exv10w2






Exhibit 10.2




SANTARUS, INC.




2011 BONUS PLAN*





 




			
	*	 	Excludes those covered under the Field Sales Incentive Plans





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Santarus, Inc.

2011 Bonus Plan



The Santarus, Inc. (“Santarus” or the “Company”) 2011 Bonus Plan (the “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.




Purpose of the 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, executive directors and any other
employees with an annual base salary greater than or equal to $250,000.




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, 2011 and remained
continuously employed through December 31, 2011 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,
2011 or an Unacceptable performer as determined during the 2011 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. Employees joining during the




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bonus plan year will 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 a 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.




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 their manager
and used for the basis of the performance review and individual performance rating.



The total bonus pool for the Plan will be based on achievement of the 2011 corporate goals
and, where applicable, the individual’s annual performance review rating.




Bonus Awards



The Bonus will be paid in cash and is based on achievement of the 2011 corporate goals and
achievement of individual goals. The Bonus will be calculated by using the base salary as of
December 31, 2011, 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 2011 will be as follows:




	 	 	 	 	 	 	 	 	 
	Position	 	Corporate	 	Individual
	President and CEO
	 	 	100	%	 	 	 	 
	Group K (EVP Level Officer)
	 	 	100	%	 	 	 	 
	Group J (SVP 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	%






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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 2011 target bonus percentages:




	 	 	 	 	 
	Position	 	Target Bonus Percentages
	President and CEO
	 	 	65	%
	Group K
	 	 	50	%
	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, 2011 times the target bonus percentage will be used to
establish the target Bonus amount for the 2011 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 “total corporate goal multiplier” based upon measurement of actual corporate
performance versus the pre-established corporate goals. The Compensation Committee will evaluate
each corporate goal as follows:




	 	 	 	 	 
	Performance Category	 	Goal Multiplier
	1. Performance for the year significantly exceeded the goal
or was excellent in view of prevailing conditions
	 	 	110% - 200	%
	 
	 	 	 	 
	2. Performance fully met the year’s goal or is considered
achieved in view of prevailing conditions
	 	 	100% - 150	%
	 
	 	 	 	 
	3. Performance for the year met some aspects of the goal
but not all or met most aspects in view of prevailing conditions.
	 	 	75% - 100	%
	 
	 	 	 	 
	4. The performance met at least 50% of the goal or met at least
50% in view of prevailing conditions.
	 	 	50% - 75	%
	 
	 	 	 	 
	5. The goal was not achieved and performance was
not acceptable in view of prevailing conditions.
	 	 	0	%






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Each goal is evaluated separately, weighting applied and a total corporate goal multiplier is
reached. A total corporate goal multiplier of at least 50% is required prior to
any payout of Bonuses under the Plan and the total corporate goal multiplier may not exceed
150%.



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 2011 review cycle as well as any other relevant criteria
relating to the individual’s job performance during 2011. The specific multipliers for each
performance rating level are as follows:




	 	 	 	 	 
	Performance Rating:	 	Multiplier
	Pinnacle
	 	 	125	%
	Standing Ovation
	 	 	115	%
	Great Performance
	 	 	100	%
	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 total
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.






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Example: Actual Bonus Amount Calculation




	 	 	 	 	 

	Group Level
	 	 	B	 
	Position
	 	Executive Assistant
	Base Salary as of December 31
	 	$	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, 2012.
Payments of actual Bonus amounts will be made as soon as practical, but not later than March 15,
2012. 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.




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






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Company’s discretion all or a portion of a Bonus payment may be made in shares of the
Company’s common stock.



The Compensation Committee, in its discretion, may also determine whether to increase the
payout under the Plan for extraordinary achievement or to reduce payout if economic and business
conditions warrant such action.




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.





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