exv10w1






Exhibit 10.1




SANTARUS, INC.




2010 BONUS PLAN*





 




			
	*	 	Excludes those covered under the Field Sales Incentive Plans




 









 










Santarus, Inc.

2010 Bonus Plan



The Santarus, Inc. (“Santarus” or the “Company”) Bonus Plan is designed to offer employees a
performance-based plan that rewards the achievement of corporate goals, as well as individual goals
that are consistent with the corporate goals. The objective of the Bonus Plan is to create an
environment that focuses employees on the achievement of the 2010 corporate and individual goals.
A combination of corporate performance and individual performance will determine individual bonus
payouts.



Purpose of the Plan



The Santarus, Inc. 2010 Bonus Plan (the “Plan”) is designed to:





	 	•	 	Provide a bonus program that helps achieve overall corporate goals and enhances
shareholder value
	 
	 	•	 	Reward individuals for achievement of corporate and individual goals
	 
	 	•	 	Encourage teamwork among all disciplines within the Company
	 
	 	•	 	Offer an attractive bonus program to help attract and retain key employees




Plan Governance



The Compensation Committee of the Board of Directors is responsible for reviewing and approving the
Plan and any proposed modifications to the Plan. The President and CEO of Santarus is responsible
for administration of the Plan; provided that the Compensation Committee of the Board of Directors
is responsible for reviewing and approving all compensation, including compensation under this
Plan, for all officers, vice presidents and any other employees with an annual base salary greater
than or equal to $200,000.



Eligibility



All regular employees of the Company who are regularly scheduled to work at least 20 hours per week
will be eligible to participate in the Plan, other than any employee eligible to participate in the
Company’s Field Sales Incentive Plans. Temporary employees and part-time employees (who are
regularly scheduled to work less than 20 hours per week) are not included in this Plan. In order
to be eligible to receive any bonus award (or “Bonus”) under this Plan, a participant: (a) must
have commenced their employment with the Company prior to November 15, 2010 and remained
continuously employed through December 31, 2010 and until the time Bonuses are paid; and (b) must
be an employee in good standing (e.g., not on a performance improvement plan as of December 31,
2010 or an Unacceptable performer as determined during the 2010 review cycle), as





 









 







determined by the Compensation Committee of the Board of Directors or the President and CEO of
Santarus, as applicable in their sole discretion.



Corporate and Individual Performance



The President and CEO will present to the Compensation Committee of the Board of Directors a list
of the overall corporate goals for the Plan year, which is subject to approval by both the
Compensation Committee and the independent members of the Board of Directors. All participants in
the Plan will then develop a list of key individual goals, which will be approved by the
responsible vice president or the Compensation Committee of the Board of Directors, as applicable.



The total bonus pool for the Plan will be based on achievement of the 2010 corporate goals and
individual goals that have been approved as indicated above.



Bonus Awards



The Bonus will be paid in cash and is based on achievement of the 2010 corporate goals and
achievement of individual goals. The Bonus will be calculated by using the base salary as of
December 31, 2010, weighting factor, target bonus percentage and goal multipliers as identified
below:



Weighting Factor



The relative weight between the corporate and individual Bonus components will vary based on levels
within the organization. The weighting factors will be reviewed annually and adjusted, as
necessary or appropriate. The weighting for 2010 will be as follows:




	 	 	 	 	 	 	 	 	 
	Position	 	Corporate	 	Individual
	President and CEO
	 	 	100	%	 	 	 	 
	Group J (Officers)
	 	 	100	%	 	 	 	 
	Group I (Non-Officer VPs)
	 	 	80	%	 	 	20	%
	Group H (Executive Directors)
	 	 	80	%	 	 	20	%
	Group G (Senior Directors)
	 	 	80	%	 	 	20	%
	Group F (Directors)
	 	 	80	%	 	 	20	%
	Group E (Senior Managers)
	 	 	60	%	 	 	40	%
	Group D (Managers)
	 	 	60	%	 	 	40	%
	Group C
	 	 	40	%	 	 	60	%
	Group A & B
	 	 	20	%	 	 	80	%





Target Bonus Percentages



Bonus amounts will be determined by applying a “target bonus percentage” to the base salary of
employees in the Plan. Following are the 2010 target bonus percentages:





 









 








	 	 	 	 	 
	Position	 	Target Bonus Percentages
	President and CEO
	 	 	60	%
	Group J
	 	 	40	%
	Group I
	 	 	35	%
	Group H
	 	 	30	%
	Group G
	 	 	25	%
	Group F
	 	 	22	%
	Group E
	 	 	17	%
	Group D
	 	 	15	%
	Group C
	 	 	12	%
	Group B
	 	 	8	%
	Group A
	 	 	7	%





The base salary as of December 31, 2010 times the target bonus percentage will be used to establish
the target Bonus amount for the 2010 year.



Goal Multipliers



Corporate Goal Multiplier: The following scale will be used by the Compensation Committee
of the Board of Directors and the independent members of the Board of Directors to determine the
actual “corporate goal multiplier” based upon measurement of actual corporate performance versus
the pre-established corporate goals. The goal multiplier will be used with the calculated target
Bonus amount and the weighting factor to determine the actual Bonus amount for each individual
based on corporate performance.




	 	 	 	 	 
	Performance Category	 	Goal Multiplier
	1. Performance for the year exceeded the goal
or was excellent in view of prevailing conditions
	 	 	110% - 150	%
	 
	 	 	 	 
	2. Performance met the year’s goal
or is considered achieved in view of prevailing conditions
	 	 	90% - 109	%
	 
	 	 	 	 
	3. Performance for the year met some aspects of the goal
but not all.
	 	 	40% - 89	%
	 
	 	 	 	 
	4. The goal was not achieved and performance was
not acceptable in view of prevailing conditions.
	 	 	0	%





Individual Goal Multiplier: The “individual goal multiplier” will be determined by taking
into account the performance rating (Pinnacle, Standing Ovation, Great Performance, etc.) given to
the individual through the 2010 review cycle as well as any





 









 







other relevant criteria relating to the individual’s job performance during 2010. The specific
multipliers for each performance rating level are as follows:




	 	 	 	 	 
	Performance Rating:	 	Multiplier
	Pinnacle
	 	 	120	%
	Standing Ovation
	 	 	105	%
	Great Performance
	 	 	90	%
	Too New
	 	 	70	%
	Fair Performance
	 	 	50	%





Calculation of Bonus Amount



The example below shows a sample Bonus amount calculation under the Plan. First, a target Bonus
amount is calculated for each Plan participant by multiplying the employee’s base salary by the
target bonus percentage. This dollar figure is then divided between the corporate component and
the individual component based on the weighting factor for that position. This calculation
establishes specific dollar target Bonus amounts for the performance period for each of the
corporate and individual components.



At the end of the performance period, corporate and individual goal multipliers will be established
using the criteria described above. The corporate goal multiplier, which is based on overall
corporate performance, is used to calculate the corporate component of the Bonus amount for all
Plan participants. This is accomplished by multiplying the target corporate Bonus amount
established for each individual by the actual corporate goal multiplier. The individual goal
multiplier, which is based on an individual’s performance rating, is used in the same way to
calculate the actual individual component of the Bonus amount.



Example: Actual Bonus Amount Calculation




	 	 	 	 	 
	Group Level

	 	B	 
	Position

	 	Executive Assistant

	Base Salary as of December 31, 2009

	 	$50,000 

	Target Bonus Percentage

	 	8% 

	Performance Rating

	 	Standing Ovation

	Target Bonus Amount

	 	$4,000 

	 
	Target Bonus Amount Components:
	 	 	 	 
	Target Bonus Amount based on corporate performance (20%):

	 	$ 800	 
	Target Bonus Amount based on individual performance (80%):

	 	$ 3,200	 
	 
	Corporate Goal Multiplier

	 	80% 		
	Individual Goal Multiplier

	 	105% 		






 









 






	 	 	 	 	 	 	 
	Actual Bonus Amount Calculation:	 	 	 	 		
	Corporate Bonus Amount

	 	 	  	 	$640 ($800 x 80%)	
	Individual Bonus Amount

	 	 	  	 	$3,360 ($3,200 x 105%)	
	Total Actual Cash Bonus Amount

	 	 		 	$4,000 	 





Payment of the Bonus Amounts



Annual performance reviews for Plan participants will be completed by February 28, 2011. Payments
of actual Bonus amounts will be made as soon as practical, but not later than March 15, 2011.
Participants’ entitlement to Bonuses under this Plan does not vest until the Bonuses are actually
paid. This plan is not intended to be subject to Section 409A of the Internal Revenue Code of 1986,
as amended.



Participants who join the Company prior to November 15, 2010 and remain continuously employed
through December 31, 2010 will be eligible to participate in the Plan and have their actual Bonus
amount prorated based on their actual time with the Company during the Plan year.



A participant whose employment terminates voluntarily prior to the payment of a Bonus award will
not be eligible to receive the Bonus award. Continued employment is a condition of vesting. If a
participant’s employment is terminated involuntarily during the Plan year, or prior to payment of
Bonus awards, it will be at the absolute discretion of the Company whether or not a Bonus award
payment is made. A participant must also be an employee in good standing (not on a performance
improvement plan, other disciplinary status or Unacceptable performer) in order to be eligible to
receive a Bonus payment.



Company’s Absolute Right to Alter or Abolish the Plan



The Compensation Committee of the Board of Directors reserves the right in its absolute discretion
to terminate and/or abolish all or any portion of the Plan at any time or to alter the terms and
conditions under which a Bonus will be paid. In the event of the Plan’s termination prior to the
payment of a Bonus, such Bonus will not be payable under this Plan. Such discretion may be
exercised any time before, during, and after the Plan year is completed. No participant shall have
any vested right to receive any payment until actual delivery of such compensation.
Notwithstanding the generality of the foregoing, at the Company’s discretion all or a portion of a
Bonus payment may be made in shares of the Company’s common stock.



Employment Duration/Employment Relationship



This Plan does not, and the Company’s policies and practices in administering this Plan do not,
constitute an express or implied contract or other agreement concerning the





 









 







duration of any participant’s employment with the Company. The employment relationship of each
participant is “at will” and may be terminated at any time by the Company or by the participant
with or without cause.