Summary of 2005 Compensation for Executive Officers and Non-Employee Directors of Praecis Pharmaceuticals Incorporated
This document outlines the 2005 compensation structure for executive officers and non-employee directors of Praecis Pharmaceuticals Incorporated. Executive officers receive specified annual salaries, target bonus percentages based on company and individual performance, and may receive stock options and standard employee benefits. Non-employee directors are compensated with annual retainers, meeting fees, reimbursement of expenses, and annual stock option grants. The compensation terms are approved by the Board of Directors but are not formalized in individual employment agreements, except for change of control provisions.
QuickLinks -- Click here to rapidly navigate through this document
Exhibit 10.18
Summary of 2005 Compensation for
Executive Officers and Non-Employee Directors
Executive Officer Compensation
In January 2005, the Board of Directors of PRAECIS PHARMACEUTICALS INCORPORATED (the "Company"), upon recommendation of the Compensation Committee, approved the 2005 compensation for the Company's executive officers. The table below sets forth 2005 compensation and potential bonus award values under the Company's Executive Management Bonus Plan (the "Bonus Plan"), as well as certain other compensation.
| Name and Title | Annual Salary(1) | Bonus Target Award Value(2) | Other Compensation | |||||
|---|---|---|---|---|---|---|---|---|
| Kevin F. McLaughlin President and Chief Executive Officer | $ | 350,000 | 50 | % | — | |||
| Edward C. English Vice President, Chief Financial Officer, Treasurer and Assistant Secretary | $ | 208,000 | 25 | % | — | |||
| Marc B. Garnick, M.D. Executive Vice President and Chief Medical and Regulatory Officer | $ | 340,000 | 40 | % | — | |||
| Richard W. Wagner, Ph.D. Executive Vice President, Discovery Research | $ | 267,500 | 30 | % | — | |||
| Michael J. Keavany Senior Vice President, Sales and Marketing | $ | 270,000 | 30 | % | $ | 50,000 | ||
- (1)
- Effective as of January 1, 2005, with the exception of Mr. McLaughlin, whose increase was effective January 24, 2005, coincident with his appointment as Chief Executive Officer, and Mr. Keavany, who joined the Company on November 11, 2004.
- (2)
- Represents the target award value for 2005, as a percentage of base salary, approved by the Compensation Committee for each executive officer under the Executive Management Bonus Plan. Actual bonuses earned for 2005 may vary from zero to 150% of the target amount, depending upon the Company's 2005 performance relative to predetermined corporate performance measures, as well as the performance of each executive officer against predetermined individual goals.
- (3)
- Represents payments due to Mr. Keavany during 2005 to assist in defraying the cost of certain temporary living expenses. These payments are due in two equal installments in May and November 2005, provided Mr. Keavany is an employee at such time(s).
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 2005) 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, 2004 and will be described in more detail under "Employment Agreements/Change of Control Arrangements" in the Company's Proxy Statement for its 2005 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 generally vest and become exercisable in equal monthly installments over a three-year period from the
date of grant so long as the individual continues to be an employee of the Company. The amount of such annual grants, if any, will be dependent upon corporate and individual performance during 2005.
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-Employee Director Compensation
For 2005, non-employee directors will receive the following annual compensation, which has been approved by the Company's Board of Directors and remains unchanged from 2004:
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 generally receive an annual option grant to purchase 10,000 shares of common stock, par value $.01 per share, of the Company. Each annual option grant 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.
QuickLinks
- Exhibit 10.18
