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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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249 E. Grand Avenue
South San Francisco, CA 94080

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 23, 2013

Dear Stockholder:

         You are cordially invited to attend the Annual Meeting of Stockholders of Onyx Pharmaceuticals, Inc., a Delaware corporation (also referred to as "we," "us," and the "Company"). The meeting will be held on Thursday, May 23, 2013 at 10:00 a.m., local time, at the San Mateo Marriott located at 1770 South Amphlett Blvd., San Mateo, California 94402 for the following purposes:

1.

To elect our two nominees for Director to hold office until the 2016 Annual Meeting of Stockholders.



2.

To approve the Company's 2005 Equity Incentive Plan, as amended ("Equity Incentive Plan") to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,800,000 shares.



3.

To approve the Company's 2013 Cash Performance Incentive Plan ("Cash Incentive Plan").



4.

To approve the Company's 1996 Employee Stock Purchase Plan, as amended ("Purchase Plan") to increase the aggregate number of shares of common stock authorized for issuance under the plan by 1,000,000 shares.



5.

To approve, on an advisory basis, the compensation of the Company's named executive officers.



6.

To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2013.



7.

To conduct any other business properly brought before the meeting.

         These items of business are more fully described in the Proxy Statement accompanying this Notice.

         The record date for our Annual Meeting is April 1, 2013. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

         Important Notice Regarding the Availability of Proxy Materials for the 2013 Annual Meeting of Stockholders to Be Held at 10:00 a.m., local time, on Thursday, May 23, 2013 at the San Mateo Marriott located at 1770 South Amphlett Blvd., San Mateo, California 94402

         The Proxy Statement and our 2012 Annual Report to stockholders are available at:

         www.proxyvote.com

         The Board of Directors recommends that you vote FOR the proposals identified above.

South San Francisco, California

April 9, 2013

You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please vote as promptly as possible in order to ensure your representation at the Annual Meeting. You may vote your shares via a toll-free telephone number or the internet, by following the instructions on the proxy card. You may also submit your proxy card for our Annual Meeting by completing, signing, dating and returning your proxy card in the pre-addressed envelope provided. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

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ONYX PHARMACEUTICALS, INC.
249 E. Grand Avenue
South San Francisco, CA 94080

PROXY STATEMENT
FOR THE 2013 ANNUAL MEETING OF STOCKHOLDERS

May 23, 2013

INFORMATION CONCERNING SOLICITATION AND VOTING

        Our Board of Directors, or "Board," is soliciting proxies for our 2013 Annual Meeting of Stockholders to be held on Thursday, May 23, 2013 at 10:00 a.m. local time at the San Mateo Marriott located at 1770 South Amphlett Blvd., San Mateo, California 94402. Our principal executive offices are located at 249 E. Grand Avenue, South San Francisco, CA 94080, and our telephone number is (650) 266-0000.

        The proxy materials, including this Proxy Statement, proxy card or voting instruction card and our 2012 Annual Report, are being distributed and made available on or about April 9, 2013. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully.

        In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the "SEC"), we have elected to provide our stockholders access to our proxy materials over the internet. Accordingly, a Notice of Internet Availability of Proxy Materials will be mailed on or about April 9, 2013 to most stockholders who owned our common stock at the close of business on April 1, 2013. Stockholders will have the ability to access the proxy materials on a website referred to in the Notice of Internet Availability of Proxy Materials or request a printed set of the proxy materials be sent to them by following the instructions in the Notice.

        The Notice of Internet Availability of Proxy Materials will also provide instructions on how you can elect to receive future proxy materials electronically or in printed form by mail. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to the proxy materials and a link to the proxy voting site. Your election to receive proxy materials electronically or in printed form by mail will remain in effect until you terminate such election.

        Choosing to receive future proxy materials electronically will allow us to more rapidly provide you with the information you need, will save us the cost of printing and mailing documents to you and will conserve natural resources.

QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

Why did I receive the Notice of Internet Availability of Proxy Materials this year instead of a full set of proxy materials?

        We have sent a Notice of Internet Availability of Proxy Materials to most of our stockholders of record and beneficial owners. Instructions on how to access the proxy materials over the internet or to request a paper copy may be found in the Notice. In addition, you may request to receive future proxy materials in printed form by mail or electronically. Your election to receive future proxy materials by mail or electronically will remain in effect until you terminate such election.

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Why did I receive a full set of proxy materials instead of a Notice of Internet Availability of Proxy Materials?

        We are providing paper copies of the proxy materials to stockholders who have previously requested to receive them. If you would like to reduce the environmental impact and the costs incurred by us in mailing proxy materials, you may elect to receive all future proxy materials electronically via email or the internet. To sign up for electronic delivery, please follow the instructions provided with your proxy materials and on your proxy card or voting instruction card, to vote using the internet and, when prompted, indicate that you agree to receive or access future stockholder communications electronically. Alternatively, you can go to www.proxyvote.com and enroll for online delivery of Annual Meeting and proxy voting materials.

How can I access the proxy materials over the internet?

        You may view and also download our proxy materials, including the 2012 Annual Report, our 2012 Form 10-K and the Notice on our website at www.onyx.com as well as www.proxyvote.com.

How can I vote my proxy over the internet or by telephone?

        Please refer to the proxy card for instructions on, and access information for, voting by telephone or over the internet.

Who can vote at our Annual Meeting?

        Only stockholders of record at the close of business on April 1, 2013 will be entitled to vote at our Annual Meeting. On this record date, there were 72,410,922 shares of common stock outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

        If on April 1, 2013 your shares were registered directly in your name with our transfer agent, Wells Fargo Bank, N.A., then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we recommend that you vote by proxy to ensure your vote is counted if you later decide not to attend the meeting.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

        If on April 1, 2013 your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at our Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account and you should follow such organization's instructions on how to do so. You are also invited to attend our Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent.

What am I voting on?

        There are six matters scheduled for a vote:

1.

Election of our two nominees for Director to hold office until the 2016 Annual Meeting of Stockholders;

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2.

Approval of the Company's Equity Incentive Plan, as amended, to among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,800,000 shares;



3.

Approval of the Company's Cash Incentive Plan;



4.

Approval of the Company's Purchase Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 1,000,000 shares;



5.

Advisory approval of the compensation of the Company's named executive officers; and



6.

Ratification of the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2013.

How do I vote?

        You may either vote "For" all the nominees to the Board or you may "Withhold" your vote for any nominee you specify. For each of the other matters to be voted on, you may vote "For" or "Against" or abstain from voting. The procedures for voting are:

Stockholder of Record: Shares Registered in Your Name

        If you are a stockholder of record, you may vote in person at our Annual Meeting, by mail, by telephone or over the internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person if you have already voted by proxy. Voting in person will revoke your proxy. There are four ways to vote:

•

To vote in person, come to our Annual Meeting and we will give you a ballot when you arrive.



•

To vote using the proxy card, complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before our Annual Meeting, we will vote your shares as you direct.



•

To vote by telephone, call the toll-free telephone number on the proxy card and follow the recorded instructions. You will need to have the control number that appears on your proxy card available when voting.



•

To vote over the internet, access our secure website registration page through the internet, as described on the proxy card, and follow the instructions. You will need to have the control number that appears on your proxy card available when voting.

        Please note that the internet and telephone voting facilities for registered stockholders will close at 11:59 p.m., EDT, on May 22, 2013.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

        If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet, as instructed by your broker or bank. To vote in person at our Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form.

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Can I vote my shares by filling out and returning the Notice?

        No. The Notice will, however, provide instructions on how to vote by internet, by telephone, by requesting and returning a paper proxy card or voting instruction card or by submitting a ballot in person at the meeting.

How many votes do I have?

        On each matter to be voted upon, you have one vote for each share of common stock you own as of April 1, 2013.

What if I return a proxy card but do not make specific choices?

        If you return a signed and dated proxy card without marking any voting selections, your shares will be voted "For" the election of our two nominees for Director; "For" approval of the Company's Equity Incentive Plan to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,800,000 shares; "For" approval of the Company's Cash Incentive Plan; "For" approval of the Company's Purchase Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 1,000,000 shares; "For" the advisory approval of executive compensation; and "For" ratification of the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2013. If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

Who is paying for this proxy solicitation?

        We will pay for the entire cost of soliciting proxies. In addition to mailing the proxy materials, our Directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We have retained Alliance Advisors, LLC, who will be paid approximately $8,000 plus out-of-pocket expenses if it solicits proxies on our behalf. We will also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one proxy card?

        You may receive more than one proxy card if your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

Can I change my vote after submitting my proxy?

        Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

•

You may submit another properly completed proxy vote by mail, telephone or internet with a later date.



•

You may send a written notice that you are revoking your proxy to our Corporate Secretary at 249 E. Grand Avenue, South San Francisco, CA 94080.



•

You may attend our Annual Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

        If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.

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When are stockholder proposals due for next year's Annual Meeting?

        To be considered for inclusion in next year's proxy materials, your proposal must be submitted in writing by December 10, 2013 to our Corporate Secretary at 249 E. Grand Avenue, South San Francisco, CA 94080. If you wish to nominate a director or submit a proposal that is not to be included in next year's proxy materials, the proposal must be received by the Company between February 24, 2014 and March 24, 2014. You are also advised to review our Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.

How are votes counted?

        Votes will be counted by the inspector of election appointed for the meeting who, with respect to the proposal to elect Directors, will separately count votes "For," "Withhold" and broker non-votes; and, with respect to other proposals, will separately count votes "For" and "Against," abstentions and, if applicable, broker non-votes.

        If your shares are held by your broker as your nominee (that is, in "street name"), you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to "discretionary" items, but not with respect to "non-discretionary" items. Discretionary items are proposals considered routine under the rules of the New York Stock Exchange on which your broker may vote shares held in street name in the absence of your voting instructions. Non-discretionary items are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested) and executive compensation, including the advisory stockholder votes on executive compensation. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes.

How many votes are needed to approve each proposal?

•

For the election of our two nominees for Class II Directors, the two nominees receiving the most "For" votes (among votes properly cast in person or by proxy) will be elected. Only votes "For" or "Withhold" will affect the outcome.



•

To be approved, Proposal 2, the approval of the Company's Equity Incentive Plan, as amended, to among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 3,800,000 shares, must receive a "For" vote from the majority of votes cast either in person or by proxy. Failure to submit a proxy card or vote at our Annual Meeting, or an abstention vote or a broker non-vote will have no effect on the outcome of Proposal 2.



•

To be approved, Proposal 3, the approval of the Company's Cash Incentive Plan, must receive a "For" vote from the majority of votes cast either in person or by proxy. Failure to submit a proxy card or vote at our Annual Meeting, or an abstention vote or a broker non-vote will have no effect on the outcome of Proposal 3.



•

To be approved, Proposal 4, the approval of the Company's Purchase Plan, as amended, to increase the aggregate number of shares of common stock authorized for issuance under the plan by 1,000,000 shares, must receive a "For" vote from the majority of votes cast either in person or by proxy. Failure to submit a proxy card or vote at our Annual Meeting, or an abstention vote or a broker non-vote will have no effect on the outcome of Proposal 4.



•

To be approved, Proposal 5, the advisory approval of the compensation of the Company's named executive officers, must receive "For" votes from the holders of a majority of shares either present in person or represented by proxy and entitled to vote. Failure to submit a proxy card or

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vote at our Annual Meeting or a broker non-vote will have no effect on the outcome of Proposal 5.

•

To be approved, Proposal 6, ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013, must receive a "For" vote from the majority of votes cast either in person or by proxy. Failure to submit a proxy card or vote at our Annual Meeting, or an abstention vote or a broker non-vote will have no effect on the outcome of Proposal 6.

What is the quorum requirement?

        A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of our outstanding shares of common stock are represented by stockholders, either in person or by proxy. On the record date, there were 72,410,922 shares of our common stock outstanding and entitled to vote. Thus, 36,205,462 shares of our common stock must be represented at our Annual Meeting, either in person or by proxy, to have a quorum.

        Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the votes present at the meeting may adjourn the meeting to another date.

How can I find the voting results from the Annual Meeting?

        Preliminary voting results will be announced at our Annual Meeting. Final voting results will be published in a current report on Form 8-K that we expect to file within four business days after our Annual Meeting. If final voting results are not available to us in time to file a current report on Form 8-K within four business days after our Annual Meeting, we intend to file a current report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional current report on Form 8-K to publish the final results.

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PROPOSAL 1: ELECTION OF DIRECTORS

        Our Amended and Restated Certificate of Incorporation and our Bylaws divide our Board into three classes: Class I, Class II and Class III, with each class having a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining Directors. A Director elected by the Board to fill a vacancy (including a vacancy created by an increase in the number of directors) serves for the remainder of the full term of the class of Directors to which he or she was elected and until that Director's successor is elected and qualified. It is our policy to invite current Directors and nominees to attend our Annual Meeting. All of the current Directors attended the 2012 Annual Meeting of Stockholders.

        The Board is presently composed of eight members. There are two Directors in Class II, each of whose term of office expires in 2013. Each of the nominees for election to Class II, Corinne H. Nevinny and Thomas G. Wiggans, is currently a member of our Board. Ms. Nevinny has served as a Director since October 2005. Mr. Wiggans has served as a Director since March 2005. Each nominee was re-elected by stockholders at the 2010 Annual Meeting. If re-elected at the 2013 Annual Meeting, the nominees would serve until the 2016 Annual Meeting and until that Director's successor is elected and has qualified, or until that Director's earlier death, resignation or removal.

        Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote at the meeting. The two nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named below. In the event that any of the nominees should be unavailable for election as a result of an unexpected occurrence, shares represented by executed proxies will be voted for the election of a substitute nominee proposed by management. Ms. Nevinny and Mr. Wiggans have each agreed to serve, if elected, and management has no reason to believe that any of them will be unable to serve.

        The Nominating and Governance Committee seeks to assemble a Board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and management experience necessary to oversee and direct the Company's business. To that end, the Committee has evaluated the Board's current members in the broader context of the Board's overall composition. The Committee maintains a goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Committee views as critical to the effective functioning of the Board.

        The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of each nominee for Director that led the Committee to believe that such nominee should continue to serve on the Board. In addition, following the biographies of the nominees are the biographies of Class I and Class III Directors which also contain information as to why the Committee believes that such Director should continue serving on the Board.

Nominees for Election for a Three Year Term Expiring at the 2016 Annual Meeting—Class II

        Corinne H. Nevinny, age 53, has served as a Director since October 2005. Ms. Nevinny is currently General Partner of LMNVC LLC, a privately held venture firm she founded in October 2010. Since December 2010 she has also served as acting President and CFO for Fight 2 B Fit, Inc., a privately held fitness company. From September 2009 to August 2010, she served as General Manager, Cardiac Surgery and Vascular, at Edwards Lifesciences Corporation, a cardiovascular technology company. Prior to assuming that position, she was President of Global Operations from December 2005 until September 2009. Prior to 2005, Ms. Nevinny served as an officer and chief financial officer to Edwards Lifesciences Corporation and chief financial officer and treasurer of Tularik, Inc., and as an Executive Director at Warburg Dillon Read LLC. Ms. Nevinny also serves on the Board of Directors of

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Neurocrine Biosciences, Inc., a public biopharmaceutical company, as well as three private companies. Since March 2013, she has also served as a Director of Avanir Pharmaceuticals, Inc., a public biopharmaceutical company. Ms. Nevinny received her undergraduate degree from Stanford University and her M.B.A. from Harvard Business School. We believe her leadership positions with publicly-traded healthcare companies qualify her to provide insight and guidance for a wide variety of Company activities, including our financial and commercial strategies, global sales of our products and strategic transactions. Her education and experience qualify Ms. Nevinny to serve as an audit committee financial expert and to provide oversight of our financial strategies.

        Thomas G. Wiggans, age 61, has served as a Director since March 2005. Since August 2010, Mr. Wiggans has served as Chief Executive Officer and Director of Dermira, Inc., a private biotechnology company he co-founded in 2010. Mr. Wiggans served as Chairman of the Board of Directors of Peplin, Inc., a public biotechnology company, from 2007 until its acquisition by LEO Pharma in 2009. From 2008 to 2009, Mr. Wiggans also served at the Chief Executive Officer of Peplin, Inc. During 2007, Mr. Wiggans served on the boards of various other private companies. Prior to 2007, Mr. Wiggans served in leadership capacities in several companies in the biotechnology and pharmaceutical industry. Until 2012, Mr. Wiggans served as a Director of Sangamo Biosciences, a public biopharmaceutical company and Somaxon Pharmaceuticals, Inc., a public pharmaceutical company; however, Mr. Wiggans did not stand for re-election as Director in 2012 for either company. Mr. Wiggans continues to serve as a Director of Lithera, Inc., a private clinical stage pharmaceutical company. He also serves on the Board of Trustees of the University of Kansas Endowment Association. In addition, he is Chairman of the Biotechnology Institute, a non-profit educational organization. Mr. Wiggans holds a B.S. in Pharmacy from the University of Kansas and an M.B.A. from Southern Methodist University. Mr. Wiggans has extensive knowledge of the biotechnology industry. He has served in leadership positions with biotechnology companies during key growth periods and has developed and launched multiple pharmaceutical products. We believe his experience qualifies him, among other things, to provide oversight of the Company's strategies for developing markets and growing revenues.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH OF OUR CLASS II NOMINEES FOR DIRECTOR

Directors Continuing in Office Until the 2015 Annual Meeting—Class I

        Paul Goddard, Ph.D., age 63, has served as a Director since February 1997 and is currently the Lead Independent Director of the Company. Dr. Goddard served as Chief Executive Officer of ARYx Therapeutics, a public biotechnology company, from April 2005 to November 2011 and has served as its Chairman of the Board of Directors since August 2003. Dr. Goddard served on the Board of Directors of Adolor Corporation, a biotechnology company, from October 2000 until December 2011. Prior to 2007, Dr. Goddard's business experience included serving as Chief Executive Officer of Elan Pharmaceuticals, Inc., and Chief Executive Officer and Chairman of the Board of Neurex Corporation. Dr. Goddard also serves on the Boards of Directors of Pathway Corporation and Hemaquest Inc. Until June 2012, Dr. Goddard also served on the board of A.P. Pharma, Inc., a public pharmaceutical company, where he was also Chairman of the Board. He completed his Ph.D. in the area of Etiology and Pathophysiology of colon cancer at St. Mary's Hospital, University of London. Dr. Goddard has extensive knowledge of, and experience in, the pharmaceutical industry. We believe his service as an executive at numerous publicly traded healthcare companies qualifies him to provide oversight to the Company's strategic plans, commercial growth, strategic transactions and global expansion and to provide insights into our industry and regulatory environment. Dr. Goddard's substantial experience in executive compensation matters, developed in his tenures as chief executive officer, is especially valuable as the Chairman of the Compensation Committee.

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        Antonio J. Grillo-López, M.D., age 73, has served as a Director since September 2002. Since 2010, Dr. Grillo-López has served as a consultant to Optimer Corp., HUYA Bioscience and Biogen Idec. Between 2007 and 2009, Dr. Grillo-López served as a consultant to various other biotech companies, including Hexal Pharma, Memgen Pharma and Tracon Pharma. From 2001 to 2008, Dr. Grillo-López served on the Board of Directors of Favrille, Inc., a public biopharmaceutical company. Prior to 2007, Dr. Grillo-López served in a Chief Medical Officer capacity with two companies in the pharmaceutical industry, served as a consultant to the U.S. National Cancer Institute and served on the Oncologic Drugs Advisory Committee of the U.S. Food and Drug Administration. Dr. Grillo-López also serves on the Board of Trustees of the Hope Funds for Cancer Research. Dr. Grillo-López is a Hematologist and Oncologist and holds a B.S. and an M.D. from the University of Puerto Rico. We believe that, by virtue of his medical degree and industry experience, Dr. Grillo-López is well-qualified to provide guidance and oversight to the Company's clinical and regulatory strategies and to its portfolio management. We also believe he is well-qualified to advise the Company regarding evaluation of product candidates in potential strategic transactions.

        Wendell Wierenga, Ph.D., age 65, has served as a Director since December 1996. Since June 2011, Dr. Wierenga has served as Executive Vice President of Research and Development of Santarus, Inc., a specialty pharmaceutical company. From January 2007 to June 2011, Dr. Wierenga served as Executive Vice President of Research and Development of Ambit Biosciences Corporation, a biopharmaceutical company. Prior to 2007, Dr. Wierenga served in leadership capacities at several biotechnology companies and in the pharmaceutical and investment fund industry. Dr. Wierenga also serves on the Board of Directors of Cytokinetics, Inc., a public biotechnology company, and XenoPort, Inc., a public pharmaceutical company. Dr. Wierenga holds a B.A. from Hope College and a Ph.D. in chemistry from Stanford University. We believe Dr. Wierenga's scientific training and experience qualify him to provide oversight of the Company's clinical- stage product candidates, and clinical and regulatory strategies. We also believe he is well-qualified to provide the Company with guidance regarding its early-stage pipeline and managing research and development investment decisions.

Directors Continuing in Office Until the 2014 Annual Meeting—Class III

        N. Anthony Coles, M.D., age 52, has served as the Company's President, Chief Executive Officer and Director since 2008. In December 2012, Dr. Coles was elected Chairman of the Board, while continuing to serve as the Company's President and Chief Executive Officer. From May 2006 to March 2008, Dr. Coles served as President, Chief Executive Officer, and Director of NPS Pharmaceuticals, Inc., a public biotechnology company. Prior to 2007, Dr. Coles served in numerous leadership positions in the biopharmaceutical and pharmaceutical industries. Dr. Coles earned his M.D. from Duke University, his master's degree in public health from Harvard College and his undergraduate degree from Johns Hopkins University. Dr. Coles currently serves as a trustee and member of the Executive Committee for the Johns Hopkins University Board of Trustees, as well as a member of the board of trustees for Johns Hopkins Medicine. During 2012, Dr. Coles also served on the boards of Laboratory Corporation of America Holdings, a public medical testing company, and Campus Crest Communities, Inc., a public student housing company. Dr. Coles has stepped down from both of these public company boards in order to focus time and energy on the expansion of Onyx, as it continues its growth in the United States and globally. He is currently a member of the board of the Biotechnology Industry Organization, the world's largest biotechnology trade association. In his leadership positions at several public companies, Dr. Coles has managed pharmaceutical product pipelines, overseen launches of numerous pharmaceutical products, and built commercial organizations. In addition, he has been responsible for strategic planning and corporate development at several public biotechnology and biopharmaceutical companies. We believe Dr. Coles' dual role as an executive officer and director gives him unique insights into the day-to-day operations of the Company, a practical understanding of the issues and opportunities that face the Company, and its strategic planning, clinical development, commercial growth, and corporate transactions.

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        Magnus Lundberg, age 56, has served as a Director since June 2000. Since September 2011, Mr. Lundberg has served as non-executive Chairman and Director of Atos Medical AB, a global medical device company. From June 2012, Mr. Lundberg has served as non-executive Chairman and Director of Airsonett AB, a private medical technology company, and from September 2012, as a non-executive Director of Convatec Inc., a medical device company, and since February 2013, Mr. Lundberg has also served as Chairman of Convatec. From 2004 until its acquisition in 2011, Mr. Lundberg served as President and Chief Executive Officer of Phadia AB, a medical diagnostic company. Prior to 2007, Mr. Lundberg served in leadership positions at several companies in the biopharmaceutical, pharmaceutical and biotechnology industries. Mr. Lundberg holds an M.Sc. in Biology and Biochemistry from Abo Akademi in Turku, Finland. Mr. Lundberg has served in leadership positions in several international companies, which we believe qualifies him, among other things, to provide valuable input to and oversight of the Company's global activities. He has experience managing companies to profitability and sustained growth and has overseen strategies for developing and balancing product pipelines. Mr. Lundberg's education and experience satisfy Nasdaq's financial literacy requirements applicable to Audit Committee members.

        William R. Ringo, age 67, has served as a Director since 2011. Mr. Ringo currently serves as Executive Partner at Sofinnova Ventures and Senior Advisor to Barclays Capital. From 2008 until his retirement in 2010, Mr. Ringo served as Senior Vice President of Strategy and Business Development for Pfizer. Prior to 2007, Mr. Ringo served in a number of leadership positions in the pharmaceutical, biotechnology and financial industries. Mr. Ringo holds a bachelor's degree and MBA from the University of Dayton. He is the current Chairman of Sangamo BioSciences, a public biopharmaceutical company, and serves as a director for Alvine Pharmaceuticals, Inc. and BioCrossroads. We believe that Mr. Ringo's experience in growing oncology businesses enables him to advise the Company in its development and commercialization of oncology products. In his leadership positions with pharmaceutical companies, Mr. Ringo has been responsible for creating and implementing strategies for launching products and growing markets. We believe that his experience qualifies him to guide the Company's strategies and operational decisions related to its commercial efforts, including our Kyprolis launch. Mr. Ringo's education and experience satisfy the financial literacy requirements of Nasdaq applicable to Audit Committee members.

INFORMATION REGARDING THE BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE

Corporate Governance

        We have adopted Corporate Governance Guidelines (the "Guidelines") that outline, among other matters, the role of the Board and the responsibilities of various Board committees. These Guidelines are available, along with other important corporate governance materials, on our website http://www.onyx.com/investors/corporate-governance. The Guidelines are intended to provide the Board with the necessary authority and practices to review and evaluate the Company's business operations as needed and to make decisions that are independent of the Company's management. The Guidelines are also intended to align the interests of Directors and management with those of the Company's stockholders. The Guidelines set forth the practices the Board intends to follow with respect to Board composition and selection, Board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and Board committees and compensation.

        The Guidelines specifically require, among other things, that:

•

A majority of our Directors must be independent.



•

The Board appoints all members of our Board committees.

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•

The Audit, Compensation and Nominating and Governance Committees are composed entirely of independent Directors.



•

The independent Directors meet in executive session at least twice a year.

        The Guidelines were adopted and are periodically reviewed by the Board for, among other things, compliance with legal and regulatory requirements, including applicable Nasdaq listing standards and rules, and evolving corporate governance best practices.

Independence of the Board

        The Board has affirmatively determined that none of our Directors or nominees for Director have a material or other disqualifying relationship with the Company and all of our Directors are independent Directors within the meaning of the applicable Nasdaq listing standards, except for Dr. Coles, our Chairman and Chief Executive Officer.

        During 2012, our independent Directors met a total of four times in regularly scheduled executive sessions at which only independent Directors were present. Our Audit Committee and Compensation Committee each met three times during 2012 in executive or closed sessions at which only independent Directors were present.

Board Leadership Structure

        In December 2012, the Board elected Dr. Coles Chairman of the Board. Dr. Goddard continues to serve as Lead Independent Director. During 2012, Board meetings were chaired by either Dr. Goddard as our Lead Independent Director, or at the request of Dr. Goddard, by Dr. Coles.

        The Board believes that combining the positions of Chairman and Chief Executive Officer helps provide a single, clear chain of command to execute the Company's strategic initiatives and business plans. The Company believes that having the Chief Executive Officer serve also as Chairman helps to ensure that the Board and management act with a common purpose, and that Dr. Coles serves as a bridge between management and the Board, facilitating the regular flow of information and providing the Board with valuable insight into the day-to-day operations of the Company.

        The Company has not adopted any policy regarding the chairperson's independence, and in the future, under appropriate circumstances, the Board would consider appointing an independent Director as chairperson of the Board. The Board believes that regardless of the chairperson's independence, it may be advantageous to have a Board chairperson who has history with and knowledge of the Company.

        The Board appointed Dr. Goddard as the Lead Independent Director in 2008 to reinforce the independence of the Board as a whole for purposes of calling and conducting meetings of the Board prior to the appointment of a Chairman. The Company believes that the Lead Independent Director helps ensure the effective independent functioning of the Board in its oversight responsibilities. The Lead Independent Director is empowered to, among other things, preside over Board meetings at which the Chairman is not present, including, if applicable, executive sessions of the independent Directors, approve information to be sent to the Board, if requested to do so by the Board, approve proposed meeting agendas and schedules, call meetings of the Board or the independent Directors, and serve as a liaison between the independent Directors and management.

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INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES

        During 2012 our Board held seven meetings. The Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The following table provides membership and meeting information for each of the Board committees during 2012:

        Each Board committee has authority to engage legal counsel and other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each Committee meets the applicable legal standards for "independence" and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment in his or her service as a member of our Board and the committees on which he or she serves.

Audit Committee

        The Audit Committee meets with our independent registered public accounting firm at least quarterly to review the financial results of the fiscal quarters and the annual audit and discuss the financial statements; determines and approves the engagement of the independent registered public accounting firm; determines whether to retain or terminate the existing independent registered public accounting firm or to appoint and engage a new independent registered public accounting firm; reviews and approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent registered public accounting firm on our audit engagement team as required by law; confers with management and the independent registered public accounting firm regarding the effectiveness of internal controls over financial reporting; establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; reviews the financial statements to be included in the Company's quarterly reports on Form 10-Q and Annual Report on Form 10-K; evaluates the independent registered public accounting firm's performance; receives and considers the independent registered public accounting firm's comments as to scope, adequacy and effectiveness of financial reporting controls; and reviews the results of management's efforts to monitor compliance with the Company's programs and policies designed to ensure adherence to applicable laws and rules related to accounting, financial reporting and auditing, and the Company's code of conduct, including reviewing and approving related-party transactions.

        The Audit Committee has adopted a written Audit Committee Charter that has been approved by the Board. Our Audit Committee Charter can be found on our website at http://www.onyx.com/investors/corporate-governance/board-committees.

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        The Board annually reviews the SEC rules and Nasdaq listing standards of independence for Audit Committee members and has determined that all members of our Audit Committee are independent under applicable SEC rules and Nasdaq listing standards. The Board has determined that Ms. Nevinny qualifies as an "audit committee financial expert," as defined in applicable SEC rules. The Board made a qualitative assessment of Ms. Nevinny's level of knowledge and experience based on a number of factors, including her formal education and experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements.

Compensation Committee

        The Compensation Committee reviews and approves the overall compensation strategy and policies for the Company. The Compensation Committee reviews and approves corporate performance goals and objectives relevant to the compensation of the Company's executive officers and other senior management; reviews and approves the compensation and other terms of employment of the Company's Chief Executive Officer and other senior management, including executive officers; and administers the Company's stock option and purchase plans. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Committee by the Chief Executive Officer. The Chief Executive Officer does not provide evaluations or recommendations with respect to his own performance or compensation. The Compensation Committee also reviews with management the Compensation Discussion and Analysis and determines whether it should be included in the Company's proxy statement. The specific determinations of the Compensation Committee with respect to executive compensation for fiscal year 2012 are described in the Compensation Discussion and Analysis section of this Proxy Statement.

        Our Compensation Committee Charter can be found on our corporate website at http://www.onyx.com/investors/corporate-governance/board-committees. All members of our Compensation Committee are independent under Nasdaq listing standards.

        Our Compensation Committee Charter requires the Committee to meet a minimum of two times per year. However, historically the Committee has met with greater frequency. Executive sessions are regularly held at the Compensation Committee meetings. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with management. From time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in Compensation Committee meetings. Our Chief Executive Officer may not participate in or be present during any deliberations or determinations of the Compensation Committee regarding his compensation. The Compensation Committee Charter grants the Compensation Committee full access to all books, records, facilities and personnel of the Company, as well as authority to obtain, at the expense of the Company, advice and assistance from internal and external legal, accounting and other advisors and consultants and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and Director compensation, including the authority to approve the consultant's reasonable fees and other retention terms.

        The Compensation Committee has engaged Radford, an AON Hewitt Consulting Company specializing in the technology and life sciences industries, to act as a compensation consultant to the Committee. At the direction of the Compensation Committee, Radford evaluates the efficacy of the Company's existing compensation strategy and practices in supporting and reinforcing the Company's long-term strategic goals, and assists in refining the Company's compensation strategy and in

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developing and implementing an executive compensation program to execute that strategy, including executive compensation, equity compensation and Board compensation.

        Radford has also been directed by the Compensation Committee to develop a comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. At the request of the Compensation Committee, Radford also works with certain members of our management to better assess the Company's business operations and strategy, key performance metrics and strategic goals, as well as the labor markets in which the Company competes for talent. The role of Radford with respect to the Committee's 2012 executive compensation decisions is discussed in the Compensation Discussion and Analysis section of this Proxy Statement.

Nominating and Governance Committee

        The Nominating and Governance Committee of the Board is responsible for identifying, reviewing and evaluating candidates to serve as our Directors (consistent with criteria approved by the Board), reviewing and evaluating incumbent Directors, recommending incumbent Directors to the Board for reelection to the Board, recommending to the Board for selection candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board and developing a set of corporate governance principles.

        The Nominating and Governance Committee also oversees and reviews the Company's guidelines and policies with respect to risk assessment and risk management, steps taken by management to monitor and control these exposures and our guidelines and policies with respect to compliance with applicable laws and rules (except as related to accounting, financial reporting and auditing, which is subject to oversight by the Audit Committee). The Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding matters other than accounting, internal accounting controls or auditing matters, and the confidential and anonymous submission by employees or third parties of concerns regarding questionable business practices. Our Nominating and Governance Committee charter can be found on our corporate website at http://www.onyx.com/investors/corporate-governance/board-committees. All members of the Nominating and Governance Committee are independent under Nasdaq listing standards.

        The Nominating and Governance Committee believes that candidates for Director should possess certain minimum qualifications, including the ability to read and understand basic financial statements, a high level of personal integrity and ethics, relevant expertise, ability to devote sufficient time to their board duties, the ability to exercise sound business judgment and a commitment to rigorously represent the long-term interests of our stockholders. The Nominating and Governance Committee periodically reviews these qualifications and may modify these qualifications from time to time. Candidates for Director nominees, including incumbent Directors and candidates for vacancies on the Board, are reviewed in the context of the current composition of the Board, the Company's strategic goals, operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Governance Committee considers diversity, age, skills and any other factors as it deems appropriate given the Company's current needs and the current needs of the Board, to maintain a balance of knowledge, experience and capability. While we do not have a formal diversity policy for selecting Board members, our Nominating and Governance Committee believes it is important that the members of our Board collectively bring the experiences and skills appropriate to effectively carry out the Board's responsibilities both as our business exists today and as we plan for the future. We broadly construe diversity to mean a variety of opinions, perspectives and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics, all in the context of the requirements and needs of our Board at that point in time. In the case of incumbent Directors whose terms of office are set to expire, the Nominating and Governance Committee also reviews overall service during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair Director independence.

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The Nominating and Governance Committee also determines whether the nominee meets applicable independence standards. The Nominating and Governance Committee conducts such inquiries as it deems appropriate or necessary into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Governance Committee discusses and considers qualifications and then selects a nominee for recommendation to the Board by majority vote.

        The Nominating and Governance Committee will consider Director candidates recommended by stockholders. The Nominating and Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, for a candidate recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Governance Committee to become nominees for election to the Board and for inclusion in our 2014 Proxy Statement may do so by delivering a written recommendation to the Nominating and Governance Committee at 249 E. Grand Avenue, South San Francisco, CA 94080 no later than December 10, 2013. Submissions must include the full name of the proposed nominee, a description of the proposed nominee's business experience for at least the previous five years, complete biographical information, a description of the proposed nominee's qualifications as a Director and a representation that the nominating stockholder is a beneficial or record owner of our stock. Any submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a Director if elected.

ROLE OF THE BOARD IN RISK OVERSIGHT

        One of the Board's key functions is informed oversight of the Company's various processes for managing risk. The Board administers this oversight function directly through the Board as a whole, as well as through the Board's standing committees that address risks associated with their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing risk exposure in the Company's strategic plans, development programs, corporate goals and operating plans, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee is responsible for considering and discussing our major exposures to financial risk and the steps our management takes to monitor and control these exposures, including guidelines, policies and processes. Beginning in 2012, our Nominating and Governance Committee assumed from the Audit Committee the oversight and review of our guidelines and policies with respect to risk assessment and risk management (except for major financial risk exposures, which remain subject to review and oversight by the Audit Committee) and the steps taken by management to monitor and control these exposures. In addition, the Nominating and Governance Committee monitors the effectiveness of our corporate governance guidelines and policies, as well as the Board's self-assessment of its own effectiveness. The Nominating and Governance Committee meets periodically with our Chief Compliance Officer and also monitors the Company's compliance with various legal and regulatory requirements. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. The Committees report their findings regarding risk management to the full Board when appropriate. In addition, the Board meets with certain members of our executive team, including the heads of our business, compliance and legal functions, who discuss the risks and exposures involved in their respective areas of responsibility as well as any developments that could impact our risk profile or other aspects of our business.

MEETINGS OF THE BOARD OF DIRECTORS

        The Board met seven times during the fiscal year ended December 31, 2012. All Directors attended at least 75 percent of the aggregate of the meetings of the Board and committees on which they served during 2012.

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STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

        We strive to ensure that the views of stockholders are heard by the Board, the independent Directors or individual Directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We review all communications from stockholders, but management may disregard any communication that it determines is not:

•

related to our business;



•

within the scope of the Board's responsibility;



•

credible; or



•

material or potentially material.

        If deemed an appropriate communication, a stockholder communication will be forwarded to the appropriate Director or Directors. Generally, our Chairman and Chief Executive Officer is responsible for communications with our stockholders, but a stockholder may direct communications to a particular Director or to the independent Directors generally, to the attention of Investor Relations, in care of: Onyx Pharmaceuticals, Inc., 249 E. Grand Avenue, South San Francisco, CA 94080.

CODE OF CONDUCT

        We have a Code of Conduct that applies to all officers, Directors, employees, consultants and agents. The Code of Conduct is available on our website at http://www.onyx.com/about-us/corporate-responsibility/code-of-conduct. If we make any substantive amendments to the Code of Conduct or grant any waiver from a provision of the Code of Conduct to any executive officer or Director, we will promptly disclose the nature of the amendment or waiver on our website.

COMPENSATION OF DIRECTORS

2012 Compensation of Directors

        In May 2012, on the recommendation of the Compensation Committee, and following a review of benchmark data for compensation paid to non-employee Directors of peer companies and recommendations by Radford, the Committee's compensation consultant, our Board approved changes to the cash compensation payable to non-employee Directors. The changes became effective July 1, 2012, and were retroactively applied from January 1, 2012. In connection with these changes, the annual cash retainer for service as a non-employee Director was increased from $30,000 to $55,000. However, meeting attendance fees for the first ten meetings of each of the Board, Audit Committee, Compensation Committee and Nominating and Governance Committee, previously set at $2,500 for the Board and $1,500 for the committees, were eliminated. After July 1, 2013, attendance fees of $1,500 per meeting would be payable only for meetings of each of the Board, Audit Committee, Compensation Committee and Nominating and Governance Committee in excess of ten, and $1,500 for all meetings of any additional committees of the Board. In addition, effective July 1, 2012 the annual retainer for the Chair of the Compensation Committee was increased from $15,000 to $18,000 and the annual retainer for the other members of the Compensation Committee was increased from $7,500 to $9,000. The additional annual retainer for service as the Lead Independent Director was unchanged and remained at $25,000. Similarly, the additional annual retainer paid to the chair of each of the Audit and Nominating and Governance Committees was unchanged at $24,000 and $10,000, respectively, and the additional annual retainer paid to each committee member (other than committee chairs) of the Audit and Nominating and Governance Committees was unchanged at $12,000, and $5,000, respectively.

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        For the year ended December 31, 2012, the aggregate amount of cash compensation paid to all of our non-employee Directors for their combined service in 2012 was $550,000. The members of the Board of Directors are also eligible for reimbursement for their expenses incurred in connection with attendance at Board meetings.

        The Equity Incentive Plan currently provides that each new member of our Board will be granted an option to purchase 20,000 shares of our common stock on the date of his or her initial election to the Board and that, on the last business day of March each year, each continuing non-employee Director receives an option to purchase 5,000 shares of common stock and a restricted stock award covering 3,000 shares of common stock, with such numbers of shares reduced pro rata if a non-employee Board member has served on the Board for less than one year. Following a review of peer group benchmark data provided by Radford, and upon recommendation of the Compensation Committee, the Board approved benchmark adjustment awards, effective July 25, 2012, to each non-employee Director, consisting of restricted stock units ("RSUs") covering 1,500 shares and an option to purchase 1,500 shares in addition to the non-discretionary grants made on March 30, 2012.

        During 2012, we granted our non-employee Directors options to purchase an aggregate of 49,000 shares of common stock at a weighted average exercise price per share of $48.85, restricted stock awards covering an aggregate 21,000 shares at a grant date market price per share of $37.68 and RSUs, covering an aggregate of 10,500 shares of common stock at a grant date market price per share of $76.79, all pursuant to the Equity Incentive Plan.

        The following table provides information regarding compensation of non-employee Directors who served during the year ended December 31, 2012:

Director Compensation

2013 Compensation of Directors

        In February 2013, on the recommendation of the Compensation Committee, and following a further review of benchmark data for cash compensation paid to non-employee directors of peer companies, targeting the 60^th percentile, and upon recommendation from the compensation consultant to the Compensation Committee, our Board approved additional changes to the cash and equity compensation payable to non-employee Directors. Effective January 1, 2013, the annual cash retainer for service as a non-employee Director was increased from $55,000 to $60,000. The additional annual

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retainer for service as the Lead Independent Director was unchanged and remained at $25,000. Also effective January 1, 2013, the annual retainer for the Chair of the Audit Committee was increased from $24,000 to $25,000, the annual retainer for the Chair of the Compensation Committee was increased from $18,000 to $20,000 and the annual retainer for the Chair of the Nominating and Governance Committee was increased from $10,000 to $15,000. Similarly, the additional annual retainers paid to each committee member (other than committee chairs) of the Audit, Compensation and Nominating and Governance Committees were increased to $12,500, $10,000 and $7,500, respectively. Meeting attendance fees were unchanged, and for 2013 remain at $1,500 per meeting, payable only for meetings of each of the Board, Audit Committee, Compensation Committee and Nominating and Governance Committee in excess of ten, and $1,500 for all meetings of any additional committees of the Board.

        For 2013, the Board suspended non-discretionary grants to non-employee Directors under the Equity Incentive Plan. As further described in Proposal 2, the Board is recommending that stockholders approve an amendment to the Equity Incentive Plan to, among other things, delete the provisions providing for non-discretionary equity awards to non-employee Directors, and going forward the Compensation Committee intends to exercise discretion to make annual equity awards to non-employee Directors. In February 2013, following a further review of benchmark data for equity compensation paid to non-employee directors of peer companies, targeting the 75^th percentile, and upon recommendation from the compensation consultant to the Compensation Committee of our Board, on the recommendation of the Compensation Committee, approved an equity award to non-employee Directors, to be granted March 28, 2013, with a total equity value of $350,000, comprised of a stock option and RSUs allocated based on a pre-determined split of $175,000 in value of options and RSUs, rounded to the nearest 100 shares. The number of shares subject to these awards was computed on the grant date, based on the average closing price of one share of our common stock over the 30 days prior to grant, using a pre-determined Black-Scholes multiplier, and resulted in an award to each Director on March 28, 2013 of an option to purchase 5,900 shares, at the closing price of our common stock on the grant date, and RSUs covering 2,100 shares of common stock. These options and RSUs both vest on the one year anniversary of the date of grant.

        Even if our stockholders do not approve the amendment to the Equity Incentive Plan to, among other things, delete the provision providing for non-discretionary equity awards to non-employee Directors under Proposal 2 of this Proxy Statement, for any future non-employee Directors appointed to the Board, the Board intends to suspend the application of the non-discretionary grant provided for under the Equity Incentive Plan. Instead, the Board intends to make an initial equity award to the new appointee with a total equity value of $400,000, comprised of a stock option and RSUs allocated based on a pre-determined split with the number of shares subject to these awards computed on the grant date, based on the average closing price of one share of the Company's common stock over the 30 days prior to grant, using a pre-determined Black-Scholes multiplier, with such options vesting 25% on the one year anniversary of grant and then 1/48^th per month thereafter, and such RSUs vesting annually over four years.

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PROPOSAL 2: APPROVAL OF AMENDMENTS TO THE EQUITY INCENTIVE PLAN

        The Board is requesting stockholder approval of the Company's Equity Incentive Plan, as amended, to effect the following principal changes:

•

Add an additional 3,800,000 shares to the number of shares of our common stock authorized for issuance under the Equity Incentive Plan;



•

Increase the aggregate maximum number of shares of our common stock that may be issued pursuant to the exercise of incentive stock options to 23,060,045 shares;



•

Amend the menu of performance-based compensation criteria to be used under the Equity Incentive Plan as required by Section 162(m) of the U.S. Internal Revenue Code (the "Code") by providing examples of the types of projects or processes that might be considered under criteria (xxvii) of the Equity Incentive Plan and by clarifying that criteria (xxxi), "other measures selected by the Board," will not be used as a goal for any compensation that is intended to qualify as performance-based under Section 162(m);



•

Provide that future performance cash awards will be granted under the Company's new Cash Incentive Plan, if the Cash Incentive Plan is approved by our stockholders under Proposal 3 of this Proxy Statement;



•

Terminate provisions relating to Director non-discretionary grants; and



•

Extend the term of the Equity Incentive Plan by an additional five years.

        In February 2013, the Board amended the Equity Incentive Plan, subject to stockholder approval, to reflect these provisions.

Effect of Proposal 3 of this Proxy Statement relating to our proposed Cash Incentive Plan

        In Proposal 3 we are asking our stockholders to approve the Company's new Cash Incentive Plan, as amended, so that cash bonus awards under the Cash Incentive Plan may be eligible to qualify as performance-based compensation under Section 162(m) of the Code, as described in detail in Proposal 3 to this Proxy Statement. As amended, the Equity Incentive Plan provides that if the Cash Incentive Plan is so approved, no further cash bonus awards will be granted under the Equity Incentive Plan following our 2013 Annual Meeting. If Proposal 3 is not approved, cash bonus awards may continue to be granted under the Equity Incentive Plan, although if this Proposal 2 is not approved, such cash bonus awards would not qualify as performance-based compensation for purposes of Section 162(m) of the Code.

        If this Proposal 2 is approved by our stockholders, the Equity Incentive Plan will continue to be effective after the 2013 Annual Meeting. In the event that our stockholders do not approve the amendments to the Equity Incentive Plan set forth in this Proposal 2, the Equity Incentive Plan will continue in its current form.

Why You Should Vote for the Equity Incentive Plan

Equity Incentive Awards Are an Important Part of Our Compensation Philosophy

        The Equity Incentive Plan is critical to our ongoing effort to build stockholder value. As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, equity incentive awards are central to our compensation program. Equity compensation represents the largest at-risk component of our executive officers' compensation arrangements. We believe that it is appropriate to align the interests of our executive officers with those of our stockholders to achieve and sustain long-term stock price growth.

        Our equity incentive program is broad-based and equity incentive awards are also an important component of our non-executive employees' compensation.

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        Our Compensation Committee and Board believe we must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees necessary for our continued growth and success. As described further below, the Board has approved an amendment, subject to stockholder approval, to increase the share reserve of our Equity Incentive Plan to ensure that we have a sufficient number of shares to continue to utilize a broad array of equity incentives in order to secure and retain the services of our and our affiliates' employees, consultants and directors, and to provide incentives for such persons to exert maximum efforts toward our success.

We Manage Our Equity Incentive Award Use Carefully and Dilution Is Reasonable

        We manage our long-term stockholder dilution by limiting the number of equity incentive awards granted annually. The Compensation Committee carefully monitors our annual net burn rate, total dilution, and equity expense in order to maximize stockholder value by granting only the appropriate number of equity incentive awards that it believes are necessary to attract, reward, and retain employees. Our commitment to a carefully managed equity incentive program is demonstrated by the following facts:

•

As of March 26, 2013, and including the additional 3,800,000 shares of common stock requested in this Proposal 2, our full dilution (as defined below) satisfied the Institutional Shareholder Services, or ISS 11% cap test.



•

Our historical three-year average burn rate, as calculated by the ISS, is 4.25%, which is well below the 6.7% cap that ISS applies to companies in our Global Industry Classification Standard, or GICS industry group (Pharmaceuticals, Biotechnology & Life Sciences).



•

We have managed our equity incentive award usage prudently while adding important capabilities to the Company. Between December 31, 2009 and December 31, 2012, we have added approximately 470 employees, a compounded annual growth rate of approximately 40%, without exceeding the available equity compensation pool.



•

Our compensation philosophy reflects broad-based eligibility for equity incentive awards, and we grant awards to substantially all of our employees. By doing so, we link employee interests with stockholder interests throughout the organization and motivate our employees to act as owners of the business.

        The following table shows our historical dilution and burn rate percentages.

The Size of Our Share Reserve Increase Request Is Reasonable

        If our request to increase the share reserve of the Equity Incentive Plan by an additional 3,800,000 shares is approved by stockholders, we will have approximately 6,908,949 shares available for grant after the Annual Meeting, which is based on 3,108,949 shares available for grant under the Equity Incentive Plan at March 31, 2013 and the 3,800,000 shares subject to this proposal. Our Compensation Committee determined the size of the requested share increase based on projected equity awards to anticipated new hires, projected annual equity awards to existing employees, and an assessment of the

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magnitude of increase that our institutional investors and the firms that advise them would likely find acceptable. We anticipate that if our request to increase the share reserve is approved by stockholders, it will be sufficient to provide equity incentives to attract, retain, and motivate employees through the next eighteen to twenty-four months.

        We ask that you consider the following as context for the recommended increase in the share reserve:

•

Our equity incentive award program is designed to align the interests of our employees with those of our stockholders to achieve and sustain stock price growth. We believe our strategy is working. Our one-year total shareholder return, or TSR, as of December 31, 2012 was approximately 72% as compared to the 18.36% median TSR of companies in our GICS industry group (Pharmaceuticals, Biotechnology & Life Sciences).



•

During 2012, our Board granted restricted share units that vest solely upon the attainment of specific performance objectives to all our officers at the vice president level and above. These grants are in line with our philosophy to link pay to corporate performance and long-term stockholder value creation and to align the interests of participants in the Equity Incentive Plan with the interests of our stockholders.



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Our stockholders have the opportunity to judge our executive compensation practices again this year through our annual advisory vote on executive compensation (Proposal 5). Last year, our advisory vote on executive compensation was approved by approximately 96% of the votes cast for the proposal.



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As of March 31, 2013, 3,108,949 shares of common stock remained available for future equity awards under the Equity Incentive Plan. Based on our current equity grant practices and anticipated hiring of new employees, we expect to exhaust the existing share reserve under the Equity Incentive Plan within 12 months. If stockholders do not approve this Proposal 2, we may be unable to attract and retain qualified employees.

The Equity Incentive Plan Combines Compensation and Governance Best Practices

        The Equity Incentive Plan includes provisions that are designed to protect our stockholders' interests and to reflect corporate governance best practices including:

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Prohibitions on repricing and buyouts of options and stock appreciation rights. The Equity Incentive Plan prohibits the repricing and buyouts of stock options and stock appreciation rights without prior stockholder approval.



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Stockholder approval is required in order to increase the share reserve. The Equity Incentive Plan does not contain an annual "evergreen" provision. The Equity Incentive Plan authorizes a fixed number of shares, so that stockholder approval is required to issue any additional shares.



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Reasonable share counting provisions. In general, when awards granted under the Equity Incentive Plan lapse or are canceled, the shares reserved for those awards will be returned to the share reserve and be available for future awards. However, shares of common stock received from the exercise of stock options or withheld for taxes will not be returned to our share reserve.



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Greater reduction for full value awards. The Equity Incentive Plan limits the number of shares of common stock available for outright stock grants or other full value share awards payable in the form of common stock that require no purchase by the participant by providing that each share issued pursuant to one of these types of awards reduces the number of shares available for grant by up to 2.0 shares.

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No liberal change in control provisions. The definition of change in control in our Equity Incentive Plan requires the consummation of an actual transaction and vesting acceleration would generally only occur if the existing outstanding awards were not assumed.



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No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights must have an exercise price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted.



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Independent Directors. Our Compensation Committee consists entirely of independent Directors, and our Board consists of seven independent Directors and our Chairman and Chief Executive Officer.

Summary of the Equity Incentive Plan

        The following is a summary of the material terms and provisions of the Equity Incentive Plan. This summary, however, does not purport to be a complete description of the Equity Incentive Plan. The Equity Incentive Plan, as proposed to be amended, has been included as an attachment to this Proxy Statement at Annex A. The following summary is qualified in its entirety by reference to the complete text of the Equity Incentive Plan, as proposed to be amended.

General

        The Equity Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, stock purchase awards, stock bonus awards, stock unit awards, performance stock awards and other forms of equity compensation (collectively, "stock awards"). The Equity Incentive Plan also provides the ability to grant performance stock awards and performance cash awards (together, "performance awards") that may qualify as performance-based compensation for purposes of Section 162(m) of the Code. Section 162(m) of the Code disallows a deduction to any publicly held corporation and its affiliates for certain compensation paid to "covered employees" in a taxable year to the extent that compensation to a covered employee exceeds $1 million. However, some kinds of compensation, including qualified "performance-based compensation," are not subject to this deduction limitation. While we believe it is in the best interests of the Company and our stockholders to preserve the ability to grant "performance-based compensation" under Section 162(m) of the Code, we may determine to grant compensation to covered employees that will not qualify as "performance-based compensation" for purposes of Section 162(m) of the Code. Moreover, even if we intend to grant compensation that qualifies as "performance-based compensation" for purposes of Section 162(m) of the Code, we cannot guarantee that such compensation ultimately will be deductible by us. For the grant of awards under a plan to qualify as "performance-based compensation" under Section 162(m) of the Code, among other things, the plan must (i) describe the employees eligible to receive such awards, (ii) provide a per-person limit on the number of shares subject to stock options and performance stock awards, and the amount of cash that may be subject to performance cash awards, granted to any employee under the plan in any year, and (iii) include one or more pre-established business criteria upon which the performance goals for performance awards may be granted (or become vested or exercisable). These terms must be approved by the stockholders and, accordingly, our stockholders are requested to approve the amendments to the Equity Incentive Plan, which includes terms regarding eligibility for awards, per-person limits on awards and the business criteria for performance awards granted under the Equity Incentive Plan (as described in the summary below).

        Incentive stock options granted under the Equity Incentive Plan are intended to qualify as "incentive stock options" within the meaning of Section 422 of the Code. Nonstatutory stock options granted under the Equity Incentive Plan are not intended to qualify as incentive stock options under

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the Code. See the "Federal Income Tax Information" section of this Proposal 2 below for a discussion of the tax treatment of stock awards.

Purpose

        Our Board adopted the Equity Incentive Plan to provide a means to secure and retain the services of our and our affiliates' employees, directors, and consultants, to provide a means by which these eligible individuals may be given an opportunity to benefit from increases in the value of our common stock through the grant of stock awards, and thereby align the long-term compensation and interests of those individuals with our stockholders.

Administration

        Our Board administers the Equity Incentive Plan. Subject to the provisions of the Equity Incentive Plan, the Board has the authority to construe and interpret the Equity Incentive Plan, to determine the persons to whom and the dates on which awards will be granted, the number of shares of common stock to be subject to each stock award, the time or times during the term of each stock award within which all or a portion of the award may be exercised, the exercise, purchase, or strike price of each stock award, the type of consideration permitted to exercise or purchase each stock award, and other terms of the awards.

        Our Board has the authority to delegate some or all of the administration of the Equity Incentive Plan to a committee or committees composed of one or more members of the Board. In the discretion of the Board, a committee may consist solely of two or more "non-employee directors" within the meaning of Rule 16b-3 of the Exchange Act or solely of two or more "outside directors" within the meaning of Section 162(m) of the Code. For this purpose, a "non-employee director" generally is a director who does not receive remuneration from us other than compensation for service as a director (except for amounts not in excess of specified limits applicable pursuant to Rule 16b-3 under the Exchange Act). An "outside director" generally is a director who is neither our current or former officer nor our current employee, does not receive any remuneration from us other than compensation for service as a director, and is not employed by and does not have ownership interests in an entity that receives remuneration from us (except within specified limits applicable under regulations issued pursuant to Section 162(m) of the Code). If administration is delegated to a committee, the committee has the authority to delegate certain administrative powers to a subcommittee of one or more members. The Board may also delegate certain limited granting powers to one or more of our officers. As used herein with respect to the Equity Incentive Plan, the "Board" refers to any committee the Board appoints or, if applicable, any subcommittee, as well as to the Board itself. In accordance with the provisions of the Equity Incentive Plan, the Board has delegated administration of the Equity Incentive Plan to the Compensation Committee.

        All determinations, interpretations and constructions made by the Board in good faith shall be final, binding and conclusive on all persons.

Repricing; Cancellation and Re-Grant of or Payments for Stock Awards

        Under the Equity Incentive Plan, the Board does not have the authority to reprice any outstanding stock awards, cancel and re-grant any outstanding stock awards, or cancel any underwater options or stock appreciation rights in exchange for cash or other stock awards without obtaining the approval of our stockholders within 12 months prior to the date on which any of these actions may be taken.

Eligibility

        As of March 5, 2013, all eight of our executive officers, all seven of our non-employee Directors and all of our 793 regular employees were eligible to participate in the Equity Incentive Plan. Incentive

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stock options may be granted under the Equity Incentive Plan only to our and our affiliates' employees (including officers). Our and our affiliates' employees (including officers), non-employee directors and consultants are eligible to receive all other types of stock awards and performance awards (including performance cash awards) under the Equity Incentive Plan.

        No incentive stock option may be granted under the Equity Incentive Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of our total combined voting power, unless the exercise price of such option is at least 110% of the fair market value of the stock subject to the option on the date of grant and the term of the option does not exceed five years from the date of grant. In addition, the aggregate fair market value, determined on the date of grant, of the shares of common stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under the Equity Incentive Plan and any of our other equity plans) may not exceed $100,000. If this proposal is approved, the maximum numbers of shares that may be issued upon the exercise of incentive stock options may not exceed 23,060,045 shares.

        No employee may be granted options and/or stock appreciation rights under the Equity Incentive Plan covering more than 1,000,000 shares of common stock during any calendar year. This limitation assures that any deductions to which we would otherwise be entitled either upon the exercise of stock options or stock appreciation rights granted under the Equity Incentive Plan, or upon the subsequent sale of the shares acquired under those awards, will not be subject to the $1,000,000 limitation on the income tax deductibility of compensation paid per covered executive officer imposed under Section 162(m) of the Code.

        In general, at least 90% of the total number of shares of common stock subject to the Equity Incentive Plan must be issued pursuant to (a) the exercise of options or stock appreciation rights that vest at a rate no more favorable to participants than over one year of service, (b) stock purchase awards, stock bonus awards, stock unit awards or other stock awards that vest at a rate no more favorable to participants than over three years of service, or (c) performance stock awards that require one year of service. As further discussed below for each stock award, exceptions to this minimum vesting requirement apply in the event of death, disability, retirement, certain corporate transactions, or a change in control.

Stock Subject to the Equity Incentive Plan

        If this Proposal is approved, the maximum number of shares of common stock that may be issued under the Equity Incentive Plan since adoption of the Plan in 2005 will be 23,060,045. This consists of (a) 19,260,045 shares previously reserved for issuance under the Equity Incentive Plan, plus (b) an additional 3,800,000 shares reserved for issuance as a result of stockholder approval of this Proposal 2. The number of shares of common stock reserved for issuance under the Equity Incentive Plan will be reduced by (1) one share for each share of common stock issued pursuant to an option or stock appreciation right with respect to which the stock price is at least 100% of the fair market value of the stock on the date of grant, (2) 1.3 shares for each share of common stock issued pursuant to a stock purchase award, stock bonus award, stock unit award or other stock award, for awards granted prior to the 2009 Annual Meeting, (3) 1.6 shares for each share of common stock issued pursuant to a stock purchase award, stock bonus award, stock unit award or other stock award for awards granted on or after the date of the 2009 Annual Meeting and prior to the date of the 2013 Annual Meeting, and (4) 2.0 shares for each share of common stock issued pursuant to a stock purchase award, stock bonus award, stock unit award or other stock award, for awards granted after the 2013 Annual Meeting.

        As of March 31, 2013, 3,108,949 shares of common stock remained available for future equity awards under the Equity Incentive Plan. In addition to the number of shares available for future issuance, as of March 31, 2013, there were (a) 6,535,095 shares of common stock subject to outstanding

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options, and (b) 787,269 shares of common stock related to awarded but unvested time-based and performance-based RSUs under the Equity Incentive Plan. Based on our current equity grant practices and anticipated hiring of new employees, we expect to exhaust the existing share reserve under the Equity Incentive Plan within 12 months. If stockholders do not approve this Proposal 2, we may be unable to attract and retain qualified employees.

        If stock awards granted under the Equity Incentive Plan expire or otherwise terminate without being exercised in full, are forfeited or repurchased for failure to vest, or are settled in cash, the shares of common stock not acquired or forfeited or repurchased pursuant to such awards again become available for subsequent issuance under the Equity Incentive Plan. To the extent there is issued a share of common stock pursuant to a stock award that counted as more than one share against the number of shares available for issuance under the Equity Incentive Plan and such share of common stock again becomes available for issuance under the Equity Incentive Plan as described in the preceding sentence, then the number of shares of common stock available for issuance under the Equity Incentive Plan will increase by 1.3, 1.6 or 2.0 shares, as applicable.

        If any shares subject to a stock award granted under the Equity Incentive Plan are not delivered to a participant because (a) the stock award is exercised through a reduction in the number of shares subject to the stock award, (b) the appreciation distribution upon exercise of a stock appreciation right is paid in shares of common stock, or (c) shares are withheld in satisfaction of applicable withholding taxes, the number of shares not delivered will not remain available for subsequent issuance under the Equity Incentive Plan. Finally, if the exercise price of a stock award is satisfied by tendering shares of common stock held by a participant, the number of shares so tendered will not remain available for subsequent issuance under the Equity Incentive Plan.

Terms of Options

        Options may be granted under the Equity Incentive Plan pursuant to stock option agreements adopted by our Board. The following is a description of the permissible terms of options under the Equity Incentive Plan. Individual stock option agreements may be more restrictive as to any or all of the permissible terms described below.

        Exercise Price.    The exercise price of incentive stock options may not be less than 100% of the fair market value of the stock subject to the option on the date of grant and, in some cases (see "Eligibility" above), may not be less than 110% of such fair market value. The exercise price of nonstatutory stock options may not be less than 100% of the fair market value of the stock subject to the option on the date of grant. As of March 28, 2013, the closing price of our common stock as reported on Nasdaq was $88.86 per share.

        Consideration.    The exercise price of options granted under the Equity Incentive Plan may, at the discretion of the Board, be paid in any combination of the following methods (a) in cash or check, (b) pursuant to a broker-assisted cashless exercise, (c) by delivery of other shares of our common stock, (d) pursuant to a net exercise arrangement (for nonstatutory stock options only), or (e) in any other form of legal consideration acceptable to the Board.

        Vesting.    Options granted under the Equity Incentive Plan may become exercisable in cumulative increments, or "vest," as determined by the Board. Vesting typically will occur during the optionholder's continued service with us or our affiliates, whether this service is performed in the capacity of an employee, director, or consultant (collectively, "service") and regardless of any change in the capacity of the service performed. Shares covered by different options granted under the Equity Incentive Plan may be subject to different vesting terms. However, options granted under the Equity Incentive Plan generally may not vest at a rate more favorable to the optionholder than over a one year period measured from the date of grant (or the date of hire for newly-hired participants), except

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in the event of death, disability, retirement, certain corporate transactions, or a change in control. Subject to the foregoing limitations, the Board has the authority to accelerate the time during which an option may vest or be exercised.

        Term.    The maximum term of options granted under the Equity Incentive Plan is ten years, except that in certain cases (see "Eligibility" above) the maximum term is five years.

        Termination of Service.    Options under the Equity Incentive Plan generally terminate three (3) months after termination of a participant's service unless (a) termination is due to the participant's disability, in which case the option may be exercised (to the extent the option was exercisable at the time of the termination of service) at any time within twelve months after termination, (b) the participant dies before the participant's service has terminated, or within three months after termination of service, in which case the option may be exercised (to the extent the option was exercisable at the time of the participant's death) within eighteen months after the participant's death by the person or persons to whom the rights to such option have passed, or (c) the option by its terms specifically provides otherwise. The option term may be extended in the event that exercise of the option following termination of service is prohibited by applicable securities laws. In no event, however, may an option be exercised beyond the expiration of its term.

        Restrictions on Transfer.    A participant in the Equity Incentive Plan may not transfer an option other than by will, by the laws of descent and distribution, or pursuant to a domestic relations order, official marital settlement agreement or other divorce or separation instrument permitted under applicable law. During the lifetime of the participant, only the participant may exercise an incentive stock option. However, the Board may grant nonstatutory stock options that are transferable in certain limited instances. We may also allow a participant to designate a beneficiary who may exercise an option following the participant's death.

Terms of Stock Appreciation Rights

        Stock appreciation rights may be granted under the Equity Incentive Plan pursuant to stock appreciation rights agreements adopted by our Board. To date, no stock appreciation rights have been granted under the Equity Incentive Plan.

        Exercise.    Each stock appreciation right is denominated in shares of common stock equivalents. Upon exercise of a stock appreciation right, we will pay the participant an amount equal to the excess of (a) the aggregate fair market value on the date of exercise of a number of common stock equivalents with respect to which the participant is exercising the stock appreciation right, over (b) the strike price determined by the Board on the date of grant. The appreciation distribution upon exercise of a stock appreciation right may be paid in cash, shares of our common stock, a combination of cash and stock, or any other form of consideration determined by the Board.

        Strike Price.    The strike price of stock appreciation rights granted as a stand-alone or tandem stock award may not be less than 100% of the fair market value of the common stock equivalents subject to the stock appreciation rights on the date of grant.

        Vesting.    Stock appreciation rights vest and become exercisable at the rate specified in the stock appreciation right agreement as determined by the Board. However, stock appreciation rights granted under the Equity Incentive Plan generally may not vest at a rate more favorable to the participant than over a one year period measured from the date of grant (or the date of hire for newly-hired participants), except in the event of death, disability, retirement, certain corporate transactions, or a change in control. Subject to the foregoing limitations, the Board has the authority to accelerate the time during which a stock appreciation right may be exercised.

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        Term.    The maximum term of stock appreciation rights granted under the Equity Incentive Plan is 10 years.

        Termination of Service.    Upon termination of a participant's service, the participant generally may exercise any vested stock appreciation right for three months (or such longer or shorter period specified in the stock appreciation right agreement) after the date such service relationship ends. In no event may a stock appreciation right be exercised beyond the expiration of its term.

Terms of Stock Purchase Awards and Stock Bonus Awards

        Stock purchase awards and stock bonus awards may be granted under the Equity Incentive Plan pursuant to stock purchase award agreements and stock bonus award agreements, respectively, adopted by our Board.

        Purchase Price.    If required by law, the purchase price for stock purchase awards must be at least the par value of our common stock.

        Consideration.    The purchase price for stock purchase awards may be payable in (a) cash or check, (b) past or future services rendered to us or an affiliate, or (c) any other form of legal consideration acceptable to the Board. The Board may grant stock bonus awards in consideration for (a) past or future services rendered to us or an affiliate, or (b) any other form of legal consideration acceptable to the Board.

        Vesting.    Shares of stock acquired under a stock purchase or stock bonus award may be subject to a repurchase option in our favor or forfeiture to us in accordance with a vesting schedule as determined by the Board. However, stock purchase awards and stock bonus awards granted under the Equity Incentive Plan generally may not vest at a rate more favorable to the participant than over a three-year period measured from the date of grant, except in the event of death, disability, retirement, certain corporate transactions, or a change in control. Subject to the foregoing limitations, the Board has the authority to accelerate the vesting of stock acquired pursuant to a stock purchase or stock bonus award.

        Termination of Service.    Upon termination of a participant's service, we may repurchase or otherwise reacquire any forfeited shares of stock that have not vested as of such termination under the terms of the applicable stock purchase award or stock bonus award agreement.

        Restrictions on Transfer.    Rights to acquire shares under a stock purchase or stock bonus award may be transferred only upon such terms and conditions as determined by the Board.

Terms of Stock Unit Awards

        Stock unit awards may be granted under the Equity Incentive Plan pursuant to stock unit award agreements adopted by our Board.

        Consideration.    The purchase price (if any) for stock unit awards may be paid in any form of legal consideration acceptable to the Board.

        Settlement of Awards.    A stock unit award may be settled by the delivery of shares of our common stock, cash, a combination of stock and cash, or in any other form of consideration determined by the Board. At the time of grant, the Board may impose additional restrictions or conditions that delay the delivery of stock (or cash equivalent) subject to the stock unit award after vesting.

        Vesting.    Stock unit awards vest at the rate specified in the stock unit award agreement as determined by the Board. However, stock unit awards granted under the Equity Incentive Plan generally may not vest at a rate more favorable to the participant than over a three-year period

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measured from the date of grant, except in the event of death, disability, retirement, certain corporate transactions, or a change in control. Subject to the foregoing limitations, the Board has the authority to accelerate the vesting of a stock unit award.

        Dividend Equivalents.    Dividend equivalent rights may be credited with respect to shares covered by a stock unit award.

        Termination of Service.    Except as otherwise provided in the applicable award agreement, stock units that have not vested will be forfeited upon the participant's termination of service.

Terms of Performance Awards

        General.    As described above, the Equity Incentive Plan is designed to allow the Board to issue performance stock awards and performance cash awards that may qualify as performance-based compensation that is not subject to the $1,000,000 income tax deductibility limitations imposed by Section 162(m) of the Code, if certain conditions, as described above, are met.

        Performance Goals.    To permit us to grant compensation attributable to performance stock awards or performance cash awards that may qualify as performance-based compensation under Section 162(m) of the Code, the Compensation Committee may structure these awards so that they are only granted, vest or become exercisable upon the achievement of certain pre-established performance goals. However, performance stock awards granted under the Equity Incentive Plan generally require the completion of one year of service measured from the beginning of a performance period, except in the event of death, disability, retirement, certain corporate transactions, or a change in control. As amended, performance goals under the Equity Incentive Plan may be based on any one of, or a combination of, the following performance criteria: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv) net earnings; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross margin; (ix) operating income; (x) net income (before or after taxes); (xi) net operating income; (xii) net operating income after tax; (xiii) pre- and after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue targets; (xvii) increases in revenue or product revenue; (xvii) expenses and cost reduction goals; (xix) improvement in or attainment of expense levels; (xx) improvement in or attainment of working capital levels; (xxi) economic value added; (xxii) market share; (xxiii) cash flow; (xxiv) cash flow per share; (xxv) share price performance; (xxvi) debt reduction; (xxvii) implementation or completion of projects or processes (including, without limitation, clinical trial initiation, clinical trial enrollment, clinical trial results, new and supplemental indications for existing products, regulatory filing submissions, regulatory filing acceptances, regulatory or advisory committee interactions, regulatory approvals, and product supply); (xxviii) customer satisfaction; (xxix) total stockholder return; (xxx) stockholders' equity; and (xxxi) other measures selected by the Board, provided, however, that any performance stock awards and performance cash awards based on other measures selected by the Board under clause (xxxi) will not, and are not intended to, qualify as performance-based compensation under Section 162(m) of the Code.

        The only amendments proposed to the performance criteria, which are included in the criteria set forth above are (1) the inclusion of examples of the types of projects or processes that might be considered as performance criteria under clause (xxvii) of the definition of performance criteria; and (2) the clarification that criteria set forth in clause (xxxi) of the definition of performance criteria will not be used as a goal for any compensation that is intended to qualify as performance-based compensation under Section 162(m) of the Code.

        Performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or a relevant index. Adjustments in the method of

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calculating the attainment of performance goals may be made as follows: (a) to exclude restructuring and/or other nonrecurring charges, (b) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings, (c) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board, (d) to exclude the effects of any statutory adjustments to corporate tax rates, and (e) to exclude the effects of any "extraordinary items" as determined under generally accepted accounting principles.

        Annual Limitation.    The maximum benefit to be received by a participant in any calendar year attributable to performance stock awards may not exceed 1,000,000 shares of common stock. The maximum benefit to be received by a participant in any calendar year attributable to performance cash awards may not exceed $2,000,000.

Terms of Other Stock Awards

        General.    The Board may grant other stock awards based in whole or in part by reference to the value of our common stock. Subject to the provisions of the Equity Incentive Plan, the Board has the authority to determine the persons to whom and the dates on which such other stock awards will be granted, the number of shares of our common stock (or cash equivalents) to be subject to each award, and other terms and conditions of such awards. Such awards may be granted either alone or in addition to other stock awards granted under the Equity Incentive Plan.

        Vesting.    Other stock awards granted under the Equity Incentive Plan generally may not vest at a rate more favorable to the participant than over a three year period measured from the date of grant, except in the event of death, disability, retirement, certain corporate transactions, or a change in control. Subject to the foregoing limitations, the Board has the authority to accelerate the vesting of such stock awards.

Termination of Non-Discretionary Grant Program

        Currently, the non-discretionary grant program under the Equity Incentive Plan provides for the automatic grant of stock options and stock bonuses to non-employee directors over their period of service on the Board.

        Under the proposed amendments to the Equity Incentive Plan, this non-discretionary grant program will be terminated. For 2013, the Board suspended non-discretionary grants to non-employee Directors under the Equity Incentive Plan, and going forward the Compensation Committee intends to exercise its discretion to make annual equity awards to non-employee Directors rather than provide for automatic grants to non-employee Directors. Under the proposed amendments to the Equity Incentive Plan, the Compensation Committee will not be authorized to grant any non-employee Director equity awards covering more than 75,000 shares of our common stock in any calendar year. See "Compensation of Directors—2013 Director Compensation" above for additional information regarding the Board's new Director discretionary grant practices.

Changes to Capital Structure

        In the event any change is made to the outstanding shares of our common stock without our receipt of consideration (whether through a merger, consolidation, recapitalization, stock split or other specified change in our capital structure), appropriate adjustments will be made to (a) the maximum number or class of securities issuable under the Equity Incentive Plan, (b) the maximum number or class of securities that may be issued under the Equity Incentive Plan pursuant to the exercise of incentive stock options, (c) the maximum number or class of securities for which any one person may be granted stock awards per calendar year, and (d) the number or class of securities and the price per share in effect under each outstanding stock award under the Equity Incentive Plan.

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Corporate Transactions; Changes in Control

        The following provisions will apply to stock awards granted under the Equity Incentive Plan, unless otherwise provided in a written agreement between the participant and us or an affiliate. In the event of certain corporate transactions (as defined in the Equity Incentive Plan and described below), all outstanding stock awards under the Equity Incentive Plan may be assumed, continued or substituted by any surviving or acquiring entity (or its parent company), and any reacquisition or repurchase rights held by us in respect of common stock issued pursuant to such stock awards may be assigned to our successor (or its parent company, if any) in connection with such transaction. If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute such stock awards, then (a) with respect to any such stock awards that are held by individuals then performing services for us or our affiliates, the vesting and exercisability provisions (and the lapsing of any reacquisition or repurchase rights) of such stock awards will be accelerated in full to a date prior to the effective date of the corporate transaction, and such awards will be terminated if not exercised (if applicable) at or prior to the effective date of the corporate transaction, and (b) all other outstanding stock awards will be terminated if not exercised prior to the effective date of the corporate transaction (except that any reacquisition or repurchase rights will not terminate and may continue to be exercised notwithstanding such transaction).

        The Board may also provide that the holder of an outstanding stock award not assumed in the corporate transaction will surrender such stock award in exchange for a payment equal to the excess of (a) the value of the property that the holder would have received upon exercise of the stock award, over (b) the exercise price otherwise payable in connection with the stock award.

        A corporate transaction generally will be deemed to occur in the event of (a) a sale of all or substantially all of our and our subsidiaries' consolidated assets, (b) a sale of at least 90% of our outstanding securities, (c) a merger or consolidation in which we are not the surviving corporation, or (d) a merger or consolidation in which we are the surviving corporation, but shares of our outstanding common stock are converted into other property by virtue of the corporate transaction.

        The Board has the discretion to provide that a stock award under the Equity Incentive Plan will vest as to all or any portion of the shares subject to the stock award (a) immediately upon the occurrence of certain specified change in control transactions, whether or not such stock award is assumed, continued, or substituted by a surviving or acquiring entity in the transaction, or (b) as provided in certain award agreements, in the event a participant's service with us or a successor entity is terminated, actually or constructively, within a designated period following the occurrence of certain specified change in control transactions. Stock awards held by participants under the Equity Incentive Plan will not vest on such an accelerated basis unless specifically provided by the participant's applicable award agreement.

        The definition of change in control is defined in the Equity Incentive Plan, but generally will be deemed to occur if any one or more of the following events occur, whether in a single transaction or a series of related transactions, (a) a person, entity or group (subject to certain exceptions as defined in the Equity Incentive Plan) becomes the beneficial owner of more than 50% of the combined voting power of the Company's then outstanding securities (other than by virtue of a merger, consolidation or similar transaction), (b) the consummation of a merger, consolidation or similar transaction, in which the stockholders of the Company immediately prior to such transaction do not own more than 50% of the combined outstanding voting power of the surviving entity or its parent, (c) stockholders of the Company or the Board approve a plan of complete dissolution or liquidation of the Company, (d) subject to certain exceptions as set forth in the Equity Incentive Plan, the consummation of a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, or (e) a majority of the Board becomes comprised of individuals whose nomination, appointment or election was not approved by a majority of the Board members or their

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approved successors. If required for compliance with Section 409A of the Code, in no event will a change in control be deemed to have occurred if such transaction is not also a "change in the ownership or effective control of" the Company or "a change in the ownership of a substantial portion of the assets of" the Company as determined under Treasury Regulation Section 1.409A-3(i)(5).

        The acceleration of a stock award in the event of an acquisition or similar corporate event may be viewed as an anti-takeover provision, which may have the effect of discouraging a proposal to acquire or otherwise obtain control over us.

Parachute Payments

        Under the Equity Incentive Plan, if the acceleration of the vesting and exercisability of stock awards, together with any other payments to a participant, would constitute a "parachute payment" within the meaning of Section 280G of the Code and such payments would be subject to the excise tax imposed by Section 4999 of the Code, then such payments will either be (1) provided to the participant in full or (2) reduced to such lesser amount that would result in no portion of such payments being subject to the excise tax, whichever amount after taking into account all applicable taxes, including the excise tax, would result in the participant's receipt, on an after-tax basis, of the greatest amount of such payments.

Duration, Termination and Amendment

        The Board may suspend or terminate the Equity Incentive Plan without stockholder approval or ratification at any time. Unless sooner terminated, the Equity Incentive Plan, as amended, will terminate on April 17, 2020.

        The Board may amend or modify the Equity Incentive Plan at any time, subject to any required stockholder approval. However, except as otherwise provided in the Equity Incentive Plan, no amendment or termination of the Equity Incentive Plan may impair any rights under awards already granted to a participant unless agreed to in writing by the affected participant. Stockholder approval will be required for any amendment that (a) materially increases the number of shares available for issuance under the Equity Incentive Plan, (b) materially expands the class of individuals eligible to receive stock awards under the Equity Incentive Plan, (c) materially increases the benefits accruing to the participants under the Equity Incentive Plan or materially reduces the price at which shares of common stock may be issued or purchased under the Equity Incentive Plan, (d) materially extends the term of the Equity Incentive Plan, or (e) expands the types of awards available for issuance under the Equity Incentive Plan.

        The Board also may submit any other amendment to the Equity Incentive Plan for stockholder approval, including amendments, intended to satisfy the requirements of Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limitation on the deductibility of compensation paid to certain employees.

Section 162(m) Approval

        Your approval of this proposal will also approve the amended menu of performance criteria to be used under the Plan to grant compensation attributable to performance stock awards or performance cash awards that are intended to qualify as performance-based compensation under Section 162(m) of the Code. Section 162(m) requires our stockholders to approve such performance goals at least every five years. We have amended the menu of performance criteria, and we are asking for approval of the amended menu as required by Section 162(m) of the Code in order to potentially qualify for the availability of federal tax deductions for certain performance-based compensation.

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Federal Income Tax Information

        The following is a summary of the principal United States federal income taxation consequences to participants and us with respect to participation in the Equity Incentive Plan. This summary is not intended to be exhaustive, and does not discuss the income tax laws of any city, state or foreign jurisdiction in which a participant may reside. This information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant's tax adviser regarding the federal, state, local, and other tax consequences of the grant or exercise of an award or the disposition of stock acquired under the Equity Incentive Plan. The Equity Incentive Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended. Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness, the provisions of Section 162(m) of the Code, if applicable, and the satisfaction of our tax reporting obligations.

        Incentive Stock Options.    Incentive stock options granted under the Equity Incentive Plan are intended to be eligible for the favorable federal income tax treatment accorded "incentive stock options" under the Code. There generally are no federal income tax consequences to the participant or us by reason of the grant or exercise of an incentive stock option. However, the exercise of an incentive stock option may increase the participant's alternative minimum tax liability, if any.

        If a participant holds stock acquired through exercise of an incentive stock option for more than two years from the date on which the option was granted and more than one year after the date the option was exercised for those shares, any gain or loss on a disposition of those shares (a "qualifying disposition") will be a long-term capital gain or loss. Upon such a qualifying disposition, we will not be entitled to any income tax deduction.

        Generally, if the participant disposes of the stock before the expiration of either of these holding periods (a "disqualifying disposition"), then at the time of disposition the participant will realize taxable ordinary income equal to the lesser of (a) the excess of the stock's fair market value on the date of exercise over the exercise price, or (b) the participant's actual gain, if any, on the purchase and sale. The participant's additional gain or any loss upon the disqualifying disposition will be a capital gain or loss, which will be long-term or short-term depending on whether the stock was held for more than one year.

        To the extent the participant recognizes ordinary income by reason of a disqualifying disposition, generally we will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation) to a corresponding income tax deduction in the tax year in which the disqualifying disposition occurs.

        Nonstatutory Stock Options.    No taxable income is recognized by a participant upon the grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock option, the participant will recognize ordinary income equal to the excess, if any, of the fair market value of the purchased shares on the exercise date over the exercise price paid for those shares. Generally, we will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation) to an income tax deduction in the tax year in which such ordinary income is recognized by the participant.

        Upon disposition of the stock, the participant will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such stock plus any amount recognized as ordinary income upon acquisition of the stock. Such gain or loss will be long-term or short-term depending on whether the stock was held for more than one year.

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        Stock Appreciation Rights.    No taxable income is realized upon the receipt of a stock appreciation right. Upon exercise of the stock appreciation right, the fair market value of the shares (or cash in lieu of shares) received is recognized as ordinary income to the participant in the year of such exercise. Generally, we will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation) to an income tax deduction in the year in which such ordinary income is recognized by the participant.

        Stock Purchase Awards and Stock Bonus Awards.    A participant acquiring restricted stock under a stock purchase award or a stock bonus award generally will recognize ordinary income equal to the difference between the fair market value of the shares on the "determination date" (as defined below) and the participant's purchase price, if any. The "determination date" is the date on which the participant acquires the shares unless they are subject to a substantial risk of forfeiture and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable, or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture. If the determination date is after the date on which the participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to have the date of acquisition be the determination date by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired.

        Upon the disposition of shares acquired pursuant to a stock purchase award or stock bonus award, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as a capital gain or loss. Such gain or loss will be long-term or short-term depending on whether the stock was held for more than one year. We will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation) to a corresponding income tax deduction in the year in which ordinary income is recognized by the participant.

        Stock Unit Awards.    No taxable income is recognized upon receipt of a stock unit award. The participant will recognize ordinary income in the year in which the shares subject to that unit are actually issued to the participant in an amount equal to the fair market value of the shares on the date of issuance. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant at the time the shares are issued for the taxable year in which such ordinary income is recognized by the participant.

        Potential Limitation on Deductions.    Section 162(m) of the Code denies a deduction to any publicly-held corporation for compensation paid to certain "covered employees" in a taxable year to the extent that compensation to each covered employee exceeds $1,000,000. It is possible that compensation attributable to awards, when combined with all other types of compensation received by a covered employee from us, may cause this limitation to be exceeded in any particular year.

        Certain kinds of compensation, including qualified "performance-based compensation," are disregarded for purposes of the deduction limitation. In accordance with Treasury Regulations issued under Section 162(m) of the Code, compensation attributable to stock options and stock appreciation rights will qualify as performance-based compensation if (a) such awards are granted by a compensation committee comprised solely of "outside directors," (b) the plan contains a per-employee limitation on the number of shares for which such awards may be granted during a specified period, (c) the per-employee limitation is approved by the stockholders, and (d) the exercise or strike price of the award is no less than the fair market value of the stock on the date of grant.

        Compensation attributable to stock purchase awards, stock bonus awards, stock unit awards, performance stock awards, and performance cash awards will qualify as performance-based compensation, provided that: (a) the award is granted by a compensation committee comprised solely of "outside directors," (b) the award is ranted (or vests or becomes exercisable) only upon the

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achievement of an objective performance goal established in writing by the compensation committee while the outcome is substantially uncertain, (c) the compensation committee certifies in writing prior to the grant, vesting or exercise of the award that the performance goal has been satisfied, and (d) prior to the grant of the award, stockholders have approved the material terms of the award (including the class of employees eligible for such award, the business criteria on which the performance goal is based, and the maximum amount, or formula used to calculate the amount, payable upon attainment of the performance goal).

Awards Granted Under the Equity Incentive Plan

        The following table sets forth, for each of the named executive officers, nominees for director and other groups indicated, the number of shares of our common stock subject to awards granted under the Equity Incentive Plan as of March 31, 2013. These awards reflect all grants made during the respective individual's or group's entire employment with Onyx or service as an independent Director, whether vested, unvested, exercised, expired, canceled or forfeited under the Equity Incentive Plan.

Equity Incentive Plan

New Plan Benefits Under Amendment of the Equity Incentive Plan

        Future awards granted under the Equity Incentive Plan to our directors, executive officers and employees are discretionary and are not subject to set benefits or amounts, and we have not approved any awards that are conditioned on stockholder approval of the amendment to the Equity Incentive Plan described in this Proposal 2. Accordingly, we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to our directors, executive officers or employees under the Equity Incentive Plan.

Vote Required

        The affirmative vote of the holders of a majority of votes cast either in person or by proxy at the Annual Meeting will be required to approve the amendment to the Equity Incentive Plan. Abstentions and broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether Proposal 2 has been approved.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL 2.

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PROPOSAL 3: APPROVAL OF THE CASH INCENTIVE PLAN

        The Board is requesting stockholder approval of the material terms of the Company's Cash Incentive Plan, which was established and approved by our Compensation Committee and Board in February 2013. The purpose of the Cash Incentive Plan is to increase stockholder value by providing a competitive cash incentive to certain of our executive officers to achieve corporate and individual performance goals established by the Compensation Committee. The Cash Incentive Plan, if approved by our stockholders, is expected to apply to performance cash awards for certain of our executives for 2014 and future years.

        The Board is requesting stockholder approval of the Cash Incentive Plan in order to separate, under a different plan document, the award of equity based performance incentives from the award of cash based performance incentives. In this way, if the Equity Incentive Plan were to expire, or to cease to meet the requirements for granting qualified "performance-based compensation" under Section 162(m) of the Code, the Compensation Committee would nonetheless retain the ability to grant awards that may qualify as "performance-based compensation" under Section 162(m) under the Cash Incentive Plan. If stockholders approve the Cash Incentive Plan, no further performance-based cash awards will be made under the Equity Incentive Plan following the effectiveness of the Cash Incentive Plan.

        Stockholder approval is not generally required for the Company to enact and maintain a cash incentive plan for our executives. Section 162(m) of the Code, disallows a deduction for certain compensation paid to our Chief Executive Officer and to each of our other three most highly compensated executive officers, other than our Chief Financial Officer (collectively referred to as our "covered employees"), in a taxable year to the extent that compensation to a covered employee exceeds $1 million for such year. However, some kinds of compensation, including qualified "performance-based compensation" under Section 162(m), are not subject to this deduction limitation if the compensation satisfies the requirements of Section 162(m). For awards under the Cash Incentive Plan to qualify as "performance-based compensation" under Section 162(m), among other things, the Cash Incentive Plan must describe the employees eligible to receive such awards, provide a per-person limit on the amount of cash that may be granted to any employee under the Cash Incentive Plan in any year, and include one or more pre-established business criteria upon which the performance goals applicable to cash incentives may be granted to our covered employees under the Cash Incentive Plan. These terms must be approved by our stockholders.

        While we believe it is in the best interests of the Company and our stockholders to preserve the ability to grant "performance-based compensation" under Section 162(m) of the Code, in certain circumstances, we may determine to grant compensation to covered employees that will not qualify as "performance-based compensation" for purposes of Section 162(m). Moreover, even if we intend to grant compensation that qualifies as "performance-based compensation" under Section 162(m), we cannot guarantee that such compensation ultimately will be deductible by us.

        The Compensation Committee currently has the ability to make performance cash awards that we believe meet the requirements of "performance-based compensation" for purposes of Section 162(m) of the Code under the Company's Equity Incentive Plan. The performance criteria described under the Cash Incentive Plan are identical to the performance criteria under the Equity Incentive Plan (subject to stockholder approval, as further described in Proposal 2). The Cash Incentive Plan will not enable the Compensation Committee or the Board to award performance-based cash incentives that are different from those that may be authorized under the Equity Incentive Plan, if approved by the stockholders as further described in Proposal 2. However, if this Proposal 3 is approved, we intend that future cash incentive awards will be granted under the Cash Incentive Plan rather than the Equity Incentive Plan, and the maximum size of cash incentive awards under the Cash Incentive Plan will be

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$3.5 million, which is an increase from the $2.0 million maximum currently authorized under the Equity Incentive Plan.

Summary of the Cash Incentive Plan

        The following is a summary of the material terms and provisions of the Cash Incentive Plan. This summary, however, does not purport to be a complete description of the Cash Incentive Plan. A copy of the Cash Incentive Plan is attached to this Proxy Statement as Annex B. The following summary is qualified in its entirety by reference to the complete text of the Cash Incentive Plan.

General

        The Cash Incentive Plan is intended to motivate executive officers of the Company to achieve short-term and long-term corporate objectives relating to the performance of the Company or one or more of the Company's business units, divisions, affiliates or business segments, as established by the administrator of the Cash Incentive Plan, and to reward those executives when those objectives are achieved, thereby tying executive performance to stockholder value. As discussed above, the awards made under the Cash Incentive Plan may qualify as "performance-based compensation" for purposes of Section 162(m).

Administration

        The Cash Incentive Plan is administered by the Compensation Committee or a sub-committee thereof (the "plan administrator"), in either case consisting solely of two or more outside directors of the Company who satisfy the requirements of Section 162(m) of the Code. An "outside director" generally is a director who (1) is neither a current or former officer nor current employee, (2) does not receive any remuneration from us other than compensation for service as a director, and (3) is not employed by and does not have ownership interests in an entity that receives remuneration from us (except within specified limits applicable under regulations issued pursuant to Section 162(m)). Among other things, the plan administrator of the Cash Incentive Plan will have the authority to select participants in the Cash Incentive Plan, and to determine the performance goals, award amounts and other terms and conditions of awards under the Cash Incentive Plan. The plan administrator also will have the authority to establish and amend rules and regulations relating to the administration of the Cash Incentive Plan, and will administer the Plan in a manner intended to comply with the requirements for "performance-based compensation" under Section 162(m), except in the case of awards that are not intended to qualify as "performance-based compensation."

Eligibility

        Our executive officers are eligible to participate in the Cash Incentive Plan. The plan administrator has the sole authority to designate participants in the Cash Incentive Plan. No executive officer is automatically entitled to participate in the Cash Incentive Plan and participation in the Cash Incentive Plan in any one performance period does not guarantee participation in the Plan for any other performance period.

Performance Criteria

        Pursuant to the terms of the Cash Incentive Plan, the plan administrator will establish in writing one or more objective performance goals based on the attainment of specified levels of one of or any combination of the following "performance criteria": (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv) net earnings; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross margin; (ix) operating income; (x) net income (before or

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after taxes); (xi) net operating income; (xii) net operating income after tax; (xiii) pre- and after-tax income; (xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue targets; (xvii) increases in revenue or product revenue; (xviii) expenses and cost reduction goals; (xix) improvement in or attainment of expense levels; (xx) improvement in or attainment of working capital levels; (xxi) economic value added; (xxii) market share; (xxiii) cash flow; (xxiv) cash flow per share; (xxv) share price performance; (xxvi) debt reduction; (xxvii) implementation or completion of projects or processes (including, without limitation, clinical trial initiation, clinical trial enrollment, clinical trial results, new and supplemental indications for existing products, regulatory filing submissions, regulatory filing acceptances, regulatory or advisory committee interactions, regulatory approvals, and product supply); (xxviii) customer satisfaction; (xxix) total stockholder return; and (xxx) stockholders' equity. The plan administrator, in its sole discretion, will determine the manner of calculating the specified performance goals selected for a performance period.

        The performance goals may be established on a Company-wide basis or with respect to one or more of the Company's business units, divisions, affiliates, or business segments, and may be measured in either absolute terms or relative to the performance of one or more comparable companies or a relevant index. The plan administrator is authorized to make adjustments in the method of calculating the attainment of performance goals as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; and (v) to exclude the effects of any "extraordinary items" as determined under generally accepted accounting principles.

        The Cash Incentive Plan also allows the Compensation Committee to select performance goals based on any other performance criteria selected by the Board. However, awards based on performance criteria not listed above will not, and are not intended to, qualify as performance-based compensation under Section 162(m) of the Code.

        The plan administrator will also establish one or more periods of time, each referred to as a performance period, which may be of varying and overlapping durations, over which the attainment of one or more performance goals will be measured.

Terms of Awards

        Awards under the Cash Incentive Plan will be payable based upon the achievement during each performance period of performance goals established by the plan administrator. With respect to awards that are intended to qualify as "performance-based compensation" under Section 162(m) of the Code, prior to the earlier of (1) ninety (90) days following the commencement of the applicable performance period and (2) the passage of twenty-five percent (25%) of the duration of such performance period and while the outcome is substantially uncertain, the plan administrator will establish in writing the performance goals for each award to a participant under the Plan and the threshold, target and maximum amounts of the award, as applicable, that may be earned if the performance goals are achieved at the levels corresponding to such amounts. After the end of the applicable performance period, the plan administrator will certify in writing the extent to which the performance goals are achieved and determine the amount of the award, if any, that is payable; provided that the plan administrator will have the discretion to determine that the actual amount paid with respect to an award will be less than (but not greater than) the payout calculated for awards made under the Cash Incentive Plan.

        As an alternative, the plan administrator may establish one or more performance goals as "threshold goals." The threshold goal may be established on a Company-wide basis or with respect to one or more of the Company's business units, divisions, affiliates or business segments, and may be

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measured either absolutely or relative to a designated group of comparable companies or a relevant index. The threshold goal must be established by the plan administrator in writing not later than ninety (90) days after the start of the performance period, but in no event after twenty-five percent (25%) of the performance period has elapsed, provided that the outcome of the threshold goal is substantially uncertain at such time. If the threshold goal is achieved, each participant in the Cash Incentive Plan will be eligible to earn a maximum award, the amount of which will be established no later than the time when the applicable performance goals are established, and in such case no awards will be payable unless the threshold goal is achieved. If the threshold goal is achieved, each participant's maximum award will be subject to possible reduction by the plan administrator based on factors determined by the plan administrator in its sole and absolute discretion.

Awards Amounts

        The plan administrator will determine the amount of the awards that will be paid to each participant if the specified performance goals are met and the method by which such amounts will be calculated. The maximum payout for awards under the Cash Incentive Plan to any one participant in any one calendar year is $3.5 million.

Payments

        Payment of awards, if any, under the Cash Incentive Plan will be paid as soon as administratively feasible after the plan administrator certifies in writing the extent to which the performance goals were achieved during the applicable performance period and determines the amount of the awards payable, but in no event will awards be paid later than March 15 of the calendar year following the end of the performance period to which such payments relate. To the extent required to comply with Section 162(m), no amount will be due and owing to any participant until the plan administrator has approved the payment, and no payment will be made unless and until the plan administrator has certified in writing regarding the achievement of the performance goals as required by Section 162(m).

        A participant under the Cash Incentive Plan must be a regular employee of the Company on the last day of the applicable performance period in order to earn any award in respect of such performance period.

Term of the Cash Incentive Plan

        Subject to stockholder approval of the Cash Incentive Plan, the Cash Incentive Plan will first apply to any performance periods that begin after the date of first stockholder approval of the Cash Incentive Plan, and the Cash Incentive Plan will continue in effect until the earlier of (i) the date on which the plan administrator terminates it and (ii) the date of the first stockholder meeting that occurs in 2018, unless the Company's stockholders again approve the Cash Incentive Plan on or before such date.

Amendment and Termination

        The plan administrator may amend, modify suspend or terminate the Cash Incentive Plan, in whole or in part, at any time and in any respect, including the adoption of amendments deemed necessary. However, in no event may any such amendment, modification, suspension or termination result in an increase in the amount of compensation payable as identified for the performance period or cause compensation that is intended to qualify as "performance-based compensation" under Section 162(m) to fail to so qualify.

Section 409A of the Internal Revenue Code

        It is intended that the Cash Incentive Plan and any awards granted under it be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

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Unfunded Obligation

        The Company's obligations under the Cash Incentive Plan will, in every case, be an unfunded and unsecured promise. A participant's rights as to any benefits under the Cash Incentive Plan will be no greater than those of general, unsecured creditors of the Company. The Company will not be obligated to fund its financial obligations under the Cash Incentive Plan.

New Cash Incentive Plan Benefits

        We cannot determine at this time the actual awards that will be paid under the Cash Incentive Plan, as awards will depend upon the individuals selected for participation during any given performance period, the amounts that may be earned by them as determined by the plan administrator during any such performance period and our actual performance during such performance period. We have not approved any awards that are conditioned on stockholder approval of the Cash Incentive Plan.

Vote Required

        The affirmative vote of the holders of a majority of votes cast either in person or by proxy at the Annual Meeting will be required to approve the Cash Incentive Plan. Abstentions and broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether Proposal 3 has been approved.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF PROPOSAL 3.

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PROPOSAL 4: APPROVAL OF THE 1996 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

        The Board is requesting stockholder approval of the Company's Purchase Plan, as amended. On March 26, 2013, the Board approved an amendment to the Purchase Plan, subject to stockholder approval, to increase the number of shares authorized for issuance under the Purchase Plan by 1,000,000 shares of common stock, to a total of 1,900,000 shares. The Purchase Plan originally was adopted by our Board on March 26, 1996 and subsequently approved by our stockholders on April 30, 1996. It was last amended and approved by our stockholders on May 25, 2007 to increase the number of authorized shares of common stock reserved for issuance under the Purchase Plan by an additional 500,000 shares.

        The purpose of the amendments is to ensure that we will have a sufficient reserve of common stock available under the Purchase Plan to provide eligible employees of the Company with the opportunity to purchase shares of common stock at periodic purchase dates through their accumulated payroll deductions. Our Board believes that it is in the best interests of the Company to amend the Purchase Plan to increase the number of shares for issuance because without this amendment, the number of shares currently available for issuance under the Purchase Plan is insufficient to continue providing our employees with the opportunity to acquire a proprietary interest in the Company and thereby attract, motivate, and retain the best available talent suitable for our success.

        Prior to taking into account the additional 1,000,000 shares of our common stock requested for issuance under the Purchase Plan pursuant to this Proposal 4, a total of 154,856 shares were available for issuance under the Purchase Plan. During 2012, 79,906 shares were purchased under the Purchase Plan at a purchase price of $45.76 per share. As of March 31, 2013, 154,856 shares remained available for issuance under the Purchase Plan.

        If this Proposal 4 is approved by our stockholders, the Purchase Plan, as amended by this Proposal 4, will become effective upon the date of the Annual Meeting. In the event that our stockholders do not approve this Proposal 4, the Purchase Plan will continue in its current form.

Description of the Purchase Plan, as Proposed to be Amended

        The material terms and provisions of the Purchase Plan are summarized below. This summary, however, does not purport to be a complete description of the Purchase Plan. The Purchase Plan is attached as Annex C to this Proxy Statement. The following summary is qualified in its entirety by reference to the complete text of the Purchase Plan.

        The following is a summary of the material features of the Purchase Plan:

Purpose

        The purpose of the Purchase Plan is to provide a means by which certain employees may be given an opportunity to purchase our common stock through payroll deductions, to attract, motivate, and retain the services of those individuals, and to provide incentives for those persons to exert maximum efforts toward our success.

Administration

        The Board administers the Purchase Plan and has the final power to construe and interpret both the Purchase Plan and the purchase rights granted thereunder. The Board has the power, subject to the provisions of the Purchase Plan, to determine the provisions of each offering of rights to purchase our common stock, and whether employees of any of our parent or subsidiary companies will be eligible to participate in the Purchase Plan.

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        The Board has the power to delegate administration of the Purchase Plan to a committee composed of not fewer than two members of the Board. In accordance with the provisions of the Purchase Plan, the Board has delegated administration of the Purchase Plan to the Compensation Committee. As used herein with respect to the Purchase Plan, the "Board" refers to any committee the Board appoints as well as to the Board itself.

Stock Subject to the Purchase Plan

        As a result of a series of amendments, as of March 31, 2013, there were 900,000 shares of common stock reserved for issuance under the Purchase Plan. If our stockholders approve this Proposal 4, subject to any adjustments for changes in our capitalization, an aggregate of 1,900,000 shares of common stock will be reserved for issuance under the Purchase Plan, which consists of 900,000 shares reserved for issuance at March 31, 2013, and the 1,000,000 shares for which we are seeking approval in this Proposal. Shares of stock subject to the Purchase Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

        As of March 31, 2013, an aggregate of 745,144 shares of our common stock had been issued under the Purchase Plan, and 154,856 shares of common stock remained available for future issuance.

Offering Periods

        Shares of common stock are offered under the Purchase Plan through a series of offering periods of such duration as determined by the Board, provided that in no event may an offering period exceed 27 months. Each offering period consists of one or more purchase dates, as determined by the Board prior to the commencement of that offering period. The Board has the authority to alter the duration of subsequent offering periods or change the number of purchase dates within each such offering period. When an eligible employee elects to join an offering period, he or she is granted a purchase right to acquire shares of common stock on each purchase date within the offering period. On the purchase date, all payroll deductions collected from the participant are automatically applied to the purchase of common stock, subject to certain limitations.

        In 2006, the Board determined that all offering periods beginning thereafter will have a duration of six (6) months, with a single purchase date on the last business day of each offering period. Currently, offering periods run from the first business day in January to the last business day in June and from the first business day in July to the last business day in December in each year. The purchase dates are scheduled for the last business days of June and December each year.

Eligibility

        Any person who is customarily employed at least 20 hours per week and five months per calendar year by us (or by any of our parent or subsidiary companies, if designated by the Board) on the first day of an offering period is eligible to participate in that offering under the Purchase Plan, provided such employee has been in our continuous employment for such continuous period preceding the first day of the offering period as the Board may require, but in no event may the required period of continuous employment be greater than two years. The Board may provide in any offering that certain of our employees who are "highly compensated" as defined in the Code are not eligible to participate in the Purchase Plan.

        No employee may purchase more than $25,000 worth of our common stock (valued at the time each purchase right is granted) for each calendar year during which those purchase rights are outstanding. In addition, no employee is eligible to participate in the Purchase Plan if, immediately after the grant of purchase rights, the employee would own, directly or indirectly, stock possessing 5% or more of the total combined voting power or value of all classes of stock of us or of any of our

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parent or subsidiary companies (including any stock which such employee may purchase under all outstanding purchase rights and options).

        As of March 31, 2013, approximately 730 employees were eligible to participate in the Purchase Plan, of whom approximately 476 were participating.

Shares Purchased Under the Purchase Plan

        The following table sets forth, for each of the named executive officers, nominees for director and other groups indicated, the number of shares of our common stock purchased under the Purchase Plan as of March 31, 2013:

        The following table shows the number of shares purchased under the Purchase Plan for 2010, 2011 and 2012:

        The average number of shares purchased under the Purchase Plan (expressed as a percent of the weighted average number of shares of common stock outstanding) for 2010 through 2012 was 0.13%.

Forecasted Utilization

        Based on the rapid growth in our employee population in 2012, projected new hires to support continued business expansion in 2013, and the high level of employee participation in the Purchase Plan, the remaining shares available for issuance under the Plan are not sufficient to ensure long term continuation of the Plan. Based on historic levels of employee participation in the offerings made under the Purchase Plan and our estimated future employee numbers, if this Proposal 4 is approved, we anticipate the authorized number of shares available for issuance under the Purchase Plan will be sufficient to meet anticipated purchases under the Purchase Plan until approximately 2019. In estimating future utilization of shares under the Purchase Plan, we have made assumptions regarding purchases which are highly dependent on the public trading price of our common stock and other factors, which we do not control. In evaluating these estimates, our Board recognized the high

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variability inherent in these assumptions. The inclusion of the estimate above should not be regarded as an indication that it will be predictive of actual future outcomes, and we do not intend to update or otherwise revise the estimate to reflect circumstances existing after the date when made.

Participation in the Plan

        Eligible employees enroll in the Purchase Plan by delivering to us, prior to the date selected by the Board as the beginning of the offering period, an agreement authorizing payroll deductions of up to 15% of such employees' eligible compensation during the offering period.

        During the last fiscal year, shares of common stock were purchased in the amounts and at the weighted average prices per share under the Purchase Plan as follows:

2012 Participation in the Employee Stock Purchase Plan

Purchase Price

        The purchase price per share at which shares of common stock are sold on each purchase date during an offering period is the lower of (a) 85% of the fair market value per share of common stock on first day of the offering, and (b) 85% of the fair market value per share of common stock on that purchase date.

Payment of Purchase Price; Payroll Deductions

        The purchase price of the shares is funded by payroll deductions accumulated over the offering period. At any time during the offering period, a participant may reduce or terminate his or her payroll deductions as the Board provides in the offering document for the applicable offering period. A participant may not increase or begin such payroll deductions after the beginning of any offering period. All payroll deductions made for a participant are credited to his or her account under the Purchase Plan and deposited with our general funds. A participant may make additional payments into such account only as specifically provided for in the offering and only if the participant has not exceeded certain limitations under the Purchase Plan or such offering period.

Purchase of Stock

        By executing an agreement to participate in the Purchase Plan, the employee is entitled to purchase shares under the Purchase Plan. In connection with offerings made under the Purchase Plan, the Board specifies a maximum number of shares of common stock an employee may purchase and the maximum aggregate number of shares of common stock that may be purchased by all participants in such offering. If the aggregate number of shares to be purchased upon exercise of outstanding purchase rights in the offering would exceed the maximum aggregate number of shares of common stock available, the Board will make a pro rata allocation of available shares in a uniform and equitable manner. Unless the employee's participation is discontinued, his or her right to purchase shares is exercised automatically at the next purchase date at the applicable price. See "Withdrawal" below.

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Withdrawal

        Participants may withdraw from a given offering period by delivering a notice of withdrawal and terminating their payroll deductions. Such withdrawal may occur at any time prior to the end of an offering period except as otherwise provided by the Board. Upon such withdrawal, we will refund accumulated payroll deductions without interest to the employee, and such employee's right to participate in that offering will terminate. However, an employee's withdrawal from an offering does not affect such employee's eligibility to participate in subsequent offerings under the Purchase Plan.

Termination of Employment

        Purchase rights granted pursuant to any offering under the Purchase Plan terminate immediately upon cessation of employment for any reason, and we will refund all accumulated payroll deductions to the terminated employee without interest.

Restrictions on Transfer

        Purchase rights granted under the Purchase Plan are not transferable and may be exercised only by the person to whom such rights are granted.

Changes in Capitalization

        In the event that there is any change to the outstanding common stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or other transaction not involving the receipt of consideration by the Company), appropriate adjustments will be made to (a) the maximum number of shares of common stock subject to the Purchase Plan, (b) the number of shares and price per share in effect under each outstanding purchase right, and (c) the number of shares and purchase limits of all outstanding purchase rights.

Effect of Certain Corporate Transactions

        In the event of certain significant corporate transactions, any surviving or acquiring corporation may assume or substitute similar purchase rights for those outstanding under the Purchase Plan. If the surviving or acquiring corporation does not assume such rights or substitute similar rights, then the participants' accumulated payroll deductions will be applied to the purchase of shares of common stock immediately prior to the corporate transaction, and such purchase rights will terminate immediately thereafter.

        A significant corporate transaction will be deemed to occur in the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation, (c) a merger or consolidation in which the Company is the surviving corporation, but shares of outstanding common stock are converted into other property by virtue of the corporate transaction, or (d) any person or group acquires securities representing at least 50% of the combined voting power entitled to vote in the election of directors of the Company.

Termination and Amendment

        The Board may suspend or terminate the Purchase Plan at any time.

        The Board may amend the Purchase Plan at any time. Any amendment of the Purchase Plan must be approved by the stockholders within 12 months of its adoption by the Board if such amendment (a) would increase the number of shares of common stock reserved for issuance under the Purchase Plan, (b) modify the requirements relating to eligibility for participation in the Purchase Plan, (c) is

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necessary for the Purchase Plan to satisfy Section 423 of the Code or other applicable laws and regulations.

        Purchase rights granted before amendment or termination of the Purchase Plan will not be altered or impaired by any amendment or termination of the Purchase Plan without consent of the employee to whom such purchase rights were granted.

New Plan Benefits

        The benefits to be received by the Company's executive officers and employees under the Purchase Plan are not determinable because, under the terms of the Purchase Plan, the amounts of future purchases are based on elections made by participants. Future purchase prices are not determinable because they are based on the fair market value of the Company's common stock on the purchase date. No purchase rights have been granted, and no shares of common stock have been issued, with respect to the 1,000,000 share increase for which stockholder approval is being sought.

Federal Income Tax Information

        The following is a summary of the principal United States federal income taxation consequences to participants and the Company with respect to participation in the Purchase Plan. This summary is not intended to be exhaustive, and does not discuss the income tax laws of any city, state or foreign jurisdiction in which a participant may reside. This information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant's tax adviser regarding the federal, state, local and other tax consequences of participant in the Purchase Plan. The Purchase Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

        The Purchase Plan is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Code. Under such an arrangement, a participant will be taxed on amounts withheld for the purchase of shares of common stock as if such amounts were paid directly to the participant. However, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon either the grant or exercise of purchase rights. Taxable income is not recognized until there is a sale or other disposition of the shares acquired under the Purchase Plan, or should the participant die while owning the purchased shares.

        If a participant sells or otherwise disposes of the purchased shares within two years after the beginning of the offering period in which such shares were acquired or within one year after the actual purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the shares on the purchase date exceed the purchase price paid for those shares, and the Company will be entitled to an income tax deduction, for the taxable year in which such disposition occurs, equal in amount to such excess. The participant will also recognize a capital gain to the extent the amount realized upon the sale of the shares exceeds the sum of the aggregate purchase price for those shares and the ordinary income recognized in connection with their acquisition.

        If the participant sells or disposes of the purchased shares more than two years after the beginning of the offering period in which such shares were acquired and more than one year after the actual purchase date of those shares, the participant will recognize ordinary income in the year of sale or disposition equal to the lesser of (a) the amount by which the fair market value of the shares on the sale or disposition date exceeded the purchase price paid for those shares, or (b) 15% of the fair market value of the shares at the beginning of that offering period. Any additional gain upon the

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disposition will be taxed as a long-term capital gain. The Company will not be entitled to an income tax deduction with respect to such disposition.

        If the participant still owns the purchased shares at the time of death, the lesser of (a) the amount by which the fair market value of the shares on the date of death exceeds the purchase price, or (b) 15% of the fair market value of the shares at the beginning of the offering period in which those shares were acquired will constitute ordinary income in the year of death.

Vote Required

        The affirmative vote of the holders of a majority of votes cast either in person or by proxy at the Annual Meeting will be required to approve the amendment to the Purchase Plan. Abstentions and broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether Proposal 4 has been approved.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 4.

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PROPOSAL 5: ADVISORY VOTE ON EXECUTIVE COMPENSATION

        We are asking our stockholders to cast an advisory vote to approve the 2012 compensation of our named executive officers listed in the "Executive Compensation—Summary Compensation Table" as disclosed in this Proxy Statement. This Proposal, commonly known as a "say-on-pay" proposal, gives our stockholders the opportunity to express their views on the design and effectiveness of our executive compensation programs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. We currently hold say-on-pay votes every year and the next vote is expected to occur at next year's Annual Meeting of stockholders.

        As described in detail under the heading "Compensation Discussion and Analysis," our executive compensation programs are designed to attract, motivate, and retain our named executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of both specific financial and strategic goals, which are expected to result in increased stockholder value. Please read the "Compensation Discussion and Analysis" and the compensation tables and the narrative disclosures that accompany the compensation tables within the Executive Compensation section of this Proxy Statement for details about our executive compensation programs, including information about the fiscal year 2012 compensation of our named executive officers.

        We believe that our executive compensation programs have been effective at motivating the achievement of positive results, appropriately aligning pay and performance, and enabling us to attract and retain talented executives within our industry.

Vote Required

        Approval of Proposal 5 requires the affirmative vote of holders of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of this Proposal.

        As an advisory vote, the outcome of the vote on this Proposal is not binding upon us. However, our Compensation Committee, which is responsible for designing and administering our executive compensation programs, values the opinions expressed by our stockholders in their vote on this Proposal and will consider the outcome of this vote when making future compensation decisions for our named executive officers.

        THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 5.

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PROPOSAL 6: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        The Audit Committee of the Board has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013 and has further directed that management submit the selection of the independent registered public accounting firm for ratification by the stockholders at our Annual Meeting. Ernst & Young has audited our financial statements since our inception in 1992. Representatives of Ernst & Young are expected to be present at our Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

        Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young as our independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Ernst & Young to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in our and our stockholders' best interests.

        The affirmative vote of the holders of a majority of the votes cast either in person or by proxy at our Annual Meeting will be required to ratify the selection of Ernst & Young. Abstentions and broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this Proposal 6 has been approved.

Principal Accountant Fees and Services

        In connection with the audit of the 2012 financial statements, we entered into an engagement agreement with Ernst & Young which sets forth the terms by which Ernst & Young will perform our audit services. That agreement is subject to alternative dispute resolution procedures.

        The following table represents aggregate fees billed to us for fiscal years ended December 31, 2012 and December 31, 2011 by Ernst & Young, our principal accountant:

        In the above table, in accordance with the SEC's definitions and rules, "audit fees" are fees we paid Ernst & Young for professional services for the audit of our financial statements included in Form 10-K and review of financial statements included in Form 10-Qs, for services related to attestation of the effectiveness of internal controls under the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and for services that are normally provided by the accountant in connection with statutory and regulatory filings; and "tax fees" are fees for preparation of federal and state income tax returns and related tax advice.

        All fees and services described above were pre-approved by the Audit Committee.

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Pre-Approval Policies and Procedures

        The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Ernst & Young. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee's approval of the scope of the engagement of the independent auditor or on an individual explicit case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee's members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.

        The Audit Committee has determined that the rendering of the services other than audit services by Ernst & Young is compatible with maintaining the principal accountant's independence.

        THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 6.

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)

        The Audit Committee has prepared the following report on its activities with respect to our audited financial statements for the year ended December 31, 2012.

        Our management is responsible for the preparation, presentation and integrity of our financial statements and is also responsible for maintaining appropriate accounting and financial reporting practices and policies. Management is also responsible for establishing and maintaining adequate internal controls and procedures designed to provide reasonable assurance that we are in compliance with accounting standards and applicable laws and regulations.

        Ernst & Young LLP, our independent registered public accounting firm for 2012, is responsible for expressing opinions on the conformity of our audited financial statements with accounting principles generally accepted in the United States and has expressed its own opinion on the effectiveness of our internal control over financial reporting.

        In this context, the Audit Committee has reviewed and discussed with management and Ernst & Young the audited financial statements for the fiscal year ended December 31, 2012, management's assessment of the effectiveness of our internal control over financial reporting and Ernst & Young's independent evaluation of our internal control over financial reporting. The Audit Committee has also discussed with Ernst & Young the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards , Vol. 1. AU section 380) as adopted by the Public Company Accounting Oversight Board ("PCAOB") in Rule 3200T. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, regarding the independent registered public accounting firm's communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the independent registered public accounting firm's independence.

        Based on the considerations referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2012 be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

        From the members of our Audit Committee:

Corinne H. Nevinny, Chair
Magnus Lundberg
William R. Ringo

(1)

This Section is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, other than the Company's Annual Report on Form 10-K, whether made before or after the date hereof and irrespective of any general incorporation language in that filing.

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MANAGEMENT

        Information with respect to our executive officers as of March 31, 2013 is set forth below. Information with respect to Dr. Coles, our Chairman and Chief Executive Officer, is set forth in this Proxy Statement under Proposal 1, "Election of Directors."

        Matthew K. Fust joined us as Executive Vice President and Chief Financial Officer in January 2009. From May 2003 to December 2008, Mr. Fust served as Chief Financial Officer at Jazz Pharmaceuticals, Inc., a specialty pharmaceutical company. From 2002 to 2003, Mr. Fust served as Chief Financial Officer at Perlegen Sciences, a biopharmaceutical company. Previously, he was Senior Vice President and Chief Financial Officer at ALZA Corporation, a public pharmaceutical company, where he was an executive from 1996 until 2002. Mr. Fust serves on the Board of Directors of Sunesis Pharmaceuticals, a public biopharmaceutical company. Mr. Fust received a B.A. from the University of Minnesota and an M.B.A. from the Stanford Graduate School of Business.

        Helen I. Torley, M.B., Ch.B., M.R.C.P. joined us in August 2011 as Executive Vice President and Chief Commercial Officer. Dr. Torley oversees all of our commercial activities for Nexavar and the launch of Kyprolis and oversees the development of our commercial capabilities in Europe. From 2002 to 2011, Dr. Torley held various positions at Amgen where she most recently served as vice president and general manager of the Bone Health Unit, after leading the company's Nephrology Business Unit for five years. Dr. Torley received her M.B. Ch.B (the U.K. equivalent of an M.D.) from the University of Glasgow and is a Member of the Royal College of Physicians.

        Kaye I. Foster-Cheek joined us in September 2010 as Senior Vice President, Global Human Resources. From May 2003 to March 2010, Ms. Foster-Cheek was Vice President of Human Resources and Executive Committee Member at Johnson & Johnson where she was responsible for the human resources and talent management functions. Ms. Foster-Cheek earned her undergraduate degree at Baruch College of the City University of New York and received an M.B.A. from Columbia University, Graduate School of Business.

        Juergen Lasowski, Ph.D., joined us as Senior Vice President, Corporate Development in May 2008. In February 2011, Dr. Lasowski was appointed Executive Vice President, Corporate Development and Strategy. From April 2006 to October 2007, Dr. Lasowski was the Senior Vice President of Corporate

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Development at NPS Pharmaceuticals. Dr. Lasowski earned a Ph.D. in organic chemistry from the University of Mainz, Germany and an M.B.A. from INSEAD in France.

        Suzanne M. Shema, J.D., joined us as Senior Vice President and General Counsel in August 2009. In January 2012, Ms. Shema was appointed Executive Vice President and Corporate Secretary. From 2006 to 2009, Ms. Shema served as General Counsel and Corporate Compliance Officer at ZymoGenetics, Inc., a biopharmaceutical company. Ms. Shema received a B.S. in Chemistry from the University of Texas, an M.S. in Chemistry from the University of Washington and a J.D. from the University of Washington School of Law.

        Dr. Pablo J. Cagnoni, M.D., joined us as Executive Vice President, Global Research and Development and Technical Operations in March 2013. Before joining us, Dr. Cagnoni was Senior Vice President and Global Head of Clinical Development of Novartis Oncology. Prior to joining Novartis in 2009, Dr. Cagnoni served as Senior Vice President and Chief Medical Officer at Allos Therapeutics, Inc. Before joining Novartis, Dr. Cagnoni served as Chief Medical Officer and Vice President of Clinical Research and Medical Affairs at OSI Pharmaceuticals. Before joining OSI Pharmaceuticals, he served as Vice President and Head of Clinical Development at Allos Therapeutics. Previous to his industry experience, Dr. Cagnoni was Assistant Professor of Medicine and Assistant Director Pharmacology Laboratory, University of Colorado Bone Marrow Transplant Program. Dr. Cagnoni earned his medical degree from University Buenos Aires School of Medicine and he completed his fellowship in Hematology and Oncology, in the Division of Hematology, Department of Medicine at Mount Sinai Medical Center, New York and a fellowship in Stem Cell Transplantation at the University of Colorado Health Sciences Center.

        Julianna Wood joined us as Vice President, Corporate Communications and Investor Relations in May 2003. In January 2011, Ms. Wood was appointed Vice President, Public Affairs. Prior to joining us, Ms. Wood served in senior investor relations and public communications positions at Caliper Technologies Corporation, Sangamo BioSciences, Inc. and Chiron Corporation. Ms. Wood holds a B.A. from Stanford University and has an M.B.A. from Duke University.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information regarding the ownership of our common stock as of February 15, 2013 by: (i) each Director and nominee for Director; (ii) each of the executive officers named in the Summary Compensation Table; (iii) all of our current executive officers and Directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our common stock.

Beneficial Ownership(1)

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934 Act") requires our Directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, Directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

        To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2012 all Section 16(a) filing requirements applicable to our officers, Directors and greater than ten percent beneficial owners were complied with; except that due to an administrative error, one report, covering one transaction, was filed late by each of Dr. Torley and Ms. Nevinny.

COMPENSATION DISCUSSION AND ANALYSIS

        This Compensation Discussion and Analysis addresses the following topics:

•

our compensation philosophy and objectives;



•

our process for setting executive officer performance criteria and compensation;



•

the components of executive officer compensation; and

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•

our compensation decisions for 2012 and for the first quarter of 2013 for our named executive officers.

        Our named executive officers for 2012 were as follows:

Executive Compensation Philosophy and Objectives

        The Compensation Committee's overall goals with respect to executive officer compensation are to provide market-competitive compensation to attract, motivate and retain executives of outstanding ability, performance and potential, and to establish and maintain an appropriate relationship between executive compensation and the creation of stockholder value. The Compensation Committee believes that the most effective compensation program is one that provides competitive base pay, rewards the achievement of established annual and long-term goals and objectives and provides an incentive for long-term stockholder value creation as well as significant retention value.

Compensation Objectives

        Our executive compensation program is designed around the following five principles:

1)

developing compensation policies and practices that are consistent with our strategic business objectives;



2)

attracting, motivating and retaining executive officers and other employees who contribute to the long-term success of the organization;



3)

designing programs to retain key employees, reward past performance and incentivize future contributions balancing both short- and long-term financial and business objectives to build a sustainable business;



4)

providing long-term incentive opportunities to strengthen the relationship between employee contributions, rewards and stockholder value creation; and



5)

aligning our compensation programs with our core values and culture.

Target Pay Position/Mix of Pay

        The components used to support these objectives are base salary, variable incentive pay (including our annual incentive bonus program and equity awards) and certain other benefits (discussed in greater detail below under "Executive Compensation Components"). The combination of these pay elements

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allows us to provide a competitive total rewards package to our executives. In 2012, equity awards represented, on average, approximately 70% of total compensation payable to our named executive officers, and cash compensation represented, on average, approximately 30% of total compensation payable to our named executive officers, with the exception of Mr. Osborn and Dr. Love. The Company's market for employee talent is competitive, and generally, the Committee has targeted the 60^th percentile for base and variable incentive pay and the 50^th percentile for target equity compensation. Since 2011, however, the Committee has also established the opportunity to achieve 75^th percentile equity compensation, conditioned on the achievement, certified by the Committee, of target performance objectives that, if achieved, the Committee expects will increase long term stockholder value. For example, the accelerated approval of Kyprolis was a performance objective established in 2011 which was achieved in July 2012 and significantly increased stockholder value. The Compensation Committee's intention is that long-term equity compensation, measured as the value transferred on grant date, continues to be the largest component of executive compensation. Employees in more senior roles have an increasing proportion of their compensation tied to long-term performance because they are in a position to have greater influence on long-term results and value creation. For each target or pre-determined element of compensation, such as base salary, target bonus and value of equity awards, our strategy has been to examine peer group compensation practices and set target compensation at approximately the 60^th percentile of the peer group for base salary and bonus and the 75^th percentile for total equity compensation including at-risk performance-based equity awards to senior management and executives. The 60^th and 75^th percentiles are targeted based on the Committee's stated compensation philosophy and on analysis from Radford, taking into account the Company's position relative to its peer companies, as measured using market capitalization, therapeutic area, revenue, number of products on the market, research and development expense, cash on hand, stock price performance, net income, number of employees and other key business metrics of top biotechnology companies. This is the same target pay position for all our employee levels, except that for employees below the Vice President level, who do not receive equity awards subject to performance-based vesting, we target approximately the 50^th percentile. We believe that targeting overall pay at these levels is necessary and appropriate in order to attract and retain the quality of talent we need to successfully grow our business, achieve our challenging objectives, and differentiate ourselves from those companies against which we compete for talent. However, any given individual employee's compensation may vary from these targeted percentiles, based on the unique responsibilities and requirements of his or her position, his or her experience and other qualifications, and individual or Company performance relative to performance goals and the peer group to ensure appropriate pay-for-performance alignment. In addition, we emphasize variable, or at-risk, compensation at all levels in Onyx to link actual compensation to corporate performance.

        The Compensation Committee determines and approves the compensation levels for all our executive officers and establishes corporate performance objectives. As a part of determining executive officer performance and compensation, the Compensation Committee received recommendations from the Chief Executive Officer (except with respect to his own compensation) and engaged Radford, an AON Hewitt Consulting Company. Radford provides analysis and recommendations regarding:

•

trends and emerging topics with respect to executive compensation;



•

peer group selection for executive compensation benchmarking;



•

compensation practices of our peer group;



•

compensation philosophy and programs for executives and broad-based employees;



•

stock utilization and other metrics; and



•

Board of Directors compensation.

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        In addition, the Company subscribes to Radford's various global annual and specialized life sciences and general industry surveys on an ongoing basis. Radford advised the Compensation Committee on all of the principal aspects of executive compensation, including executive new hire compensation arrangements. Radford consultants attend meetings of the Compensation Committee, including executive sessions in which executive compensation issues are discussed, when requested to do so. Radford reports to the Compensation Committee and not to management, although they meet with management for purposes of gathering information for their analyses and recommendations. The Compensation Committee annually evaluates its engagement of compensation consultants, and selected Radford to advise with respect to 2012 compensation matters based on Radford's industry experience, reputation, and long-term relationship with the Company, all of which the Compensation Committee concluded give Radford useful context and knowledge to advise it.

Compensation Benchmarking

        The Compensation Committee benchmarks the Company's executive compensation against a peer group of companies to determine competitiveness and market trends. The Compensation Committee reviews the companies in our peer group annually, reviews Radford's recommendations regarding which companies should be included in the peer group, and makes adjustments as necessary to ensure the peer group continues to properly reflect the market in which we compete for talented executives. The Committee also annually reviews the executive pay practices of other similarly-situated companies as reported by Radford through industry surveys, proxy analysis and specific subject reports. These surveys are generally specific to the biopharmaceutical and biotechnology sector. We request customized reports of these surveys so that the compensation data reflect the practices of companies that are similar to us. The Compensation Committee considers this information when making determinations for each element of compensation.

        In developing the peer group of companies for 2012, the Compensation Committee, with assistance from Radford, examined market capitalization, therapeutic area, revenue, number of products on the market, research and development expense, cash on hand, stock price performance, net income, number of employees and other key business metrics of top biotechnology companies and based on review of these companies, formulated the final peer group for 2012. The peer group examined and approved for 2012 consisted of the following biotechnology companies:

        The 2012 peer group represents a smaller, more focused group of companies than the group we used in 2011. The 2012 peer group is more closely aligned to the Company in the key measures the Committee used, on the recommendation of Radford, in assessing the Company's competitive market and target compensation levels for executives, as listed above.

        Our Compensation Committee believes that peer group comparisons provide useful guidelines to measure the competitiveness of our compensation practices. The Compensation Committee understands that no two companies are exactly alike, and it maintains the discretion to set levels of named executive officer compensation above or below levels paid by our peers based upon factors such as individual performance, a named executive officer's level of experience and responsibilities, individual discussions with the named executive officer, and the Committee's assessment of the named executive officer's performance. Also, in certain cases, the Company may benchmark against groups other than the peer

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group. For example, we may choose to benchmark against different competitors in labor markets outside the United States, for specific unique or hard-to-fill jobs or job families, or when insufficient data are available from the peer group companies for a particular job or job family. The Compensation Committee did not benchmark against groups other than the peer group for 2012 compensation decisions related to our named executive officers.

        For the purposes of 2013 compensation decisions, the Compensation Committee, with the advice of Radford, examined the peer list and, in light of the Company's substantial growth in 2012, the accelerated approval of Kyprolis, the successful commercial launch of Kyprolis and Stivarga and clinical program advancement, and with reference to market capitalization, therapeutic area, revenue, number of products on the market, research and development expense, cash on hand, stock price performance, net income, number of employees and other key business metrics, approved the following biotechnology companies as the Company's 2013 peer group:

Say-on-Pay

        At last year's annual meeting of stockholders, we held a non-binding stockholder vote on our 2011 executive compensation practices. The Compensation Committee, while not bound to act on a negative vote, carefully considers the opinions of the stockholders in making compensation decisions. The 2012 vote to approve 2011 executive compensation passed with 49,203,198 votes for, 1,982,479 votes against, 250,192 abstaining, and 6,319,955 broker non-votes. In light of this positive support for the 2011 executive compensation, the Compensation Committee continued with the same approach and philosophy to executive compensation decisions. In alignment with its philosophy on stockholder say-on-pay, and with the results of the say-on-pay frequency vote held in 2011, we will continue to hold non-binding stockholder say-on-pay votes annually.

Executive Compensation Components

Base Salary

        Base salary is the primary fixed compensation element in the executive pay program. Our Compensation Committee believes that base salaries should reflect the job responsibilities, performance, experience and skill level of the executive, as well as pay levels relative to similar positions at companies in our peer group, and internal parity with respect to the rest of the executive team. We have an annual "merit budget" based on data and recommendations provided by Radford, which is the Company's overall budget for merit based salary increases and includes recommended guidelines for adjustments based on employees' individual performance against annual goals and objectives and their compensation compared to similar positions within and outside of the Company. These guidelines are used throughout our company for all employees. Beginning in 2013, all annual merit based salary increases are effective on March 1 of each year.

Variable Incentive Pay

        All Company employees are eligible to earn variable incentive pay, either through our annual incentive bonus program or through our sales compensation program. All executives participate in the Annual Incentive Bonus Program and in future years, will be eligible to participate in the annual

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programs under the Cash Incentive Plan if approved by our stockholders at this Annual Meeting. Our variable incentive pay programs are designed to provide an "at-risk" cash compensation arrangement for all employees, and are designed to reward the achievement of key financial, operational and strategic goals that we believe build long-term stockholder value. Payment of cash bonuses to our executive officers is subject to the achievement of a minimum performance threshold tied to our corporate goals, as established by the Board.

Equity Compensation

        Equity compensation represents the largest at-risk component of our executive officers' compensation arrangements. We believe that it is appropriate to align the interests of our executive officers with those of our stockholders to achieve and sustain long-term stock price growth. In 2012 we accomplished this objective by providing executive officers with a substantial economic interest in the long-term appreciation of our common stock through the granting of a mix of time-vested stock options, RSUs, measured on an option-equivalent basis, and performance-vested RSUs to target approximately the 75^th percentile of our peer group if performance goals are achieved. Stock options provide value only if our stock price increases, which benefits all stockholders and the executive or employee only if he or she remains with us until his or her options vest, thus aligning the interests of our stockholders, and our employees and executives, during their employment, with the long-term success of the Company. Time-vested RSUs provide immediate retention value for our executives and employees. Performance-vested RSUs vest only upon Compensation Committee certification of performance achievement, and no shares are earned if the goals are not met.

        Our standard practice is to grant options to executive officers upon hire that vest ratably over a four-year period (the first 1/4th vests one year from the grant date and 1/48th vests each month thereafter until fully vested) and each year to grant additional options to executive officers that vest 1/8th after six months from the grant date and 1/48th each month thereafter over four years. Stock options granted for promotions vest ratably 1/48th each month from the grant date over four years. Restricted stock awards and RSUs that are granted upon hire or on our normal annual grant cycle, subject to time-based vesting and were granted prior to February 2013 vest over three years, with 1/3rd vesting on each of the three anniversaries of the grant date. RSU awards subject to time-based vesting and granted beginning in February 2013 vest over four years, with one-quarter of the award vesting on each of the four anniversaries of the grant date. We believe this new four year RSU vesting schedule is comparable to those used by our peers and encourages retention of our executive officers. We also award RSUs that are subject to performance-based vesting, which vest only if predetermined performance milestones are achieved, and achievement certified by the Compensation Committee.

Equity Grant Practices

        Generally, our Compensation Committee approves all equity grants to our executive officers. Prior to 2013, equity grants made to the Chairman and Chief Executive Officer were approved by the full Board of Directors, based on recommendations made by the Compensation Committee, but beginning in 2013 the Board of Directors has delegated authority to the Compensation Committee to approve all elements of the Chairman and Chief Executive Officer's compensation, including equity grants. We grant options at exercise prices equal to the closing price of our common stock on Nasdaq on the date of grant. In addition, we do not coordinate grants of options so that they are made before an announcement of favorable information, or after an announcement of unfavorable information. To date, we have not repriced or replaced any stock options if the grant price declines after the grant date. Our current practice is to grant stock options to executive employees on their first day of employment, and to non-executive employees generally on the 10th day of the month following the month of their first date of employment. The current grant date for annual equity incentive awards for all employees, including executive officers, is the last trading day of March, which was March 28, 2013 for this

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calendar year. Re-pricing or replacement of stock options, for any reason, can only occur upon a majority vote of our stockholders as defined in our Equity Incentive Plan. The annual grant date and associated exercise price of executive officer grants are the same as for the rest of the employee population. Our Compensation Committee selected the date of the first regular Compensation Committee and Board of Directors meetings of each year as the date to approve annual equity grants because it coincides with our Compensation Committee's and, prior to 2013, Board of Directors' review of the Company's and individuals' performances during the year and the approval of other executive officer compensation decisions (e.g., base salary increases and bonus payments). Further, our Compensation Committee believes that the meetings provide adequate time for our Compensation Committee to ask questions of the Chairman and Chief Executive Officer regarding his recommendations for the other executive officers and to carefully deliberate on the Chairman and Chief Executive Officer's compensation arrangements.

        For administrative efficiency, our Board of Directors has granted to the Chairman and Chief Executive Officer, Chief Financial Officer, Senior Vice President, Global Human Resources and Executive Vice President, General Counsel and Corporate Secretary the authority to approve option and RSU grants to all employees other than executive officers. The Board has granted to the Chairman and Chief Executive Officer the authority to approve performance-vested RSU grants to non-executive officer employees. The purpose of this delegation of authority is to enhance the flexibility of option and RSU administration within the Company and to facilitate the timely granting of options and RSUs to employees, particularly new employees. All stock options and RSUs granted by the authorized delegates must comply with the terms and conditions of our Equity Incentive Plan and must be within specified limits approved by the Compensation Committee. In particular, no authorized delegate may grant options or restricted stock awards to executive officers, including himself or herself, or grant options to any employee to acquire more than an aggregate of 50,000 shares per year or RSUs for an aggregate of more than 20,000 shares per year, without Compensation Committee approval.

        In February 2012, the Compensation Committee adopted Stock Ownership Guidelines providing guidance to executive officers and to non-employee members of the Board as to the minimum number of shares of Company stock each should own. In summary, the guidelines provide that the Chairman and Chief Executive Officer and each non-employee Director should hold an aggregate number of shares (including restricted shares), and options to purchase shares, with a total market value that equals or exceeds three times (in the case of the Chairman and Chief Executive Officer) annual base salary or (in the case of non-employee Directors) each Director's annual cash retainer for Board or committee service, and that each other executive should hold an aggregate number of shares (including restricted shares), and options to purchase shares, with a total market value that equals or exceeds one and one-half times his or her annual base salary. Affected individuals have five years from the date of coverage or change in guideline in which to comply. The Compensation Committee annually reviews the holdings of each affected individual. As of February, 2013, every individual covered by the Stock Ownership Guidelines was in compliance.

Benefits and Perquisites

        We offer a number of benefits to the executive officers pursuant to benefit programs that are also provided to all non-executive officer employees for participation. These benefits programs include for U.S.-based employees the Purchase Plan, vacation, medical, dental and vision insurance, long-term and short-term disability insurance, life and accidental death and dismemberment insurance, health and dependent care flexible spending accounts, wellness programs, educational assistance, employee assistance and certain other benefits.

        We maintain a tax-qualified 401(k) Plan, which provides for broad-based employee participation. The Company provides a discretionary company match for all employee contributions of $0.50 per dollar contributed, up to a maximum match of $4,500 in 2012 and $5,500 in 2013. The Company does

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not provide defined benefit pension plans or defined contribution retirement plans to its executives in the U.S. other than the 401(k) Plan.

Tax Considerations

        Section 162(m) of the Code generally provides that a publicly-held company may not deduct compensation paid to certain of its top executive officers to the extent that such compensation exceeds one million dollars per officer in a calendar year. Compensation that is "performance-based compensation" within the meaning of the Code does not count toward the one-million dollar deduction limit. While the Compensation Committee is mindful of the benefit to us of the full deductibility of compensation, the Committee believes that it should not be constrained by the requirements of Section 162(m) where those requirements would impair flexibility in compensating our executive officers in a manner that can best promote our corporate objectives. We intend to continue to compensate our executive officers in a manner consistent with what we believe are the best interests of the Company and our stockholders, and to the extent consistent with this objective and where practical, to provide executive officer compensation that is deductible under Section 162(m) of the Code.

        We have taken steps, where practical and consistent with our compensation philosophy and objectives, to structure payments to executive officers under the corporate bonus and equity compensation programs to meet the Section 162(m) requirements. Our Compensation Committee retains the discretion to provide compensation that is not deductible to reward performance and/or enhance retention, and has used, and we expect will continue to use, this discretion to award incentive compensation that in some cases does not qualify as "performance-based compensation" within the meaning of the Code.

Total Compensation

        We believe we are fulfilling our compensation objectives and, in particular, rewarding executive officers in a manner that supports our strong pay-for-performance philosophy and strives to maintain fair, reasonable and responsible pay that motivates our executives and aligns their financial interests with those of our stockholders. A substantial portion of executive compensation is tied directly to performance and is structured to ensure that there is an appropriate balance between our long-term and short-term performance. Overall, base pay and total target cash compensation for the executive officers in 2012 were between the 50^th and 90^th percentiles of our peer group. Equity compensation for ongoing executive officer grants is targeted at the 50^th percentile for grants of options and time-vested RSUs. The Compensation Committee set the 50^th percentile as target for equity compensation subject to time-based vesting based on the need to attract, retain and reward management consistent with our peer group median benchmark data. In determining an executive officer's award and where it is positioned relative to the 50^th percentile, the Committee examines market benchmark data focusing on ongoing equity grant values and grant levels as a percent of total outstanding shares. The Company also grants performance-vested RSUs that vest upon the Committee's written certification that the performance goals it had approved were achieved. If the performance goals are not achieved, the performance-vested RSUs are not earned. The Committee has set the market 75^th percentile as the target compensation level for these performance grants and set goals that could substantially enhance stockholder value creation, if achieved. In addition to specific annual grant benchmark data, the Committee also considers where an executive's total equity ownership is positioned relative to the peer group as well as the retention value of an executive's existing equity holdings when determining the appropriate size of ongoing equity awards. The average resulting mix of compensation elements for our named executive officers, excluding Dr. Coles', in 2012 was 20% base salary, 10% target annual bonus opportunity and 70% equity grant value, which is in line with our compensation philosophy.

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2012 Executive Officer Compensation

        In February 2012, our Compensation Committee approved 2012 base salaries and target incentive bonus percentages, stock option grants, and RSU awards to the executive officers. These decisions were based on the executive compensation philosophy principles described earlier in this discussion including our Compensation Committee's assessment of achievement of corporate performance goals during 2011 and individual executive officer performance.

Base Salary

        In February 2012, Dr. Coles presented his recommendations for the executive officers' salaries (except for himself.). The salaries for 2012 represented an average increase of 3.9 percent over 2011 annualized salary levels for the executive officers (excluding Dr. Coles). Dr. Coles proposed increases in salary levels for such executive officers based on their individual performance, their positions relative to the external market and consideration of each executive officer's position and compensation relative to that of other employees. Based on these considerations, the Compensation Committee approved Dr. Coles' recommendations for the executive officers.

        Our Compensation Committee, in consultation with Radford, determines the compensation for the Chairman and Chief Executive Officer. However, prior to 2013, the Compensation Committee made recommendations for the Chief Executive Officer's compensation that had to be approved by our full Board of Directors. The 2012 recommendations made by the Compensation Committee and Radford were based on Dr. Coles' performance, external comparative market data and maintenance of a targeted total cash compensation at the 60^th percentile, resulting in Dr. Coles' 2012 base salary increasing by 5.6% over 2011.

Annual Incentive Bonus Program

        The Compensation Committee affirmed that for 2012, 80% of the target bonus should be linked to corporate performance goals and 20% should be linked to individual performance for executive officers, excluding the Chairman and Chief Executive Officer. For the Chairman and Chief Executive Officer, 100% of the target bonus was linked to corporate performance goals. Target bonuses for non-executive employees were also based on individual responsibility and performance and corporate performance with weightings for each varying by employee level. Generally, employees with greater responsibilities received a higher weighting on corporate performance. Individual performance of executive officers, other than the Chairman and Chief Executive Officer, is determined by the Compensation Committee, with the recommendation of the Chairman and Chief Executive Officer, assessing achievements for the year against the individual's objectives and an assessment of his or her overall performance.

        The corporate performance goals were initially allocated to three categories—financial, product portfolio and organizational—with each component weighted to reflect its significance as determined by the Compensation Committee. The first category consists of financial performance goals for two key financial metrics, each weighted appropriately, related to sales levels and operating expenses. The second and third categories relate to pre-specified key operational metrics for development, commercial launch of Kyprolis and organizational goals.

        Weightings for each of the key metrics within each category were determined and approved by the Compensation Committee as well as the independent members of the Board of Directors. Additionally, the Compensation Committee established a tiered system to measure achievement against the various goals that included a threshold achievement level, a target achievement level and a maximum achievement level for each goal. The Compensation Committee reaffirmed that the Company had to meet a required minimum threshold of 50% of the pre-determined corporate performance goals in order to trigger a payout under the plan. If the required minimum threshold is not achieved, the

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annual bonus pool will not be funded. If the maximum achievement level is met, the annual bonus pool may be funded up to a maximum payout of 150% of the target bonus pool. The Compensation Committee retains the authority to exercise negative discretion to reduce the overall achievement level or amount of payment to any executive officer.

        Corporate performance goals for 2012 were as follows:

        1.     Financial performance goals comprised 30% of the corporate performance goals and included two key financial metrics, each weighted as follows:

•

Kinase inhibitor franchise contribution, 15%



•

Operating expense management (measured on a non-GAAP basis, excluding Nexavar expenses), 15%

        2.     Product portfolio related goals comprised 60% of the corporate performance goals and were based on advancement of the Company's product portfolio in four main areas, as described below:

•

Launch carfilzomib in the U.S. if accelerated approval received, 15%



•

Carfilzomib Clinical Trials



•

Completion of enrollment in ASPIRE study, 5%



•

Enrollment in Phase 3 FOCUS study, 10%



•

Achieve first patient, first visit for Phase 3 multiple myeloma study (carfilzomib vs Velcade), 10%



•

Submit Phase 3 protocol to the U.S. Food and Drug Administration, or "FDA," or the European Medicines Agency, or "EMA," for first line head-to-head study, 5%



•

Release clinical drug supply product from a second source, 5%



•

Select new product formulation in oprozomib (ONX 912) and initiate use in a phase 1b/2 clinical trial, 10%

        3.     Organizational goals comprised 10% of the corporate performance goals, and were based on creation of a strategic workforce plan to attract, develop and retain employee talent for commercial and research and development/technical operations, as measured by year-end staffing levels compared to the 2012 operating plan headcount.

        2012 achievements considered by our Compensation Committee in assessing the level of achievement of each goal were as follows:

•

Contribution from our kinase inhibitor franchise was $177 million, comprised of Nexavar brand contribution of $168 million and Stivarga royalties of $8 million. Nexavar brand contribution is calculated consistent with the corporate goal evaluation methodology as Nexavar revenue from our collaboration minus Nexavar development expenses and Company un-reimbursed Nexavar expenses, on a foreign exchange neutral basis.



•

Operating expenses, on a non-GAAP basis and excluding Nexavar operating expense, were $404 million. Non-GAAP operating expenses excluded contingent consideration expense, employee stock-based compensation expense and amortization of certain acquired intangibles.



•

Kyprolis (carfilzomib) was launched within six days following its accelerated approval in the United States, including product availability at the distributors within four days and the start of detailing within six days.



•

ASPIRE study enrollment was completed February 21, 2012.

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•

FOCUS study enrollment was 100% completed September 27, 2012.



•

ENDEAVOR Relapsed Multiple Myeloma trial (carfilzomib vs Velcade head-to-head) was initiated June 21, 2012.



•

The First Line head-to-head Phase 3 trial of carfilzomib was submitted to the FDA on August 13, 2012.



•

Clinical drug product was released from a new production line at our existing third party manufacturer, DSM facility in North Carolina on August 3, 2012.



•

A new formulation for oprozomib was introduced into the clinic with the first patient dosed on November 5, 2012.



•

Our number of full-time equivalent employees for our combined Commercial and Research and Development organizations was 502 as of December 31, 2012, which was 99.6% of our target operating plan headcount.

        In February 2013, our Compensation Committee met to review and certify the results of each corporate performance goal to determine the corporate performance factor at which bonuses would be calculated under the annual incentive bonus program for 2012. Based on the achievement level established for each metric under the financial component of the corporate performance goals, the Compensation Committee determined that our actual performance was met at the maximum level for one of the metrics and at trigger level for the other. We achieved maximum performance for six of the seven product portfolio metrics, and target performance for the seventh. We achieved maximum performance for the organizational metric.

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        Based on the strength of our performance against the 2012 objectives, the Compensation Committee certified corporate performance at the 130% level based on the performance detailed below:

        Based on the Committee's determination that corporate performance for the year, as measured against target achievement levels, was 130%, the target bonus linked to corporate performance goals was paid out at 130%. For the Chairman and Chief Executive Officer, 100% of target bonus was linked to corporate performance goals, and therefore Dr. Coles' target bonus was paid out at the 130% level. For the other executive officers, subject to meeting their individual performance criteria, 80% of the target bonus linked to corporate performance goals was paid out at 130%, and the 20% of the target bonus linked to individual performance was paid out at between 0% and 150%, depending on each executive officer's level of achievement. Assessment of individual performance was based on an evaluation of achievements for the year and an assessment of overall performance, as recommended by the Chairman and Chief Executive Officer, and approved by the Compensation Committee.

        The Chairman and Chief Executive Officer made recommendations regarding the executive officers' individual performance to the Compensation Committee, and in determining the actual level of achievement, as with any personnel evaluation, applied judgment and discretion and carefully weighed individual achievements in a range of categories. In his assessment, Dr. Coles evaluated each executive officer's specific accomplishments against their established objectives and assessed their overall performance.

        For Mr. Fust, our Executive Vice President and Chief Financial Officer, key contributions in 2012 included the following: designed and implemented a business continuity plan; developed and

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implemented capital budgeting and approval processes; expanded outward facing activities with investors and industry groups; improved expense forecasting; hired key employees in finance and information technology; ensured systems, processes and policies were in place to support the U.S. launch of Kyprolis; established key information technology infrastructure; implemented procurement and legal department workflows; and advanced programming and construction of our new campus building. Based on these achievements, and his overall assessment of Mr. Fust's performance, Dr. Coles recommended an individual performance factor of 140% for Mr. Fust.

        For Dr. Lasowski, our Executive Vice President, Corporate Development and Strategy, key contributions included the following: evaluated strategic business opportunities for the Company and demonstrated effective leadership in managing his function. Based on these achievements, and his overall assessment of Dr. Lasowski's performance, Dr. Coles recommended an individual performance factor of 120% for Dr. Lasowski.

        For Ms. Shema, our Executive Vice President, General Counsel and Corporate Secretary, key contributions included the following: completed key hires within the legal and compliance departments; implemented contract management process; launched expense management system; completed company-wide enterprise risk management reviews and plans; reviewed, prioritized and modified company policies for international operations; provided transactional legal support; and identified and created strategies to resolve disputes as needed. Based on these achievements, and his overall assessment of Ms. Shema's performance, Dr. Coles recommended an individual performance factor of 100% for Ms. Shema.

        Mr. Osborn, our former Senior Vice President, Global Corporate Affairs, did not meet all components of his 2012 objectives and he received an individual performance factor of 0%.

        Dr. Coles presented his assessment and recommendation for individual performance factor scores for each executive officer to the Compensation Committee, based on each executive officer's achievements for 2012. Based on an independent evaluation of each of the executive officer's individual achievements compared to his or her objectives and taking into consideration Dr. Coles' assessments and recommendations for each executive officer, the Compensation Committee determined and approved individual performance factor scores for each of the executive officers, concluding that, except in the case of Mr. Osborn, individuals' accomplishments substantially met or exceeded the expectations. Accordingly, the Compensation Committee approved individual performance factors for Mr. Fust, Dr. Lasowski, Ms. Shema and Mr. Osborn of 140%, 120%, 100% and 0%, respectively. As Mr. Osborn did not achieve his individual objectives, he was not eligible to receive a bonus based on achievement of the corporate objectives.

        The following chart summarizes the total bonus payment and the corporate and individual performance weightings used to calculate the total bonus payment to each named executive officer for performance during fiscal year 2012:

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Executive Equity Compensation

        Each year the Compensation Committee reviews and discusses the Company's equity compensation program, including a comparison against companies in our peer group and the Company's philosophy with regard to granting a mix of stock options and RSUs. The 2012 target mix of stock options to time-vested RSUs for executive officers as part of their annual award was 70% stock options and 30% RSUs. The Compensation Committee set the 50^th percentile as target for equity compensation subject to time-based vesting, based on the need to attract, retain and reward management consistent with our peer group median benchmark data. Annual performance-based equity compensation for ongoing executive officer grants is targeted to achieve the 75^th percentile of Radford benchmark data, and on average comprises 34% of the total equity (including new hire and promotional grants) awarded to executives in 2012, assuming full achievement of the performance objectives. The target mix of annual award equity value including performance-based equity compensation was approximately 40% stock options, 20% RSUs subject to time-based vesting and 40% RSUs subject to performance-based vesting.

        In determining an executive officer's award and where it is positioned, the Committee examines market benchmark data focusing on ongoing equity grant values, as well as grant levels as a percent of total outstanding shares. In addition to specific annual grant benchmark data, the Committee also considers the executive's performance, where the executive's total equity ownership is positioned relative to those of his or her peers, and the retentive value of an executive's existing equity holdings when determining the appropriate size of ongoing equity awards.

        In 2011 and 2012, the Board of Directors and the Compensation Committee approved grants of restricted shares or RSUs that will vest only upon the attainment of specific performance objectives. These additional grants were intended to motivate and reward specific longer term strategic and stockholder value creation results over and above the ordinary annual corporate performance objectives. These awards were calculated such that the combined value of all equity grants, including those subject to both performance-based and time-based vesting (other than new-hire or promotion grants) to recipients would position their aggregate individual equity compensation targets at approximately the 75^th percentile of market equity compensation, if all performance shares were to vest, i.e., if all of the performance criteria were met at the maximum level. In 2011, these awards were made only to executive officers, and in 2012, these awards were made to all vice-president level employees and above, including the named executive officers. The Compensation Committee anticipates that in 2013 it will similarly make awards of RSUs subject to performance-based vesting to all vice-president level employees and above, including the named executive officers.

        The RSUs subject to performance-based vesting that were awarded in 2012 will vest if certain strategic initiatives are completed within specified timeframes. We are not disclosing the exact nature of the goals or deadlines established for these awards, because we believe that their disclosure might allow our competitors to predict certain business strategies and would cause us competitive harm. The Compensation Committee believes it established target deadlines that were achievable with an appropriate amount of dedication and hard work. However, our Compensation Committee believes that at the time the objectives were set, there would be a substantial degree of difficulty in achieving the objectives at the target level and a much greater degree of difficulty in achieving them at the stretch level. The RSUs subject to performance-based vesting that were awarded in 2011 vested based on the date of U.S. marketing approval for carfilzomib. One hundred percent of these RSUs would have vested had carfilzomib received marketing approval on or before April 1, 2012, 50% if achieved on or before October 1, 2012 and 25% if achieved on or before December 31, 2013. As carfilzomib received accelerated U.S. marketing approval in July 2012, 50% of these RSU's vested and the remaining 50% of the shares subject to these RSUs were forfeited.

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Executive Officer Hires

John Osborn, J.D., M.I.P.P., Former Senior Vice President, Global Corporate Affairs

        On June 1, 2012, Mr. Osborn was appointed Senior Vice President, Global Corporate Affairs. Under the terms of an at-will employment agreement, Mr. Osborn received an initial base salary of $430,000 per year and was eligible to receive an annual cash bonus targeted at 45% of his base salary, dependent on achievement of corporate objectives and his individual objectives, as determined by the Compensation Committee. Mr. Osborn was eligible to receive up to $300,000 for relocation expenses, housing assistance in the total amount of up to $108,000, a sign-on bonus of $138,000, an option to purchase 87,360 shares of common stock, and 11,000 performance-vested RSUs. The option grant would have vested and become exercisable over four years with 25% of the shares vesting and becoming exercisable on the first-year anniversary of the grant date and the remaining 75% vesting and becoming exercisable in 36 equal monthly installments thereafter. The RSUs would have vested only upon certification by the Compensation Committee that performance criteria, based on the achievement of certain strategic initiatives by the Company, have been achieved. Neither the option nor the RSU award had vested prior to Mr. Osborn's separation from the Company in March 2013. Mr. Osborn's compensation package was intended to be consistent with our total compensation philosophy while taking into consideration his individual attributes and breadth of experience.

Executive Officer Departures

Ted W. Love, M.D., Former Executive Vice President, Research & Development and Technical Operations

        On February 14, 2012, Dr. Love announced his intention to retire as of August 1, 2012. Based on a Transition and Retirement Agreement between Dr. Love and the Company, and in consideration for a release of claims executed by Dr. Love, he received (a) a lump-sum severance payment of twelve months' salary; (b) continued vesting of his equity awards during the period in which he served as a consultant to the Company, and exercisability of vested awards for six months thereafter; (c) up to twelve months' continuation of health benefits through COBRA, at the Company's expense; and (d) reimbursement of expenses.

John Osborn, J.D., M.I.P.P., Former Senior Vice President, Global Corporate Affairs

        Mr. Osborn separated from the Company effective March 12, 2013. In connection with his separation, Mr. Osborn and the Company entered into a Separation Agreement pursuant to which, and in consideration for a release of claims executed by Mr. Osborn, he will receive (a) a lump-sum severance payment of six months salary; (b) up to six months continuation of health benefits through COBRA, at the Company's expense; (c) waiver by the Company of its right to repayment of Mr. Osborn's sign-on bonus and relocation allowance, and (e) reimbursement of outplacement assistance expenses up to $35,000.

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Executive Compensation Summary

        The following table summarizes our approved 2012 salaries, annual incentive target bonus percentages and equity awards for our named executive officers, except for Dr. Love:

2013 Executive Officer Compensation

        In February 2013, our Compensation Committee and our Board approved 2013 base salaries, stock option grants and RSU awards to the executive officers. Salary increases were made effective as of March 1, 2013. The Compensation Committee also approved the 2013 annual incentive target bonus percentages. These decisions were based on the executive compensation philosophy principles described earlier in this discussion, including our Compensation Committee's assessment of achievement of corporate performance goals during 2012.

Executive Compensation Summary

        The following table summarizes approved 2013 salaries, targeted annual incentive bonuses and equity awards for our named executive officers as of March 28, 2013.

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REPORT OF THE COMPENSATION COMMITTEE(1)

        The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis ("CD&A") contained in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this Proxy Statement and incorporated into our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Paul Goddard, Ph.D., Chair
Wendell Wierenga, Ph.D.
Thomas G. Wiggans

(1)

This Section is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of the Company under the 1933 Act or the 1934 Act, other than the Company's Annual Report on Form 10-K, whether made before or after the date hereof and irrespective of any general incorporation language in that filing.

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EXECUTIVE COMPENSATION

Summary Compensation Table

        The following table shows compensation information for the fiscal years ended December 31, 2012, 2011 and 2010 for the named executive officers.