the filing of the Certificate of Dissolution. In addition, we intend to maintain our current directors and officers insurance policy through the dissolution of the Company and to obtain runoff coverage for claims against our current officers and directors for up to an additional six years thereafter.
If the dissolution is approved, our Board of Directors may, at any time, turn our management over to a third party to complete the liquidation of our remaining assets and distribute the proceeds from the sale of assets to our stockholders pursuant to the Plan of Dissolution. This third-party management may be in the form of a liquidating trust, which, if adopted, would succeed to all of our assets, liabilities and obligations. Our Board of Directors may appoint one or more of its members or one or more of our officers to act as trustee or trustees of such liquidating trust. In the event a member of the Board of Directors or an officer is appointed to act as a trustee or trustees of the liquidating trust, we expect that the compensation paid to such individual or individuals for their trustee services would not be materially different from the compensation that would be paid to an outside third party, such as a bank, for similar services.
As a result of these benefits, our directors and executive officers generally could be more likely to vote to approve the Plan of Dissolution, including the liquidation and dissolution of the Company contemplated thereby, than our other stockholders.
Other than as set forth above, it is not currently anticipated that our liquidation and dissolution will result in any material benefit to any of our executive officers or to directors who participated in the vote to adopt the Plan of Dissolution.