SCHEDULE 14A INFORMATION

(RULE 14a-101)

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant  þ                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

SANTARUS, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

SANTARUS, INC.

3611 Valley Centre Drive, Suite 400

San Diego, California 92130

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of the Stockholders of Santarus, Inc. will be held on June 11, 2013 at 1:00 p.m. at the offices of the Company, located at 3611 Valley Centre Drive, Suite 400, San Diego, California 92130, for the following purposes:

Stockholders of record at the close of business on April 15, 2013 are entitled to notice of and to vote at our Annual Meeting and at any adjournment or postponement thereof.

Accompanying this Notice is a proxy card. Whether or not you expect to be at our Annual Meeting, please complete, sign and date the enclosed proxy card and return it promptly. If you plan to attend our Annual Meeting and wish to vote your shares personally, you may do so at any time before the proxy is voted.

All stockholders are cordially invited to attend the meeting.

By Order of the Board of Directors,

Gerald T. Proehl

President, Chief Executive Officer and Director

San Diego, California

April     , 2013

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

SANTARUS, INC.

PROXY STATEMENT

The board of directors of Santarus, Inc., a Delaware corporation (“Santarus,” the “Company,” “we,” “our” or “us”), is soliciting the enclosed proxy card for use at our Annual Meeting of Stockholders to be held on June 11, 2013 at 1:00 p.m. at the offices of the Company, located at 3611 Valley Centre Drive, Suite 400, San Diego, California 92130, and at any adjournments or postponements thereof. If you need directions to the location of the Annual Meeting, please contact us at (858) 314-5700. This Proxy Statement will be first sent to stockholders on or about April __, 2013.

All stockholders who find it convenient to do so are cordially invited to attend the meeting in person. In any event, please complete, sign, date and return the proxy card in the enclosed envelope.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 11, 2013

Electronic copies of this Proxy Statement and Santarus’ annual report are available at www.proxydocs.com/snts.

A proxy may be revoked by written notice to our corporate secretary at any time prior to the voting of the proxy, or by executing a later proxy or by attending the meeting and voting in person. Shares represented by proxies that reflect abstentions or “broker non-votes” (that is, shares held by a broker or nominee which are represented at the Annual Meeting, but not empowered to vote on a particular proposal) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

Absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on certain non-routine items, such as the election of directors and amendments to the Company’s equity and employee stock purchase plans. Thus, if the beneficial owner does not give a broker specific instructions, the beneficially owned shares may not be voted on these proposals and will not be counted in determining the number of shares necessary for approval, although they will count for purposes of determining whether a quorum exists.

Directors will be elected by a favorable vote of a plurality of the aggregate votes present, in person or by proxy, at the Annual Meeting. Accordingly, abstentions and broker non-votes will not affect the outcome of the election of candidates for director. Stockholders are not permitted to cumulate their shares for the purpose of electing directors or otherwise.

The proposal to amend Article FOURTH of the Company’s Amended and Restated Certificate of Incorporation requires the affirmative vote of the holders of a majority of the outstanding shares of common stock of the Company. Abstentions will have the same effect as votes against this proposal. This proposal is considered a routine matter on which a broker or other nominee is empowered to vote. Accordingly, no broker non-votes will result from this proposal.

The proposals to approve our Amended and Restated 2004 Equity Incentive Award Plan and our Amended and Restated Employee Stock Purchase Plan each require the affirmative vote of a majority of the aggregate votes present, in person or by proxy, and entitled to vote at the Annual Meeting. Abstentions will have the same effect as votes against these proposals. Broker non-votes will have the effect of a vote neither for or against such proposals.

The proposal to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013 requires the affirmative vote of a majority of the aggregate votes present, in person or by proxy, and entitled to vote at the Annual Meeting. Abstentions will have the same effect as votes against this proposal. This proposal is considered a routine matter on which a broker or other nominee is empowered to vote. Accordingly, no broker non-votes will result from this proposal.

Stockholders of record at the close of business on April 15, 2013 (the “Record Date”) will be entitled to vote at the meeting or vote by proxy using the proxy card. As of that date,                              shares of our common stock, par value $0.0001 per share, were outstanding. Each share of our common stock is entitled to one vote. A majority of the

outstanding shares of our common stock entitled to vote, represented in person or by proxy at our Annual Meeting, constitutes a quorum.

Methods of Voting

If you are a stockholder of record of our common stock as of the Record Date, you may submit your vote on any or all of the matters being considered at the Annual Meeting in person or by proxy. You may vote by proxy in any of the following ways:

Voting by Mail. You may vote by proxy by mail. By completing, signing and dating the enclosed proxy card and returning it in the prepaid and addressed envelope enclosed with proxy materials delivered by mail, you are authorizing the individuals named on the proxy card (referred to in this proxy statement as proxies) to vote your shares at the Annual Meeting in the manner you indicate. We encourage you to complete, sign, date and return the proxy card even if you plan to attend the Annual Meeting so that your shares will be voted if you are unable to attend the Annual Meeting. If you received more than one proxy card, it is an indication that your shares are held in multiple accounts. Please complete, sign, date and return all proxy cards to ensure that all of your shares are voted.

Voting by Telephone. You may vote by proxy by telephone by following the instructions for telephone voting shown on your proxy card.

Voting over the Internet. You may vote by proxy over the Internet by following the instructions for Internet voting shown on your proxy card.

If your shares are held in “street name” for your account by a broker, bank or other nominee, please refer to your proxy card or the information forwarded by your broker, bank or other nominee to see which options are available to you.

If you plan to attend the Annual Meeting and vote in person, we will provide you with a ballot at the Annual Meeting. If your shares are held in “street name” for your account by a broker, bank or other nominee, and if you wish to vote in person at the Annual Meeting, you will need to bring to the Annual Meeting a legal proxy from your broker, bank or other nominee authorizing you to vote such shares.

The cost of preparing, assembling and mailing the Notice of Annual Meeting, Proxy Statement and proxy card will be borne by us. In addition to soliciting proxies by mail, our officers, directors and other regular employees, without additional compensation, may solicit proxies personally or by other appropriate means. It is anticipated that banks, brokers, fiduciaries, other custodians and nominees will forward proxy soliciting materials to their principals, and that we will reimburse such persons’ out-of-pocket expenses. In addition, we have engaged MacKenzie Partners Inc. (“MacKenzie”), to assist in the solicitation of proxies for the Annual Meeting, and we estimate that we will pay MacKenzie a fee of approximately $10,000. We have also agreed to reimburse MacKenzie for reasonable and documented out-of-pocket expenses incurred in connection with the proxy solicitation and to indemnify MacKenzie against certain losses, costs and expenses.

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PROPOSAL 1

ELECTION OF DIRECTORS

Our board of directors currently consists of eight members. Matthew W. Strobeck, Ph.D. served as a member of our board of directors from April 6, 2012 to June 1, 2012, at which time Dr. Strobeck resigned from the board of directors to pursue other business interests. Our Amended and Restated Certificate of Incorporation provides for the classification of our board of directors into three classes, as nearly equal in number as possible, with staggered terms of office and provides that upon the expiration of the term of office for a class of directors, nominees for such class shall be elected for a term of three years or until their successors are duly elected and qualified. At this meeting, three nominees for director are to be elected as Class I directors for a three-year term expiring at our 2016 annual meeting of stockholders. The nominees are Daniel D. Burgess, Michael G. Carter, M.B., Ch.B., F.R.C.P. (U.K.) and Alessandro E. Della Chà. The Class II and Class III directors have one year and two years, respectively, remaining on their terms of office.

A plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors is required to elect directors. If no contrary indication is made, properly executed proxies are to be voted for our board of directors’ nominees or, in the event any of such nominees is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who shall be designated before the Annual Meeting by our board of directors to fill such vacancy. Our advance notice bylaws do not require our board of directors to designate such substitute nominee any particular period in advance of our Annual Meeting. In the event that our board of directors lawfully identifies or nominates a substitute or additional nominee before the Annual Meeting, we will file an amended proxy statement that (1) identifies such nominee, (2) discloses whether such nominee has consented to being named in the revised proxy statement and to serve if elected and (3) includes certain information regarding the nominee required under the rules of the Securities and Exchange Commission (the “SEC”).

Information Regarding Directors

The information set forth below as to the directors and nominees for director has been furnished to us by the directors and nominees for director. The process undertaken by the Nominating/Corporate Governance Committee in recommending qualified director candidates is described below under “Director Nomination Process.” Certain individual qualifications and skills of our directors that contribute to the board’s effectiveness as a whole are described in the following paragraphs.

Class I Directors

Nominees for Election for a Three-Year Term Expiring at the

2016 Annual Meeting of Stockholders

Daniel D. Burgess has served as a member of our board of directors since July 2004. Since June 2011, Mr. Burgess has been President and Chief Executive Officer of Rempex Pharmaceuticals, Inc., a private biopharmaceutical company. Prior to that, Mr. Burgess was President and Chief Executive Officer of Mpex Pharmaceuticals, Inc., a private biopharmaceutical company, which he joined in May 2007 and which was acquired by Aptalis Pharma Inc. in 2011. From August 1999 to May 2007, Mr. Burgess was Chief Operating Officer and Chief Financial Officer of Harbor BioSciences, Inc., formerly Hollis-Eden Pharmaceuticals, Inc., a pharmaceutical company. Mr. Burgess joined Harbor BioSciences from Nanogen Inc., a supplier of molecular diagnostic tests, where he served as Vice President and Chief Financial Officer. Prior to joining Nanogen in 1998, Mr. Burgess spent ten years with Gensia Sicor, Inc. (acquired by Teva Pharmaceutical Industries Limited), formerly Gensia Inc., a specialty pharmaceutical company, and Gensia Automedics, Inc., a partially owned subsidiary of Gensia Sicor. He served as President and a director of Gensia Automedics, where he was responsible for all functional areas of this medical products company. In addition, he was

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Vice President and Chief Financial Officer of Gensia Sicor, where he was responsible for finance, investor relations, business development and other administrative functions. Prior to joining Gensia, Mr. Burgess held positions at Castle & Cooke, Inc. and Smith Barney, Harris Upham and Company. Mr. Burgess served as a director of Metabasis Therapeutics, Inc. from March 2004 until its acquisition by Ligand Pharmaceuticals Inc. in January 2010. He holds a B.A. in economics from Stanford University and an M.B.A. from Harvard Business School. In selecting Mr. Burgess to serve as a director, the board considered, among other things, his valuable financial expertise, including prior service as chief financial officer for publicly traded companies and his status as an “audit committee financial expert.” Santarus also benefits from Mr. Burgess’ general business experience in the pharmaceutical and biotechnology industries.

Michael G. Carter, M.B., Ch.B., F.R.C.P. (U.K.) has served as a member of our board of directors since February 2005. Dr. Carter has been a venture partner at S.V. Life Sciences Advisers LLP since 1998. He is retired from Zeneca, PLC, a publicly traded global pharmaceutical company. During his 15 years at Zeneca, Dr. Carter served as International Medical Director and International Marketing Director. Prior to joining Zeneca, Dr. Carter held several positions with Roche Products, Ltd. Dr. Carter currently serves as a director of GTx, Inc., a men’s health biotechnology company, in the U.S. Since September 2009, he has been a member of the Strategic Advisory Board of Healthcare Royalty Partners. He is an elected fellow of the Royal Pharmaceutical Society, Faculty of Pharmaceutical Medicine, and of the Royal College of Physicians of Edinburgh. Dr. Carter holds a bachelor’s degree in pharmacy from London University (U.K.) and a medical degree from Sheffield University Medical School (U.K.). In selecting Dr. Carter to serve as a director, the board considered, among other things, his valuable medical and commercial expertise, including prior service with Zeneca and Roche Products. Santarus also benefits from Dr. Carter’s international experience in the pharmaceutical and biotechnology industries.

Alessandro E. Della Chà has served as a member of our board of directors since April 2012. Since 1997, Mr. Della Chà has been a senior partner of Studio Legale Edoardo Ricci e Associati, a leading boutique commercial law firm in Milan, Italy and has served as a co-managing director of the firm since 2003. Mr. Della Chà has represented Italian companies and banks in litigation, commercial and bankruptcy matters, with significant experience in the fields of capital market transactions, IPOs, private placements, corporate governance issues and corporate restructurings. He currently serves as a director of Cosmo Pharmaceuticals S.p.A. Mr. Della Chà holds a degree in law from the Università degli Studi di Milano and a Masters in European Commercial Law from the University of Leicester, England. In selecting Mr. Della Chà to serve as a director, the board considered, among other things, his industry expertise and legal background. Santarus also benefits from Mr. Della Chà’s international perspective and relationship with a key corporate partner.

Our board of directors recommends a vote “FOR” each nominee listed above. Proxies solicited by our board of directors will be so voted unless stockholders specify otherwise on the accompanying proxy card.

Members of the Board of Directors Continuing in Office

Class II Directors

Term Expiring at the

2014 Annual Meeting of Stockholders

Michael E. Herman has served as a member of our board of directors since September 2003. From January 1992 to December 2000, Mr. Herman was President of the Kansas City Royals Baseball Club. From January 1990 to December 1999, he was Chairman of the Finance and Investment Committee of the Kauffman Foundation and was its President from January 1985 to December 1990. From October 1974 to December 1990, Mr. Herman was the Executive Vice President and Chief Financial Officer of Marion Laboratories, Inc. Mr. Herman is a director of Senomyx, Inc., a biotechnology company, and also is a Trustee of Rensselaer Polytechnic Institute and the University of Chicago Graduate School of Business. He also serves as a member of the board of directors of Vail Valley Foundation. Mr. Herman also previously served as a director of Cerner Corporation, Janus Capital, Eloquent, Inc. and Agouron Pharmaceuticals, Inc., a Pfizer company. Mr. Herman holds a B.S. in metallurgical engineering from Rensselaer

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Polytechnic Institute and an M.B.A. from the University of Chicago. In selecting Mr. Herman to serve as a director, the board considered, among other things, his valuable business and financial expertise, both within and outside the life sciences industry, including prior service with Marion Laboratories. Santarus also benefits from Mr. Herman’s involvement in the healthcare and biotechnology industries through his previous 15 years of service on the board of directors of Cerner Corporation and his current director position with Senomyx.

Kent Snyder has served as a member of our board of directors since September 2004. Since September 2009, Mr. Snyder has been the Chief Executive Officer and Chairman of Senomyx, Inc., a San Diego-based biotechnology company. From June 2003 to August 2009, Mr. Snyder was President and Chief Executive Officer and a director of Senomyx. In May 2008, Mr. Snyder assumed the role of Chairman of the board of directors of Senomyx. Prior to joining Senomyx, from October 2001 to June 2003, Mr. Snyder was retired. From July 1991 to October 2001, Mr. Snyder held various management positions with Agouron Pharmaceuticals, Inc., a Pfizer company, including President of Global Commercial Operations. Prior to holding the position of President of Global Commercial Operations, Mr. Snyder served as Senior Vice President of Commercial Affairs and Vice President of Business Development. Mr. Snyder holds a B.S. in pharmacy from the University of Kansas and an M.B.A. from Rockhurst College. In selecting Mr. Snyder to serve as a director, the board considered, among other things, his valuable business and commercial expertise in the pharmaceutical and biotechnology industries, including his current position with Senomyx and prior service with Agouron Pharmaceuticals. Santarus also benefits from Mr. Snyder’s status as an “audit committee financial expert.”

Class III Directors

Term Expiring at the

2015 Annual Meeting of Stockholders

Gerald T. Proehl serves as our President and Chief Executive Officer and as a director. Mr. Proehl has served in these capacities since January 2002. From March 2000 through December 2001, Mr. Proehl was our President and Chief Operating Officer. From April 1999 to March 2000, Mr. Proehl was our Vice President, Marketing and Business Development. Prior to joining Santarus, Mr. Proehl was with Hoechst Marion Roussel, Inc., a global pharmaceutical company, for 14 years, where he served in various capacities in multiple therapeutic areas including gastrointestinal, cardiovascular, wound care and central nervous system, and from March 1997 to April 1999 served as Vice President of Global Marketing. While at Hoechst Marion Roussel, Mr. Proehl was responsible for the marketing of gastrointestinal products Carafate^® and Pentasa^®, among products in several other therapeutic areas. Mr. Proehl holds a B.S. in education from the State University of New York at Cortland, an M.A. in exercise physiology from Wake Forest University and an M.B.A. from Rockhurst College. In selecting Mr. Proehl to serve as a director, the board considered, among other things, his significant knowledge and understanding of Santarus’ business in his role as President and Chief Executive Officer. Santarus also benefits from Mr. Proehl’s general business and commercial experience in the pharmaceutical industry, including his positions with Hoechst Marion Roussel.

David F. Hale has been Chairman since February 2004 and has served as a member of our board of directors since June 2000. Since May 2006, Mr. Hale has served as Chairman and Chief Executive Officer of Hale BioPharma Ventures, LLC, which is focused on the formation and development of biotechnology, specialty pharmaceutical, diagnostic and medical device companies. In March 2011, Mr. Hale was appointed Executive Chairman of Biocept, Inc. Mr. Hale was a co-founder of Somaxon Pharmaceuticals, Inc. and he served as Chairman of the board of directors from August 2003 to December 2007, interim Chief Executive Officer from January 2008 to August 2008, Executive Chairman from December 2007 to June 2009 and Chairman from July 2009 until its acquisition by Pernix Therapeutics Holdings, Inc. in March 2013. From October 2000 to May 2006, Mr. Hale served as President and Chief Executive Officer of CancerVax Corporation, a biotechnology company, and from December 2000 to May 2006, Mr. Hale was also a director of CancerVax. In May 2006, CancerVax merged with Micromet AG to form Micromet, Inc., a biotechnology company, of which Mr. Hale was Chairman until Micromet was acquired by Amgen Inc. in March 2012. Prior to joining CancerVax, Mr. Hale served as President and Chief Executive Officer and a director of Women First

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HealthCare, Inc., a specialty healthcare company, from January 1998 to May 2000. From May 1987 to February 1997, he served as Chairman, President and Chief Executive Officer of Gensia Inc., a specialty pharmaceutical company. In February 1997, Gensia Inc. merged with Sicor Inc., to form Gensia Sicor Inc., and Mr. Hale served as Chief Executive Officer until October 1997, and as a director until June 1999. From February 1987 to September 1994, Mr. Hale served as Chairman of Viagene, Inc., a biotechnology company. Mr. Hale joined Hybritech, Inc., a publicly traded biotechnology company (acquired by Eli Lilly and Company in 1986), in 1982 and served as Chief Operating Officer, President, Chief Executive Officer and a director until May 1987. Mr. Hale served as a director of Metabasis Therapeutics, Inc. from April 1997 to August 2006, Chairman of the board of directors from August 2006 to September 2009, Executive Chairman from September 2009 to January 2010 and acting Chief Executive Officer from October 2009 to January 2010 when Metabasis was acquired by Ligand Pharmaceuticals Inc. Mr. Hale holds a B.A. in biology and chemistry from Jacksonville State University. In selecting Mr. Hale to serve as a director, the board considered, among other things, his significant business experience in the pharmaceutical and biotechnology industries, including service as a director or senior executive officer of numerous publicly traded and privately held pharmaceutical and biotechnology companies. Santarus also benefits from Mr. Hale’s status as an “audit committee financial expert.”

Ted W. Love, M.D. has served as a member of our board of directors since March 2005. In August 2012, Dr. Love retired from Onyx Pharmaceuticals, Inc., where he had served as an executive vice president since February 2010, most recently serving as its Executive Vice President and Head of Research & Development and Technical Operations. He provided consulting services to Onyx Pharmaceuticals, Inc. through December 2012. He previously served as President and Chief Executive Officer of Nuvelo, Inc., a biopharmaceutical company, from March 2001 to January 2009, having been appointed President and Chief Operating Officer of Nuvelo in January 2001. He served as a director of Nuvelo starting in February 2001 and became Chairman of the board of directors in September 2005. He joined Nuvelo from Theravance, Inc. (formerly Advanced Medicine), a biopharmaceutical company, where he served as Senior Vice President of Development from February 1998 to January 2001. Prior to that, he spent six years at Genentech, Inc., a biotechnology company, holding a number of senior management positions in medical affairs and product development. Dr. Love currently serves on the board of directors of Affymax, Inc., Bio-Rad Laboratories, Inc., Amicus Therapeutics, Inc., and Mast Therapeutics, Inc. Dr. Love also previously served on the board of directors of ARCA biopharma, Inc. and the California Institute for Regenerative Medicine (CIRM) Independent Citizen’s Oversight Committee. Dr. Love holds a B.A. in molecular biology from Haverford College and an M.D. from Yale Medical School. In selecting Dr. Love to serve as a director, the board considered, among other things, his valuable medical and business expertise, including his prior service with Onyx Pharmaceuticals, Nuvelo, Theravance and Genentech. Santarus also benefits from Dr. Love’s experience as a director of other publicly traded life science companies.

Director Independence

Messrs. Burgess, Hale, Herman, Snyder and Drs. Carter and Love are independent directors, as defined under applicable rules of the SEC and in the NASDAQ Stock Market, or NASDAQ, qualification standards. Our independent directors meet in regularly scheduled executive sessions without management. These executive sessions occur in conjunction with regularly scheduled meetings of our board of directors and its standing committees and otherwise as needed. There are no family relationships among any of the directors or executive officers of the Company and there are no other arrangements or understandings pursuant to which any member of, or nominee to, our board of directors was selected.

Board Meetings

Our board of directors held seven meetings, including telephonic meetings, during 2012. No director who served as a director during the past year (except for Dr. Strobeck, who resigned on June 1, 2012, and Mr. Della Chá, who was appointed in April 2012) attended fewer than 75% of the aggregate of the total number of meetings of our board of directors and the total number of meetings of committees of our board of directors on which he served.

Board Leadership Structure

Our board of directors is currently comprised of eight directors, six of whom are independent. We separate the roles of chief executive officer and chairman of our board of directors in recognition of the differences between the two roles. The chief executive officer is responsible for setting the strategic direction for the Company and the day to day leadership and performance of the Company, while the chairman of our board of directors provides guidance to the

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chief executive officer and presides over meetings of the full board of directors. We believe that this separation of responsibilities provides a balanced approach to managing the board of directors and overseeing the Company.

Board’s Role in Risk Oversight

Our board of directors is actively involved in oversight of risks that could affect the Company. The board’s role in our risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including risks associated with our operational, financial, legal and regulatory functions. The full board (or the appropriate board committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within the organization to enable it to understand our risk identification, risk management and risk mitigation strategies. When a board committee engages in a discussion related to areas of material risk to the Company, the chairman of the relevant committee reports on the discussion to the full board during the committee reports portion of the next board meeting. This enables the board and its committees to coordinate the risk oversight role.

Committees of the Board

Audit Committee. Our audit committee currently consists of Messrs. Burgess, Hale and Snyder. The audit committee held four meetings, including telephonic meetings, during 2012. All members of the audit committee are independent directors, as defined under applicable SEC rules and in the NASDAQ qualification standards. Our board of directors has determined that each of Messrs. Burgess, Hale and Snyder qualifies as an “audit committee financial expert” as that term is defined in the rules and regulations established by the SEC. The audit committee is governed by a written charter approved by our board of directors, a copy of which is available on our web site at http://ir.santarus.com/governance.cfm. The functions of this committee include:

Both our independent registered public accounting firm and internal financial personnel regularly meet privately with our audit committee and have unrestricted access to this committee.

Nominating/Corporate Governance Committee. Our nominating/corporate governance committee currently consists of Drs. Love and Carter and Mr. Herman. The nominating/corporate governance committee held four meetings, including telephonic meetings, during 2012. All members of the nominating/corporate governance committee are independent directors, as defined under applicable SEC rules and in the NASDAQ qualification standards. The nominating/corporate governance committee is governed by a written charter approved by our board of directors, a copy of which is available on our web site at http://ir.santarus.com/governance.cfm. The functions of this committee include:

Compensation Committee. Our compensation committee currently consists of Messrs. Herman, Hale and Snyder. The compensation committee held five meetings, including telephonic meetings, during 2012. All members of the

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compensation committee are independent directors, as defined under applicable SEC rules and in the NASDAQ qualification standards. The compensation committee is governed by a written charter approved by our board of directors, a copy of which is available on our web site at http://ir.santarus.com/governance.cfm. The functions of this committee include:

With regard to executive compensation, the compensation committee of our board of directors has the primary authority to determine compensation for our executive officers. To aid its review of employee compensation, the compensation committee reviews third party survey data for peer group companies and utilizes the services of Radford, an AON Hewitt company, an independent compensation consulting firm. In addition, the compensation committee, together with the remaining independent members of our board of directors, has authority to review our President and Chief Executive Officer’s individual performance and compensation, as well as to establish and determine achievement of our annual corporate goals. For more information about the compensation committee’s involvement with executive compensation matters, including its engagement of Radford, please see the discussion below under the heading “Compensation Discussion and Analysis.”

The compensation committee also has the primary authority to review, at least annually, and recommend to the board of directors all compensation for our non-employee directors in connection with their service on our board of directors. To aid its review of non-employee director compensation, the compensation committee reviews third party survey data for peer group companies and utilizes the services of Radford.

Compensation Committee Interlocks and Insider Participation

Messrs. Herman, Hale and Snyder serve on the compensation committee of our board of directors. No member of the compensation committee was at any time during the 2012 fiscal year or at any other time an officer or employee of the Company. None of our executive officers serve, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our compensation committee. None of our executive officers serve, or in the past year has served, as a member of the compensation committee of any entity that has one or more executives serving on our board of directors. No person who served as a member of the Compensation Committee during the 2012 fiscal year had a direct or indirect material interest in any transaction since the beginning of the 2012 fiscal year or any currently proposed transaction in which the Company was or is to be a participant and the amount involved exceeded or exceeds $120,000.

Director Nomination Process

Director Qualifications

In evaluating director nominees, the nominating/corporate governance committee considers, among other things, the following factors:

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In connection with its evaluation of director nominees, the nominating/corporate governance committee also considers diversity of expertise and experience in substantive matters pertaining to our business relative to other board members. The nominating/corporate governance committee’s goal is to assemble a board of directors that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the nominating/corporate governance committee may also consider such other facts as it may deem are in the best interests of the Company and our stockholders. The nominating/corporate governance committee also believes it is appropriate for at least one, and, preferably, several, members of our board of directors to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of our board of directors be independent as required under the NASDAQ qualification standards. The nominating/corporate governance committee also believes it is appropriate for our chief executive officer to serve as a member of our board of directors. Our directors’ performance and qualification criteria are reviewed annually by the nominating/corporate governance committee.

Identification and Evaluation of Nominees for Directors

The nominating/corporate governance committee identifies nominees for director by first evaluating the current members of our board of directors willing to continue in service. Current members with qualifications and skills that are consistent with the nominating/corporate governance committee’s criteria for board of directors service and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of our board of directors with that of obtaining a new perspective.

If any member of our board of directors does not wish to continue in service or if our board of directors decides not to re-nominate a member for re-election, the nominating/corporate governance committee identifies the desired skills and experience of a new nominee in light of the criteria above. The nominating/corporate governance committee generally polls our board of directors and members of management for their recommendations. The nominating/corporate governance committee may also review the composition and qualification of the boards of directors of our competitors, and may seek input from industry experts. The nominating/corporate governance committee reviews the qualifications, experience and background of the candidates. Final candidates are interviewed by the members of the nominating/corporate governance committee and by certain of our other independent directors and executive management. In making its determinations, the nominating/corporate governance committee evaluates each individual in the context of our board of directors as a whole, with the objective of assembling a group that can best perpetuate the success of the Company and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the nominating/corporate governance committee makes its recommendation to our board of directors.

In the event that we receive director candidate recommendations from our stockholders, those recommendations are evaluated in the same manner that potential nominees suggested by board members, management or other parties are evaluated. We do not intend to treat stockholder recommendations in any manner different from other recommendations.

Pursuant to our Amended and Restated Bylaws, stockholders wishing to suggest a candidate for director should write to our corporate secretary. In order to be considered, the recommendation for a candidate must include the following written information: (i) with respect to each of the proposing stockholder and the candidate, the class and number of shares of our capital stock which are owned beneficially and of record, (ii) with respect to each of the proposing stockholder and the candidate, any derivative, swap or other transaction, the purpose or effect of which is to give such party economic risk similar to ownership of shares of our capital stock; (iii) with respect to each of the proposing stockholder and the candidate, any proxy, agreement or relationship that confers a right to vote any of our shares of capital stock; (iv) with respect to each of the proposing stockholder and the candidate, any agreement or

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relationship engaged in to reduce the level of risk to, or increase or decrease the voting power of, such party with respect to our shares of capital stock, or which provides the opportunity to profit from any decrease in the value of our shares of capital stock; (v) with respect to each of the proposing stockholder and the candidate, any performance-related fees such party is entitled to be based on the increase or decrease in the value of any of our shares of capital stock; (vi) any other information relating to the proposing stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies or consents by such proposing stockholder pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (vii) all information relating to the candidate that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act (including such candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (viii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the proposing stockholder, on the one hand, and the candidate, his or her respective affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K promulgated under the Exchange Act if such proposing stockholder were the “registrant” for purposes of such rule and the candidate were a director or executive officer of such registrant. In addition, we may require any candidate to furnish such other information as may reasonably be required by us to determine the eligibility of such candidate to serve as an independent director in accordance with our corporate governance guidelines or that could be material to a reasonable stockholder’s understanding of the independence or lack of independence of such candidate.

In order to give the nominating/corporate governance committee sufficient time to evaluate a recommended candidate and/or include the candidate in our proxy statement for the annual meeting to be held in 2014, the recommendation should be received by our corporate secretary at our principal executive offices pursuant to our procedures detailed in the section below entitled “Stockholder Proposals.”

Communications with our Board of Directors

Our stockholders may contact our board of directors or a specified individual director by writing to our corporate secretary at Santarus, Inc., 3611 Valley Centre Drive, Suite 400, San Diego, California 92130. Our corporate secretary will relay all such communications to our board of directors, or individual members, as appropriate.

Code of Ethics

The Company has established a Code of Business Conduct and Ethics that applies to our officers, directors and employees. The Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics, and is intended to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. The Company has established an Ethics Helpline at 1-800-869-9522 that is designed to receive anonymous reports of any known or suspected violations of our Code of Business Conduct and Ethics, Comprehensive Compliance Program for Sales and Marketing Activities or other applicable laws, rules and regulations.

Corporate Governance Documents

The Company’s Code of Business Conduct and Ethics, Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter and Nominating/Corporate Governance Committee Charter are available, free of charge, on our web site at www.santarus.com. Please note, however, that the information contained on the web site is not incorporated by reference in, or considered part of, this Proxy Statement. We will also provide copies of these documents, free of charge, to any stockholder upon written request to Investor Relations, Santarus, Inc., 3611 Valley Centre Drive, Suite 400, San Diego, California 92130.

Report of the Audit Committee

The audit committee oversees the Company’s financial reporting process on behalf of the board of directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the audit committee reviewed and discussed the audited

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consolidated financial statements and the related financial statement Schedule II in the Company’s annual report with management, including a discussion of any significant changes in the selection or application of accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements and the effect of any new accounting initiatives.

The audit committee reviewed and discussed with Ernst & Young LLP, which is responsible for expressing an opinion on the conformity of the Company’s audited consolidated financial statements and related schedule with generally accepted accounting principles, its judgments as to the quality and acceptability of the Company’s accounting principles and such other matters as are required to be discussed with the audit committee by the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), including PCAOB Interim Auditing Standard AU Section 380, Communication With Audit Committees, the rules of the SEC, and other applicable regulations. In addition, the audit committee has discussed with Ernst & Young LLP its independence from management, and the Company has received from Ernst & Young LLP the written disclosures and the letter required by Rule 3526 of the PCAOB (Communication with Audit Committees Concerning Independence) and has considered the compatibility of non-audit services with Ernst & Young LLP’s independence.

The audit committee met with Ernst & Young LLP to discuss the overall scope of its services, the results of its audit and reviews, its evaluation of the Company’s internal controls, including internal control over financial reporting, and the overall quality of the Company’s financial reporting. The audit committee’s meetings with Ernst & Young LLP were held with and without management present. The audit committee is not employed by the Company, nor does it provide any expert assurance or professional certification regarding the Company’s consolidated financial statements. The audit committee relies, without independent verification, on the accuracy and integrity of the information provided, and representations made, by management and the Company’s independent registered public accounting firm.

In reliance on the reviews and discussions referred to above, the audit committee recommended to the Company’s board of directors that the audited consolidated financial statements and related schedule and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Company’s annual report for the year ended December 31, 2012. The audit committee and the Company’s board of directors also have recommended, subject to stockholder approval, the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2013.

This report of the audit committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

The foregoing report has been furnished by the audit committee.

Daniel D. Burgess, Chairman

David F. Hale

Kent Snyder

Compensation of Directors

Non-employee members of our board of directors receive a combination of cash compensation, in the form of annual retainers and meeting stipends, and equity incentive compensation, in the form of stock option awards, for their service on our board of directors. Any board member who is also an employee of the Company does not receive separate compensation for service on our board of directors.

Cash Compensation

2012 Fiscal Year

For the 2012 fiscal year, each non-employee director received an annual cash retainer of $45,000. The chairman of our board received an additional annual retainer of $40,000 and the chairs of the following board committees received the following additional annual retainers: (i) audit committee, $20,000; (ii) compensation committee, $15,000; and (iii)

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nominating/corporate governance committee, $10,000. In addition, the non-chair members of the following board committees received the following additional annual retainers: (i) audit committee, $10,000; (ii) compensation committee, $7,500; and (iii) nominating/corporate governance committee, $5,000.

For each meeting of the board attended during 2012 in excess of ten board meetings, each non-employee director was entitled to receive an additional cash meeting stipend of $2,000 for each such meeting attended in-person or $1,000 for each such meeting attended by telephone.

In addition, non-employee directors also received reimbursement of their reasonable out-of-pocket expenses in connection with attendance at board and committee meetings.

Additional information about the cash compensation paid to our non-employee directors during the 2012 fiscal year is reflected in the table captioned “Director Compensation Table,” set forth below.

2013 Fiscal Year

For the 2013 fiscal year, each non-employee director is entitled to receive the same amounts of cash compensation as described above for the 2012 fiscal year.

Equity Incentive Compensation

Our non-employee directors also receive equity incentive compensation in connection with their service on our board of directors.

2012 Fiscal Year

For the 2012 fiscal year, on June 13, 2012, the date of the 2012 annual meeting of our stockholders, (i) each continuing non-employee director received an option to purchase 32,000 shares of common stock, (ii) the chairman of our board of directors received an additional annual option to purchase 10,000 shares of common stock, (iii) the chairman of our audit committee received an additional annual option to purchase 5,000 shares of common stock, (iv) the chairman of our compensation committee received an additional annual option to purchase 5,000 shares of common stock and (v) the chairman of our nominating/corporate governance committee received an additional annual option to purchase 2,500 shares of common stock. In addition, our policy provides that each non-employee director who is initially elected to our board of directors will be granted an option to purchase 35,000 shares of our common stock in connection with his or her initial election to our board of directors.

These options have an exercise price per share equal to 100% of the fair market value of the underlying stock at the time of grant. The options granted to non-employee directors in connection with their initial election to our board of directors will vest in three equal annual installments on each yearly anniversary of the date of grant, subject to the director’s continuing service on our board of directors on such dates. The other options granted to non-employee directors described above will vest in twelve equal monthly installments on each monthly anniversary of the date of grant, subject to the director’s continuing service on our board of directors on such dates. To the extent vested as of a non-employee director’s termination of membership on our board of directors, each such option will be exercisable for 12 months following such director’s termination of membership on our board of directors. The term of each option granted to a non-employee director is ten years. Upon a change of control (as defined in our Amended and Restated 2004 Equity Incentive Award Plan and our 1998 Stock Option Plan), each option granted to a non-employee director will become 100% vested in accordance with the terms of such plans.

Additional information about stock option awards granted during the 2012 fiscal year to our non-employee directors is reflected in the table captioned “Director Compensation Table,” set forth below.

2013 Fiscal Year

On June 11, 2013, the date of the 2013 annual meeting of our stockholders, each continuing non-employee director will receive annual option grants in the same amount and on the same terms as described above in respect of the annual option grants made on the date of our 2012 annual stockholders meeting.

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DIRECTOR COMPENSATION TABLE FOR 2012

The table below summarizes the compensation paid by the Company to non-employee directors for the fiscal year ended December 31, 2012.

Director Attendance at Annual Meetings

The Company does not have a formal policy regarding attendance by members of our board of directors at our Annual Meeting. Seven of our eight then-current directors attended our 2012 annual meeting of stockholders.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our common stock as of March 31, 2013 for:

Information with respect to beneficial ownership has been furnished by each executive officer, director, or beneficial owner of more than 5% of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to the securities. Except as indicated by footnote, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The number of shares of common stock used to calculate the percentage ownership of each listed person includes the shares of common stock underlying options or warrants held by such persons that are exercisable as of May 30, 2013, which is 60 days after March 31, 2013.

Percentage of beneficial ownership is based on 64,630,085 shares of common stock outstanding as of March 31, 2013.

Unless otherwise indicated, the address for the following stockholders is c/o Santarus, Inc., 3611 Valley Centre Drive, Suite 400, San Diego, CA 92130.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Our Executive Officers and Senior Management

The following table sets forth information as to persons who serve as our executive officers and senior management as of March 31, 2013.

Gerald T. Proehl serves as our President and Chief Executive Officer and as a director. Mr. Proehl has served in these capacities since January 2002. From March 2000 through December 2001, Mr. Proehl was our President and Chief Operating Officer. From April 1999 to March 2000, Mr. Proehl was our Vice President, Marketing and Business Development. Prior to joining Santarus, Mr. Proehl was with Hoechst Marion Roussel, Inc., a global pharmaceutical company, for 14 years, where he served in various capacities in multiple therapeutic areas including gastrointestinal, cardiovascular, wound care and central nervous system, and from March 1997 to April 1999 served as Vice President of Global Marketing. While at Hoechst Marion Roussel, Mr. Proehl was responsible for the marketing of gastrointestinal products Carafate and Pentasa, among products in several other therapeutic areas. Mr. Proehl holds a B.S. in education from the State University of New York at Cortland, an M.A. in exercise physiology from Wake Forest University and an M.B.A. from Rockhurst College.

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Wendell Wierenga, Ph.D. serves as our Executive Vice President, Research and Development and has held this position since June 2011. From 2007 to 2011, Dr. Wierenga served as Executive Vice President, Research and Development of privately held Ambit Biosciences Corporation, where he was responsible for all research and drug development activities including clinical, regulatory affairs and manufacturing. From 2003 to 2007, he was Executive Vice President, Research and Development of Neurocrine Biosciences, Inc., where he led all research and drug development activities. From 2000 to 2003, Dr. Wierenga served as the Chief Executive Officer of biotechnology company Syrrx, Inc., a spinout from the Genomics Institute of the Novartis Research Foundation. Dr. Wierenga served 10 years with Warner-Lambert, joining as Senior Vice President of Research for Parke-Davis, the company’s pharmaceutical research division, and promoted in 1999 to Senior Vice President, Worldwide Pharmaceutical Sciences, Technologies and Development. He began his career in 1974 as a research scientist at The Upjohn Company and was Director of Cancer and Viral Diseases Research when he left in 1990. Dr. Wierenga holds a B.A. in chemistry from Hope College and a Ph.D. in chemistry from Stanford University.

E. David Ballard II, M.D. serves as our Senior Vice President, Medical Affairs and Pharmacovigilance. Dr. Ballard joined Santarus in March 2004 as Vice President, Clinical Research, was appointed Vice President, Medical Affairs in September 2005, was promoted to Vice President, Clinical Research and Medical Affairs in March 2006, was promoted to Senior Vice President, Clinical Research and Medical Affairs in September 2008 and appointed to his current position in February 2011. From March 2000 to February 2004, Dr. Ballard served in various positions at TAP Pharmaceutical Products Inc., a pharmaceutical company, most recently serving as Therapeutic Area Head, Gastroenterology and Internal Medicine. From July 1997 to March 2000, Dr. Ballard was a Medical Director at Abbott Laboratories, a pharmaceutical company. Dr. Ballard holds a B.S. in biology from Morehouse College and an M.D. from the Medical College of Ohio. Dr. Ballard is also certified as a gastroenterologist by the American Board of Internal Medicine.

Maria Bedoya-Toro, PhD serves as our Senior Vice President, Regulatory Affairs and Quality Assurance. Dr. Bedoya-Toro joined Santarus in May 2007 as Vice President, Regulatory Affairs and Quality Assurance, and was promoted to her current position in February 2011. She previously served as Senior Director Regulatory Affairs at Eisai Medical Research Inc. from November 2006 to May 2007, moving to Eisai from Ligand Pharmaceuticals, Inc. when Ligand divested their oncology products to Eisai in November 2006. Dr. Bedoya-Toro worked as Senior Director Global Regulatory Affairs and Compliance at Ligand from 2003 to 2006. From 2000 to 2003 she served as Director Global Regulatory Affairs at Baxter Hyland Immuno. From 1998 to 2000 Dr. Bedoya-Toro worked at BASF Bioresearch Corporation as Director Regulatory Affairs/Quality, and from 1996 to 1998 she worked as Director Quality Assurance and Regulatory Compliance at Amylin Pharmaceuticals, Inc. From 1988 to 1996 Dr. Bedoya-Toro worked at Rhone-Poulenc Rorer, Inc. in a number of increasingly responsible positions in regulatory compliance, quality assurance, quality control and compliance. Dr. Bedoya-Toro holds an M.B.A. from the University of Chicago and a Ph.D. in bio-analytical chemistry from Ohio University. In addition she has an M.A. in bio-analytical chemistry and a B.S. in chemistry from Western Michigan University.

Debra P. Crawford serves as our Senior Vice President, Chief Financial Officer, Treasurer and Secretary. Ms. Crawford joined Santarus in November 2000 as Vice President, Chief Financial Officer, Treasurer and Secretary and was promoted to her current position in December 2003. Prior to joining Santarus, Ms. Crawford served as Vice President, Chief Financial Officer and Treasurer from July 1998 to May 2000 for Women First HealthCare, Inc., a specialty healthcare company. Ms. Crawford was also Assistant Secretary of Women First from July 1998 to February 1999 and Secretary from March 1999 to May 2000. From May 2000 to October 2000 and from March 1997 to August 1998, Ms. Crawford was self-employed and provided financial consulting services in the area of corporate development and in the capacity of acting chief financial officer. Ms. Crawford also served as Chief Financial Officer, Vice President of Finance and Administration and Treasurer of IVAC Holdings, Inc. from January 1996 to December 1996 and of IVAC Medical Systems, Inc., a medical device company, from January 1995 to December 1996. From September 1981 to December 1994, Ms. Crawford served in various financial positions within companies of the medical device division of Eli Lilly & Company. Ms. Crawford holds a B.S. in business administration from San Diego State University.

Julie A. DeMeules serves as our Senior Vice President, Human Resources. Ms. DeMeules joined Santarus in January 2004 as Vice President, Human Resources and was promoted to her current position in February 2006. From January 2000 to November 2003, Ms. DeMeules served as Vice President, Human Resources at Quidel Corporation, a

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manufacturer and distributor of medical diagnostic products. From February 1991 to January 2000, Ms. DeMeules was employed with Advanced Tissue Sciences, Inc., a biotechnology company, most recently serving as Vice President, Human Resources. Prior to joining Advanced Tissue Sciences, Ms. DeMeules served as Director of Human Resources at Square D Corporation, a provider of electrical products, from June 1990 to February 1991. Prior to joining Square D, Ms. DeMeules served for several years as Vice President of Human Resources of Signet Armorlite, Inc., a manufacturer and distributor of ophthalmic lenses and supplies. Ms. DeMeules holds a B.A. in business administration from the University of San Diego and an M.B.A. from San Diego State University.

William C. Denby, III serves as our Senior Vice President, Commercial Operations. Mr. Denby has held this position since he joined Santarus in February 2002. Prior to joining Santarus, from October 2001 to February 2002, Mr. Denby served as Senior Vice President of Commercial Operations of Agouron Pharmaceuticals, Inc., a provider of HIV and other specialty pharmaceutical products that was acquired by Pfizer Inc. From June 1997 to October 2001, Mr. Denby served as Senior Vice President and Vice President of Sales and Marketing for Agouron. From January 1995 to June 1997, Mr. Denby served as Senior Director of Sales and Marketing and Senior Director, Commercial and Marketing Affairs for Agouron. Prior to that, Mr. Denby was at Marion Laboratories, Inc. for 18 years, holding various positions in corporate finance, strategic planning, and sales and marketing. While at Marion Laboratories, Mr. Denby was responsible for promoting a diverse product line which included brands such as Cardizem^®, Nicorette^® and the duodenal ulcer drug Carafate, and he helped secure managed care formulary acceptance for these products. Mr. Denby holds a B.A. in English from the State University of New York at Fredonia and an M.B.A. from Rockhurst College.

Carey J. Fox, J.D. serves as our Senior Vice President, General Counsel. Ms. Fox joined Santarus as Senior Director, Legal Affairs in March 2002, was promoted to Vice President, Legal Affairs in May 2004, was promoted to Vice President, General Counsel in March 2006 and was promoted to her current position in September 2008. Prior to joining Santarus, Ms. Fox served as Director, Legal Affairs for Elan Pharmaceuticals, Inc., a pharmaceutical company, from January 2002 to March 2002. Prior to joining Elan, Ms. Fox was associated with the law firm of Brobeck, Phleger & Harrison LLP from May 1998 to December 2001 and with the law firm of Fennemore Craig, P.C. from January 1996 to May 1998, where she represented a variety of clients in general corporate and securities law matters. Ms. Fox is a member of the State Bar of California and holds a B.A. in social ecology from the University of California, Irvine and a J.D. from Arizona State University.

Warren E. Hall serves as our Senior Vice President, Manufacturing and Product Development. Mr. Hall joined Santarus in July 2001 as Vice President, Manufacturing and Product Development and was promoted to his current position in December 2003. Prior to joining Santarus, Mr. Hall served as Senior Director of Development from July 2000 to July 2001 at Dura Pharmaceuticals, Inc., a specialty pharmaceutical company that was acquired by Elan Corporation, plc, a pharmaceutical company. Mr. Hall served as Senior Director of Program Management for the pulmonary group at Dura from February 1999 to July 2000, and as Senior Director of Manufacturing from July 1998 to February 1999. From November 1995 to June 1998, Mr. Hall served as Director of Manufacturing Operations at Cell Therapeutics, Inc., a cancer treatment company. Prior to Cell Therapeutics, Mr. Hall was with Mallinckrodt, Inc., a pharmaceutical and specialty chemical company, for 17 years, serving in various capacities, most recently as Director of Worldwide Manufacturing. Mr. Hall holds a B.A. in chemistry and biology from Greenville College and an M.S. in organic chemistry from Southern Illinois University.

Michael D. Step serves as our Senior Vice President, Corporate Development. Mr. Step has held this position since he joined Santarus in February 2005. Prior to joining Santarus, he served from August 2000 to February 2005 with Amylin Pharmaceuticals, Inc., a biopharmaceutical company, most recently as Vice President, Corporate Development. In this capacity, he was responsible for leading corporate development activities, including product licensing, strategic planning, and mergers and acquisitions evaluations. Prior to Amylin, he was Senior Director, Business Development at Dura Pharmaceuticals, Inc., a pharmaceutical company, from May 1998 to July 2000. In this position, his duties included licensing of marketed pharmaceutical products. Prior to that, he served in corporate development and strategic planning at Hoffmann-La Roche and sales and management roles at Roche Labs and Syntex Labs. Mr. Step holds a B.A. in political science from Vanderbilt University and an M.B.A. from the University of Southern California.

Mark C. Totoritis, M.D. serves as our Senior Vice President, Clinical Research. Dr. Totoritis joined Santarus in September 2010 as Senior Vice President, Biologics and was appointed to his current position in February 2011. From 2007 to September 2010, Dr. Totoritis was associated with Covella Pharmaceuticals, Inc., a start-up biotechnology company that he co-founded and for which he served as Chief Medical Officer until its acquisition by Santarus in

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September 2010. From 2003 to 2006 he was Vice President of Medical Research and Head of the Immunology/Rheumatology Therapeutics Group at Biogen Idec, Inc. Dr. Totoritis also worked as Head of the Autoimmune and Inflammatory Diseases Group at IDEC Pharmaceuticals Corp. from 1997 through its merger with Biogen, Inc. in 2003, rising to the position of vice president. He played a key role in the development and approval for rheumatoid arthritis of Rituxan^®, a biologic drug sold by Genentech, Inc. and Biogen Idec and also approved for non-Hodgkin’s lymphoma. Dr. Totoritis worked at Advanced Tissue Sciences, Inc. from 1995 to 1997, where his efforts contributed to the approval of the company’s first bioengineered human tissue product for the treatment of burn wounds. Earlier in his career, while at Syntex Research/Roche Bioscience, Dr. Totoritis was a major contributor to the development of CellCept^® for use in patients undergoing solid organ transplantation. He holds an A.B. in human biology from Stanford University and an M.D. from Eastern Virginia Medical School. Dr. Totoritis is board certified in internal medicine and rheumatology by the American Board of Internal Medicine.

Blake A. Boland serves as our Vice President, Sales. Mr. Boland joined Santarus in January 2004 as Director, National Sales and was promoted to his current position in July 2004. Prior to joining Santarus, Mr. Boland was with Aventis Pharmaceuticals, a global pharmaceutical company, for 16 years. From November 1998 to December 2003, Mr. Boland served as a Regional Sales Director, where he was responsible initially for building a new primary care sales organization in the western U.S. During his career with Aventis and predecessor companies, Mr. Boland held various positions in sales, marketing and sales management in such therapeutic areas as gastroenterology, cardiovascular, respiratory, diabetes and anti-infectives. Mr. Boland holds a B.A. in business administration from Graceland College and an M.B.A. from Rockhurst College.

Teri L. Chuppe serves as our Vice President, Corporate Controller. Ms. Chuppe joined Santarus as Director, Finance and Controller in April 2001, was promoted to Senior Director, Finance and Controller in May 2004, was promoted to Executive Director, Finance and Controller in March 2006 and was promoted to her current position in April 2011. Prior to joining Santarus, Ms. Chuppe served as Director, Finance and Controller for Trega Biosciences, Inc., a biotechnology company, from July 2000 to April 2001 and served as Controller for Women First HealthCare, Inc., a specialty healthcare company, from November 1998 to July 2000. From August 1995 to November 1998, Ms. Chuppe served as Senior Accounting Manager for Amylin Pharmaceuticals, Inc., a specialty biopharmaceutical company, and from January 1989 to July 1995, she served in various financial positions for IVAC Corporation, a company within the medical device division of Eli Lilly & Company. From July 1985 to December 1988, Ms. Chuppe was with Arthur Andersen & Co. Ms. Chuppe holds a B.S. in business administration from San Diego State University.

Jonathan M. Hee serves as our Vice President, Commercial Affairs. Mr. Hee has held this position since he joined Santarus in January 2004. From October 2000 to December 2003, Mr. Hee served as Vice President, Sales and Marketing Services at Agouron Pharmaceuticals, Inc., a provider of HIV and other specialty pharmaceutical products, that was acquired by Pfizer Inc. From October 1996 to October 2000, Mr. Hee served as Director and Senior Director, Sales and Marketing Services for Agouron. Mr. Hee was a Senior Manager of Segment Marketing for Agouron from November 1995 to October 1996. Prior to joining Agouron, Mr. Hee was with Gensia Inc., a cardiovascular and multi-source injectable drug company, where he held various management roles including Associate Director positions in marketing and market planning. Mr. Hee holds a B.S. in chemical engineering from Stanford University and an M.B.A. from Harvard University.

Martha L. Hough serves as our Vice President, Finance and Investor Relations. Ms. Hough has held this position since she joined Santarus in January 2005. From August 2002 to December 2004, and September 1998 to October 1999, Ms. Hough was a self-employed consultant to medical technology and pharmaceutical companies. From November 1999 to July 2002, Ms. Hough was Vice President, Business Development, and Chief Financial Officer of LMA North America, Inc., a profitable private medical device company. From 1987 to 1998, Ms. Hough worked in various finance, investor relations, and marketing positions at Gensia Sicor, Inc., serving as Vice President, Finance and Corporate Communications there from January 1995 to June 1998. Ms. Hough holds a B.S. in psychology from Colorado State University and an M.B.A. from the Tuck School of Business at Dartmouth College.

Thomas J. Joyce serves as our Vice President, Marketing and National Accounts. Mr. Joyce has held this position since he joined Santarus in January 2004. From April 2002 to January 2004, Mr. Joyce served as Senior Director, Marketing at Neurocrine Biosciences, Inc., a drug discovery and development company. From July 1999 to March 2002, Mr. Joyce served as Senior Director, Global Marketing Planning of Agouron Pharmaceuticals, Inc., a provider of HIV and other specialty pharmaceutical products that was acquired by Pfizer Inc. From September 1997 to June 1999

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and from May 1996 to August 1997, Mr. Joyce served as Associate Director of Corporate Development and Senior Market Manager, respectively, of Agouron. Prior to joining Agouron, Mr. Joyce held various sales and sales management positions at Hoechst Marion Roussel, Inc. Mr. Joyce holds a B.A. in psychology from the University of Dayton.

Compensation Discussion and Analysis

This section discusses the material elements of the compensation awarded to, earned by or paid to our Named Executive Officers consisting of our principal executive and principal financial officers and our three most highly compensated individuals who were serving as executive officers on the last day of the fiscal year ending December 31, 2012, as follows:

Executive Compensation Program Overview

Our compensation programs for our executive officers and other employees are designed to:

To accomplish those goals, compensation for our employees, including our executive officers, generally consists of the following elements: (1) base salary, (2) annual cash bonuses, (3) long-term incentives through stock option awards and stock ownership and (4) other welfare and retirement savings benefits. In addition, our executive officers are entitled to potential payments upon specified termination or change in control events.

The compensation committee of our board of directors has the primary authority to determine compensation for our executive officers. In addition, the compensation committee, together with the remaining independent members of our board of directors, has authority to review the individual performance and compensation of Gerald T. Proehl, our President and Chief Executive Officer, as well as to establish and determine achievement of our annual corporate goals. Each year, our compensation committee and the remaining independent members of our board of directors review the compensation of Mr. Proehl, as well as his individual performance for the calendar year under review and the Company’s overall performance. The compensation committee also reviews compensation for our other executive officers on an annual basis and his or her individual performance for the calendar year under review. To aid the compensation committee’s review, Mr. Proehl provides a recommendation concerning compensation and performance for each executive officer, excluding himself. Management does not participate in the final deliberations of the compensation committee (or of the independent members of our board of directors in the case of Mr. Proehl) with regard to their own compensation. The annual determination of salary and equity awards for our executive officers and

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Mr. Proehl for the 2012 fiscal year took place in February 2012, and the determination of bonuses earned for performance during the 2012 fiscal year took place in February 2013.

The compensation committee’s overall objective, or compensation philosophy, when establishing levels of compensation for a particular executive officer for the 2012 fiscal year was to target total cash compensation at the 50^th percentile level and equity compensation at the 75^th percentile, when compared to comparable positions within other comparable specialty pharmaceutical companies, or peer companies. The compensation committee has established this philosophy to emphasize variable and performance-based compensation over fixed compensation, to better manage cash burn and to align the long-term goals of executives and stockholders towards growth in stock price. The compensation committee has determined that targeting total cash compensation at the 50^th percentile is appropriate to help ensure that our executive officers are receiving cash compensation at a level commensurate with their peers at similarly situated companies, and that targeting equity compensation at the 75^th percentile is appropriate given the “at risk” nature of equity compensation and the alignment with stockholders’ interests created by the awarding of equity compensation. To ensure that the compensation committee’s executive compensation decisions for the 2012 fiscal year were consistent with this philosophy, the committee established a list of peer companies. This list consists of those specialty pharmaceutical companies that the compensation committee determined were comparable to the Company, or projected to be comparable in the near future, in various regards, including the nature of operations, stage of development, market capitalization, total revenues and/or number of employees, as well as after considering companies that compete with the Company, companies with a commercial organization in place that earn revenue from the sale of products, geographically local companies and companies that participate in Radford surveys (in order to have detailed compensation data for more executive officers). Various companies were removed from last year’s list of peer companies because such companies were either acquired (such as Cypress Biosciences Inc., Inspire Pharmaceuticals, Inc. and ZymoGenetics Inc.), reduced their commercial operations, fell substantially below comparable market capitalization or increased market capitalization beyond a comparable level (such as Alkermes Inc.), or were otherwise not comparable (such as Sucampo Pharmaceuticals, Inc., which has a non-comparable ownership structure). Accordingly, as companies were removed, the compensation committee added new ones (such as Allos Therapeutics Inc., Depomed, Inc., Dyax Corp., Somaxon Pharmaceuticals, Inc., and Zogenix, Inc.) based on a consideration of the factors described above, in order to keep the number of companies generally consistent from year to year. Following is the final list of peer companies approved by the compensation committee in connection with 2012 fiscal year compensation determinations:

To assist with the analysis of executive compensation for the 2012 fiscal year, the compensation committee engaged Radford to provide compensation consulting services. Radford reports directly to the compensation committee, and the committee has the sole authority to hire, fire and direct the work of Radford as its advisor. For the 2012 fiscal year, the compensation committee requested Radford to advise it on a variety of compensation-related issues, including:

In addition, Radford also provides the Company with non-customized salary survey data that is utilized by management in connection with reviewing salaries. The compensation committee believes that Radford is able to provide independent, objective compensation advice to the compensation committee. Other than providing the advice

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and services described above, Radford provided no other services to either the Company or the compensation committee during the 2012 fiscal year, and the compensation committee is not aware of any conflict of interest that exists that would prevent Radford from being so independently engaged. Based on the above and its review of the factors set forth under Rule 10C-1 of the Exchange Act the compensation committee assessed the independence of Radford and concluded that no conflict of interest exists that would prevent Radford from independently representing the compensation committee.

The third party survey data presented by Radford was designed to ensure that the executive compensation decisions were consistent with the overall compensation philosophy and included survey data relating to levels of base salaries, incentive cash bonuses and equity awards from the Radford Global Life Sciences Survey and proxy data for executive positions within the 22 peer companies described above. When reviewing the third party survey data, the compensation committee considered whether the total cash and equity compensation for our executive officers targeted the 50^th and 75^th percentiles, respectively, when compared to compensation paid to executives holding comparable positions within our peer companies. The compensation committee compared the executive compensation programs as a whole and also compared the pay of individual executives if the jobs were sufficiently similar to make the comparisons meaningful.

The compensation committee also utilized “tally sheets,” prepared with the assistance of management, when making its executive compensation decisions for the 2012 fiscal year. The “tally sheets” described the nature and/or value of each element of compensation payable to each executive officer, and enabled the compensation committee to evaluate each compensation element in the context of the executive’s overall total compensation. The specific information set forth in the “tally sheets” was similar to the information set forth in the tables following this “Compensation Discussion and Analysis” section and included the following information: a summary description of total compensation, a description of options granted and outstanding and a description of potential payments upon termination or change in control.

Elements of the Executive Compensation Program

Base Salary

As a general matter, the base salary for each executive officer is initially established and approved by the compensation committee at the time the officer is hired, taking into account the officer’s qualifications, experience, role and responsibilities, prior salary and competitive salary information. Under the terms of our executive officer employment agreements, each officer is entitled to an annual review of his or her base salary. Any year-to-year adjustments to each executive officer’s base salary are determined by an assessment by the compensation committee (with assistance from management as described above and with the involvement of the independent members of our board of directors, with respect to Mr. Proehl) of her or his individual performance (including the executive’s accomplishments and effectiveness), overall Company performance, the Company’s budget for salary increases, the officer’s qualifications, experience, role and responsibilities, and competitive salary information. In assessing competitive salary information, the compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) review and consider independent third party data related to salary levels for similar executive positions in our peer companies, as described above.

In connection with the annual review of his performance at the scheduled compensation committee and board of directors meetings in February 2012, Mr. Proehl received a 3% salary increase to his level of base salary, which was effective in March 2012 and resulted in an increase in Mr. Proehl’s base salary from $586,845 to $604,450. At this same time, our other Named Executive Officers each received an increase in his or her level of base salary ranging from 1.78% to 4.69% effective in March 2012. The increase in base salary for each Named Executive Officer was as follows: Debra P. Crawford received a 3.0% increase from $344,096 to $354,419 ; Carey J. Fox received a 4.69% increase from $336,498 to $352,266; Warren E. Hall received a 4% increase from $308,123 to $320,448; and Wendell Wierenga received a 1.78% increase from $400,000 to $407,100. Dr. Wierenga’s salary increase was prorated based on his start date in June 2011.

In determining these adjustments, the compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) considered each executive officer’s individual performance, the Company’s overall performance and competitive salary information, based on the third party survey data compiled by Radford. As described above, when reviewing the third party survey data, the compensation committee (and the independent

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members of our board of directors, with respect to Mr. Proehl) considered whether total cash compensation for our executive officers targeted the 50^th percentile of the total cash compensation paid to executives holding comparable positions within our peer companies. Consistent with our overall compensation philosophy, the total cash compensation for our executive officers for the 2012 fiscal year, including the base salary levels described above and the target annual cash bonuses (assuming a 100% level of attainment) described below, targeted the 50th percentile of the total target cash compensation for executives holding comparable positions within our peer companies.

Annual Cash Bonuses

Our executive officers, as well as all of our other employees (with the exception of our field sales representatives and certain other field-based commercial employees), were eligible to receive annual cash bonuses pursuant to our 2012 bonus plan.

Payments for executive officers under our 2012 bonus plan were based 100% on achieving established corporate goals (rather than on achievement of individual goals) and were determined as a percentage of each executive officer’s base salary. We believe that by basing the potential bonus payments for executive officers solely on achievement of corporate goals, we ensure that each executive officer’s performance is fully aligned with the overall executive team and Company objectives, as well as focused on increasing stockholder value by providing incentives for corporate performance. The performance goals are established each year so that in the board’s and compensation committee’s determination they are not certain to be attained absent strong performance by the executive officers and the Company as a whole.

Under the terms of our 2012 bonus plan, the target bonus for Mr. Proehl, our President and Chief Executive Officer, was 65% of base salary, the target bonus for Dr. Wierenga, our Executive Vice President, Research and Development, was 50% of base salary and the target bonus for each of our other executive officers was 40% of base salary. These target bonus opportunities were unchanged from those under our 2011 bonus plan. The target bonus percentage amounts were established through an analysis that included a review of third party survey data for our peer companies. As described above, when reviewing the third party survey data, the compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) considered whether total cash compensation for our executive officers targeted the 50th percentile of the total cash compensation paid to executives holding comparable positions within our peer companies, including in the case of the target bonuses, by assuming our executive officers fully achieve the corporate performance goals established by our board. Each executive officer was then eligible to receive a bonus ranging from zero to 150% of his or her target bonus, based on the level of the Company’s achievement of its corporate performance goals for the 2012 fiscal year, which goals were established by our board at its scheduled meeting in February 2012.

At its scheduled meeting in February 2013, the independent members of the board assessed the Company’s performance during the 2012 fiscal year against the 2012 corporate performance goals as follows:

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As part of its assessment, the independent board members noted the Company’s strong performance related to its financial goals, including significantly exceeding its goal related to adjusted EBITDA. Although the total revenue goal was not achieved in 2012, revenues of $218 million for 2012 was a record achievement for the Company and represented substantial growth over the total revenue for 2011, which was $118.8 million. In addition, the board noted the achievement of the Uceris NDA approval and the successful completion of the Phase III clinical studies for Ruconest and rifamycin SV MMX. Although the total revenue and Uceris patient enrollment goals were not fully achieved, the Board noted the positive outcomes achieved in 2012 related to the Zegerid^® and Glumetza^® patent litigation, as well as the significant year-over-year increase in the Company’s stock price. Based on these assessments by the independent members of the board, the overall level of achievement under the 2012 bonus plan was established at 130%.

As a result of the board’s determination, for the 2012 fiscal year, Mr. Proehl received a bonus of $510,760, which was equal to approximately 84.5% of Mr. Proehl’s base salary, Dr. Wierenga received a bonus of $264,615, which was equal to approximately 65% of Dr. Wierenga’s annual base salary, and each of our other Named Executive Officers received bonuses equal to approximately 52% of their respective base salaries. The specific amounts of the cash bonuses awarded to our Named Executive Officers for the 2012 fiscal year are reflected in the Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation.”

Long-Term Incentives

Stock Option Awards

Our long-term incentives are primarily in the form of stock option awards, and our executive officers, along with all of the Company’s other employees, are eligible to participate in the Company’s award of stock options. As discussed above, the objective of these awards is to further enhance our executive officers’ long-term incentive to increase stockholder value and the Company’s stock price. We believe that stock option based compensation achieves this objective by directly linking the economic benefit to recipients of such awards with our Company’s stock performance. We also believe that stock option based compensation encourages employee retention because the awards are designed to vest and become exercisable over time, generally over four years.

The compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) have authority to grant stock option awards to our executive officers. In the case of stock option awards, which are generally made in connection with the compensation committee’s annual review of Company performance and executive officer performance (and the independent members of our board of directors annual review of Mr. Proehl’s performance) conducted in the first quarter of each year, the number of stock options granted to each executive officer is determined based upon input from our third party consulting firm and competitive compensation information for our peer companies. As described above, when reviewing the third party survey data, the compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) considered whether total equity compensation for our executive officers targeted the 75^th percentile of the total equity compensation paid to executives holding comparable positions within our peer companies, taking into account comparisons based on, percentage ownership, size of option grants and the Black-Scholes valuation model. The targeting of equity compensation at the 75^th percentile level, as compared to cash compensation at the 50^th percentile level, reflects the “at risk” nature of equity compensation awards and the compensation committee’s strong belief in a pay for performance culture and alignment of executive compensation to long-term increases in stockholder value. The compensation committee (and the independent members of our board of directors, with respect to Mr. Proehl) also consider overall corporate performance and each executive officer’s individual performance (including the executive’s accomplishments and effectiveness) when determining the specific number of options to be awarded. In addition, the compensation committee takes into account the number of outstanding option grants held by each executive officer, and their vested status, in determining

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the specific number of options to be awarded in order to ascertain the level of retentive value of options to each respective executive officer.

The exercise price of options granted under our stock plans has always been 100% of the fair market value of the underlying stock at the time of grant, and the Company does not have a policy of granting equity-based awards at other than the fair market value. For options granted on or after January 1, 2007, the fair market value of our common stock is determined by reference to the closing price of our common stock on the NASDAQ on the date of grant. The majority of the outstanding options held by our executive officers vest over a four-year period and are exercisable over a ten-year period following the date of grant unless employment terminates prior to such date.

Our general policy is to grant options on fixed dates during open trading windows and on dates determined in advance in the prior year, although there may be occasions when grants are made on other dates. All required approvals are obtained in advance of or on the actual grant date. We do not time the granting of our options to take advantage of any favorable or unfavorable news released by the Company.

In March 2012, in connection with the February 2012 annual review of corporate performance during 2011 and Mr. Proehl’s individual performance during 2011, Mr. Proehl was granted an option to purchase 337,500 shares of our common stock. Also at that time, each of our other Named Executive Officers were granted an option to purchase a number of shares of our common stock, ranging from 41,310 to 101,250 shares in connection with the annual review of corporate performance during 2011 and the Named Executive Officer’s individual performance during 2011. Dr. Wierenga’s option grant was prorated based on his start date in June 2011. The specific amounts of the options awarded to our Named Executive Officers for the 2012 fiscal year are reflected in the table captioned “Grants of Plan-Based Awards.”

Options granted to any of our employees under our Amended and Restated 2004 Equity Incentive Award Plan become fully vested and exercisable in the event of a change in control where the acquirer does not assume the options. In the event of a change in control where the acquirer does assume the options, such options will be subject to accelerated vesting prior to the change in control such that 50% of the unvested shares subject to the options will become vested and exercisable. In addition, assumed options will automatically become fully vested and exercisable if the holder of such options is terminated by the acquirer without cause or the holder terminates employment for good reason within 12 months after the change in control. Moreover, our executive officers are entitled to further acceleration of vesting in certain termination events under the terms of their employment agreements, as described below under the heading “Employment Agreements.”

Stock option awards granted during the 2012 fiscal year to Mr. Proehl and our other Named Executive Officers are reflected in the table captioned “Grants of Plan-Based Awards,” and outstanding stock option awards as of December 31, 2012 are reflected in the table captioned “Outstanding Equity Awards at Fiscal Year-End.” Consistent with our overall compensation philosophy, the total equity compensation granted to our executive officers during the 2012 fiscal year was targeted at the 75^th percentile of the total equity compensation for executives holding comparable positions within our peer companies.

Perquisites

We do not provide any perquisites for our executive officers.

Other Benefits

We provide benefits such as medical, dental and life insurance and disability coverage for all of our employees, including our Named Executive Officers. In addition, we have established our Amended and Restated Employee Stock Purchase Plan and a 401(k) savings/retirement plan, which are available to all eligible employees, including our Named Executive Officers. We also provide personal paid time off and other paid holidays to all employees, including our Named Executive Officers, which are similar to those provided at comparable companies.

In June 2012, the compensation committee adopted the Santarus, Inc. Deferred Compensation Plan (the “DC Plan”), effective as of August 1, 2012, for a select group of highly compensated employees of the Company, including our Named Executive Officers, pursuant to which participants may elect to defer receipt of compensation from the

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Company for purposes of retirement or otherwise. The DC Plan is intended to be a nonqualified deferred compensation plan and represents an unfunded obligation of the Company. More information on the DC Plan appears below in the table captioned “Nonqualified Deferred Compensation” and its accompanying narrative.

Tax Considerations

As part of its compensation program, the Company aims to compensate our Named Executive Officers in a manner that is tax effective for the Company. In practice, the stock options granted by the compensation committee are not subject to the deduction limitation imposed under Section 162(m) of the Internal Revenue Code, or the Code, as amended. Section 162(m) of the Code generally limits the tax deductions a public corporation may take for compensation paid to its chief executive officer and three other most highly compensated executive officers, other than its chief financial officer, to $1.0 million per executive per year, unless the compensation paid qualifies as “performance based compensation” within the meaning of Section 162(m) of the Code. Our stockholders have previously approved our stock award plans, comprised of the 1998 Stock Option Plan and the Amended and Restated 2004 Equity Incentive Award Plan, as well as have the opportunity to approve our further Amended and Restated 2004 Equity Incentive Award Plan at our 2013 Annual Meeting of Stockholders, qualifying options and stock appreciation rights under these plans as performance-based compensation intended to be exempt from the Section 162(m) limits. Other awards under these plans also may be granted with the intention of being performance-based compensation in the discretion of the compensation committee.

Risk Considerations

Our compensation committee has considered whether our executive compensation programs, which consist of base salaries, annual cash bonuses and long-term equity incentives, encourage unnecessary or excessive risk taking and has concluded they do not. Base salaries are fixed in amount and thus do not encourage risk taking. While the performance-based cash bonus awards focus on achievement of annual goals, the goals are reviewed by the board of directors to ensure overall appropriateness and are a balanced mix of financial performance metrics and operational and strategic performance metrics that are designed to translate into longer-term financial performance. Cash bonus awards are also not guaranteed and are subject to reasonable maximum caps. The compensation committee believes that the bonus program appropriately balances risk and the desire to focus executives on specific annual goals important to the Company’s success. Our long-term equity incentives help further align executives’ interests with those of the Company’s stockholders. The compensation committee believes that these equity incentives do not encourage unnecessary or excessive risk taking because the ultimate value of the awards is tied to the Company’s long-term operating performance as reflected in the Company’s long-term stock price performance. Moreover, the awards are subject to long-term vesting schedules to help ensure that executives have significant value tied to long-term stock price performance.

Employment Agreements

Our compensation committee has approved and we have entered into employment agreements with each of our executive officers, which address our executive officers’ duties and responsibilities and specify the amounts payable to our executive officers in connection with certain terminations or change in control events. Except as provided below, all of the employment agreements with our Named Executive Officers contain substantially similar terms. The payment and severance terms in the employment agreements were established based on market factors when the agreements were originally entered into, and they are reviewed periodically by our compensation committee for continued appropriateness. The potential availability of severance benefits under these agreements did not impact the analysis of the other elements of compensation for the 2012 fiscal year because such benefits serve different purposes than the other elements of compensation. The compensation committee believes these agreements are appropriate to attract and retain individuals at the executive officer level and to properly balance the interests of executives and stockholders, as executives may be asked to consider actions which create stockholder value, but may also result in loss of an executive’s position. The level of payments under the agreements are designed to be fair and reasonable considering the time it would take an executive to find a position of comparable scope.

Pursuant to the employment agreements, each Named Executive Officer is required to devote substantially all of his or her time and attention to our business and affairs. The initial base salaries of the executives are set forth in their employment agreements. The employment agreements do not provide for automatic annual increases in salary, but each

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employment agreement provides for annual salary reviews by the compensation committee. Each of the Named Executive Officers is eligible to participate in any management incentive compensation plan adopted by us or such other bonus plan as our board of directors or compensation committee may approve. The award of any bonus compensation is to be determined by the compensation committee or pursuant to a plan approved by the board of directors or compensation committee. Each of the Named Executive Officers is an at-will employee.

In November and December 2012, at the request of the compensation committee, Radford engaged in a complete review of the employment agreements and confirmed to the compensation committee that in Radford’s opinion the agreements contained provisions consistent with prevailing market practices. In connection with this review, the employment agreements of each of the Named Executive Officers was amended in March 2013, such that the bonus formulation used in determining severance payments was changed from using a three-year average (which would have then been prorated to the date of termination for all Named Executive Officers other than Mr. Proehl), to using the executive’s full target bonus for the year of termination. These changes are consistent with the arrangements of our peer group companies, as determined by Radford in its review.

Severance Benefits and Change in Control Arrangements

The employment agreements also provide each Named Executive Officer with certain severance benefits in the event his or her employment is terminated by us other than for “cause” or if the executive resigns with “good reason” (as such terms are defined in the employment agreements). Specifically, in the event of such a termination or resignation, all executives will receive a lump sum payment of 12 months of salary and an amount equal to the executive’s annual target bonus for the year of termination, 12 months healthcare and life insurance benefits continuation at our expense, plus $15,000 towards outplacement services. If such termination or resignation occurs more than 60 days prior to or more than 12 months following a change of control, that portion of the executive’s stock awards, and any unvested shares issued upon the exercise of such stock awards, which would have vested if the executive had remained employed for an additional 12 months, will immediately vest on the date of termination.

With respect to Mr. Proehl only, if such termination or resignation occurs within 60 days prior to or within 12 months following a change of control, Mr. Proehl will be entitled to receive 18 months of salary and an amount equal to his annual target bonus for the year of termination, 18 months of healthcare and life insurance benefits continuation at our expense, plus $15,000 towards outplacement services.

In addition, with respect to all executives (including Mr. Proehl), if such termination occurs within 60 days prior to or within 12 months following a change in control, all of the executive’s remaining unvested stock awards, and any unvested shares issued upon the exercise of such stock awards, will immediately vest on the date of termination.

Apart from termination, the employment agreements also provide that, in connection with a change in control of the Company, 50% of the executive’s unvested stock awards, and any unvested shares issued upon the exercise of such stock awards, will immediately become vested. This accelerated vesting supersedes any less favorable accelerated vesting provided under our Amended and Restated 2004 Equity Incentive Award Plan and our 1998 Stock Option Plan.

Each of the employment agreements also provides that payments under each employment agreement may be delayed to the extent necessary to avoid adverse tax consequences for the affected executive officer under Section 409A of the Code, as well as condition the receipt of post-termination payments and benefits on the executive’s execution and nonrevocation of a general release of claims. The agreements prohibit executives from soliciting Company employees during the applicable severance period.

The employment agreements do not provide for any type of tax “gross up” or similar reimbursement obligation by the Company in respect of “golden parachute” or any other taxes to which any of the Named Executive Officers may become subject.

Additional information concerning the potential payments our Named Executive Officers may receive in the event of termination of their employment or a change in control of the Company is provided in the table captioned “Potential Payments Upon Termination or Change in Control.”

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Say on Pay

At the 2011 annual meeting of our stockholders, more than 97% of the votes cast on the stockholder advisory vote proposal on our executive compensation program (“Say on Pay”) were in favor of our program. In addition, a majority of the votes cast on the Say on Pay frequency vote proposal at the 2011 annual meeting of our stockholders were in favor of holding a Say on Pay vote every three years. Accordingly, the board of directors determined that it will hold advisory votes on the Company’s executive compensation to its Named Executive Officers every three years and that it will also hold the required vote on frequency of stockholder votes on executive compensation at such future time in accordance with applicable laws. As a result, there was no advisory vote on the Company’s executive compensation to its Named Executive Officers during fiscal year 2012. Nonetheless, the board of directors and compensation committee reviewed the results of the Say on Pay vote in 2011 and in light of the vote outcome, decided to retain our general approach to executive compensation program through fiscal year 2012. Accordingly, we did not make any significant changes to our executive compensation policies or practices as a direct result of the outcome of the favorable Say on Pay vote.

Compensation Committee Report

The compensation committee of the Company’s board of directors has submitted the following report for inclusion in this Proxy Statement:

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on the committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, the committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 for filing with the SEC.

This report of the compensation committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.

The foregoing report has been furnished by the compensation committee.

Michael E. Herman, Chairman

David F. Hale

Kent Snyder

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SUMMARY COMPENSATION TABLE FOR 2012

The table below summarizes the total compensation paid to or earned by each of our Named Executive Officers consisting of our Chief Executive Officer, Chief Financial Officer and our three other most highly compensated executive officers for the fiscal years ended December 31, 2012, 2011 and 2010.

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GRANTS OF PLAN-BASED AWARDS FOR 2012

The table below provides information about plan-based awards granted to our Named Executive Officers during the fiscal year ended December 31, 2012.

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OUTSTANDING EQUITY AWARDS AT 2012 FISCAL YEAR-END

The table below provides information about outstanding equity awards for each of our Named Executive Officers as of December 31, 2012.

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OPTION EXERCISES FOR 2012

The table below provides information about stock option awards exercised by our Named Executive Officers during the fiscal year ended December 31, 2012.

NONQUALIFIED DEFERRED COMPENSATION FOR 2012

The DC Plan allows for deferrals by participants of up to 50% of base salary, and up to 100% of bonuses and performance-based compensation. A participant in the DC Plan may elect to have the participant’s account credited with investment gains and losses by assuming that deferred amounts were invested in one or more hypothetical investment fund options selected by the participant. Participants are permitted to change their investment elections at any time. Participants are always 100% vested in the amount they defer and the earnings, gains and losses credited to their accounts. A participant is entitled to receive a distribution under the DC Plan upon such participant’s separation from service or disability or upon an unforeseeable emergency or a change in control, in each case, within the meaning of, or in accordance with, Section 409A of the Code (“Section 409A”), as well as in the event of the participant’s death or at the time specified by the participant for an in-service or education distribution. Any acceleration in the time or schedule of any payment due under the DC Plan is

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prohibited, except as provided under Section 409A. Distributions may be made in a lump sum or in installments, based upon the participant’s election as allowed under the DC Plan.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The table below reflects the amount of compensation that each of our Named Executive Officers would be entitled to receive under his or her existing employment agreement with the Company upon termination of such executive’s employment in certain circumstances. The amounts shown assume that such triggering event was effective as of December 31, 2012 (with the amount of any severance based on the executive’s base salary as of such date), and thus include amounts earned through such time and are only estimates of the amounts that would be paid out to such executives upon a termination of employment. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company. Please see the section above entitled “Compensation Discussion and Analysis – Employment Agreements” for further discussion.