Exhibit 10.1



 





EXHIBIT 10.1




SANTARUS, INC.




2007 BONUS PLAN*






 




			
	*	 	Excludes those covered under the Field Sales Incentive Plans














 










Santarus, Inc.

2007 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 Bonus Plan will create an environment that
focuses employees on the achievement of the 2007 goals. A combination of corporate performance and
individual performance will determine individual bonus payouts.




Purpose of the Plan



The Santarus 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 working at least 20 hours per week will be eligible to
participate in the Plan. Temporary employees and part-time employees (working less than 20 hours
per week) are not included in this Plan. In order to be eligible to receive any bonus award
(“Bonus”) under this Plan, a participant: (a) must have commenced their employment with the
Company prior to November 15 of the Plan year and remained continuously employed through the end of
the Plan year and until the time Bonuses are paid; and (b) must be an employee in good standing
(i.e., not on a performance improvement plan or a Needs Improvement performer).














 








Corporate and Individual Performance



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



The total bonus pool for the Plan will be based on achievement of the 2007 corporate goals and
individual objectives that have been approved as indicated above.




Bonus Awards



The Bonus will be paid in cash and is based on achievement of the 2007 corporate goals and
achievement of individual objectives. The Bonus will be calculated by using the base salary,
weighting factor, target bonus percentage and goal multipliers as identified below:




Weighting Factor



The relative weight between corporate and individual performance factors will vary based on levels
within the organization. The weighting factors will be reviewed annually and adjusted, as
necessary or appropriate. The weighting for 2007 will be as follows:




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






Target Bonus Percentages 



Bonus awards will be determined by applying a “target bonus percentage” to the base salary of
employees in the Plan. Following are the 2007 target bonus percentages:




	 	 	 	 	 	 	 
	Position	 	Target Bonus Percentages
	President and CEO
	 	 	 	50	%	 
	Group I
	 	 	 	35	%	 
	Group H
	 	 	 	30	%	 
	Group G
	 	 	 	30	%	 
	Group F
	 	 	 	25	%	 
	Group E
	 	 	 	20	%	 
















 






	 	 	 	 	 
	Position	 	Target Bonus Percentages
	Group D
	 	 	15	%
	Group C
	 	 	10	%
	Group B
	 	 	7.5	%
	Group A
	 	 	6	%





The base salary as of December 31, 2007 times the target bonus percentage will be used to establish
the target bonus award for the 2007 year.




Goal Multipliers



Corporate Goal Multiplier: The following scale will be used by the Board of Directors to
determine the actual “corporate goal multiplier” based upon measurement of actual corporate
performance versus pre-established corporate goals and objectives. This scale is applied to each
goal and then summed for the total corporate goal multiplier. The goal multiplier will be used
with the calculated target bonus award and the weighting factor to determine the actual cash award
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 2007 review cycle as well as any other relevant criteria relating to the
individual’s job performance during 2007. The specific multipliers for each performance rating
level is reviewed and approved by Executive Management each year and is reflective of the overall
corporate goal rating so that the total bonus payout does not exceed the corporate goal
rating/multiplier times the total company target bonus pool.




Calculation of Award



The example below shows a sample bonus award calculation under the Plan. First, a target bonus
award 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 awards 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 bonus awards for all Plan participants.
This is accomplished by multiplying the target corporate bonus award 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
bonus award.




Example:
Actual Cash Bonus Award Calculation




	 	 	 
	Group Level

	 	B
	Position

	 	Executive Assistant
	Base Salary as of December 31, 2005

	 	$50,000
	Target Bonus Percentage

	 	7.5%
	Performance Rating

	 	Standing Ovation
	Target Bonus Award

	 	 $3,750






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

	 	$	750	 	 	 
	Target Bonus Award based on individual performance (80%):

	 	$	3,000	 	 	 






	 	 	 
	Corporate Goal Multiplier

	 	80%
	Individual Goal Multiplier (estimated)

	 	82%






	 	 	 	 	 	 	 	 	 
	Actual Cash Bonus Award Calculation:

	 	 	 	 	 	 	 	 
	 
	Corporate Bonus Award

	 	$	600	 	 	($750 x 80%)
	 	 
	Individual Bonus Award

	 	$	2,460	 	 	($3,000 x 82%)	 	 
	 

	 	 	 	 	 	 	 
	Total Actual Cash Bonus Award

	 	$	3,060	 	 	 	 	 
	
The Corporate Goal success does have an impact on the amount of the Individual Goal
Multiplier.






Payment of the Actual Cash Bonus Award



Annual performance reviews for Plan participants will be completed by February 29, 2008. Payments
of actual cash bonus awards will be made as soon as practical, but not later than March 15, 2008.
Participants’ entitlement to Bonuses under this Plan does not vest until the Bonuses are actually
paid.



Participants who join the Company prior to November 15 of the Plan year and remain continuously
employed through the end of the Plan year will be eligible to participate in












 






the Plan and have their actual cash bonus award 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 or Needs Improvement performer) in order to be eligible to receive a Bonus
payment.




Company’s Absolute Right to Alter or Abolish the Plan



Santarus reserves the right in its absolute discretion to abolish the Plan at any time or to alter
the terms and conditions under which bonus compensation will be paid. 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 Santarus’ 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 Santarus or by the participant with or without cause.