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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1040 Spring Street
Silver Spring, MD 20910

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

        The annual meeting of shareholders of United Therapeutics Corporation will be held at our headquarters, 1040 Spring Street, Silver Spring, Maryland 20910, on Wednesday, June 29, 2011, at 9:00 a.m. local time for the following purposes:

1.

Election of the following four Class III directors nominated by our Board of Directors to serve three-year terms until the 2014 annual meeting of shareholders or until their successors are duly elected and qualified or until their office is otherwise vacated: Raymond Dwek, Roger Jeffs, Christopher Patusky and Tommy Thompson;



2.

Approval of an advisory resolution on executive compensation;



3.

An advisory vote on the frequency of future advisory votes on executive compensation;



4.

Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2011; and



5.

To consider and act upon such other business as may properly come before the annual meeting of shareholders and any adjournment or postponement thereof.

        Only shareholders as of April 30, 2011, are entitled to notice of, and to vote at, our 2011 annual meeting of shareholders.

        Important Notice Regarding the Availability of Proxy Materials for United Therapeutics Corporation's 2011 Annual Meeting of Shareholders to Be Held on Wednesday, June 29, 2011:

United Therapeutics Corporation's Proxy Statement, Annual Report, Form 10-K and
other proxy materials are available at: http://ir.unither.com/annualProxy.cfm.

        WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE REQUESTED TO FILL IN, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.

        ALL SHAREHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THIS MEETING.

By Order of the Board of Directors,



Paul A. Mahon
Corporate Secretary

May 2, 2011
Silver Spring, Maryland

NOTICE: Rules that govern how brokers vote your shares have recently changed, such that brokers are no longer permitted to vote on the election of directors, the advisory resolution on executive compensation or the advisory vote on the frequency of future advisory votes on executive compensation without instructions from the beneficial owner, as discussed in more detail in the accompanying Proxy Statement. Therefore, if your shares are held through a brokerage firm, bank or other nominee, they will not be voted on these matters unless you affirmatively vote your shares in one of the ways described in the accompanying Proxy Statement.

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UNITED THERAPEUTICS CORPORATION
1040 Spring Street
Silver Spring, MD 20910

PROXY STATEMENT FOR THE 2011 ANNUAL MEETING OF SHAREHOLDERS

INFORMATION ABOUT THE MEETING, VOTING AND PROXIES

General

        This Proxy Statement and enclosed proxy card are being furnished on or about May 9, 2011, to shareholders of United Therapeutics Corporation in connection with the solicitation by our Board of Directors of proxies to be voted at our 2011 annual meeting of shareholders (Annual Meeting) and any adjournment or postponement thereof. Our Annual Meeting will be held on Wednesday, June 29, 2011, beginning at 9:00 a.m. local time at our corporate headquarters, 1040 Spring Street, Silver Spring, Maryland 20910.

Record Date and Outstanding Shares

        On April 30, 2011 (the Record Date), there were 58,075,516 shares of our common stock outstanding and entitled to vote at our Annual Meeting. Only shareholders of record on the Record Date will be entitled to vote, either in person or by proxy, at our Annual Meeting, and each share will have one vote for each director nominee and one vote for each other matter to be voted on.

Solicitation

        We will bear the cost of soliciting proxies. Our officers and employees may solicit proxies in person or by telephone, fax, email or regular mail, and they will receive no additional compensation for such work. Copies of solicitation materials may be furnished to brokers, custodians, nominees and other fiduciaries for forwarding to beneficial owners of shares of our common stock, and normal handling charges may be paid for such forwarding service.

Voting Rights and Quorum

        Shares can be voted at our Annual Meeting only by shareholders who are present in person or represented by proxy. Whether or not a shareholder plans to attend our Annual Meeting in person, he or she is encouraged to sign and return the enclosed proxy card. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is exercised by delivering to the Corporate Secretary of United Therapeutics Corporation at 1040 Spring Street, Silver Spring, Maryland 20910, a written notice of revocation or a fully executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. The representation in person or by proxy of at least a majority of the outstanding shares entitled to vote is necessary to achieve a quorum for the transaction of business at the Annual Meeting.

        Abstentions, "broker non-votes" (i.e., shares held by brokers or nominees that are represented at the meeting but with respect to which they have no discretionary power to vote on a particular matter and have received no instructions from the beneficial owners thereof or persons entitled to vote thereon) and proxies that are marked "withhold authority" with respect to the election of any one or more nominees for election as directors will be counted as present in determining whether the quorum requirement is satisfied.

        Your broker, bank, trust or other nominee has the discretion to vote on routine corporate matters (including the ratification of the appointment of the independent registered public accounting firm) presented in the proxy materials without your specific voting instructions. Your broker, bank, trust or

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other nominee does not have the discretion to vote on non-routine matters (including the election of directors, the advisory resolution on executive compensation and the advisory vote on the frequency of future advisory votes on executive compensation). For non-routine matters, your shares will not be voted without your specific voting instructions.

Proxy

        If the enclosed proxy card is properly executed and returned prior to the Annual Meeting, the shares represented by the proxy card will be voted in accordance with the shareholder's directions. If the proxy card is signed and returned without any direction given, shares of our common stock represented by the proxy will be voted in accordance with the Board's recommendations as follows: (i) FOR the election of each of the four director nominees named on the proxy card, (ii) FOR the approval of the advisory resolution on executive compensation, (iii) to conduct future advisory votes on executive compensation every ONE YEAR, and (iv) FOR ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2011.

        Each of our director nominees has consented to be named herein and to continue to serve on our Board of Directors, if elected. It is not anticipated that any nominee will become unable or unwilling to accept his or her nomination or election. If such an event should occur, the persons named in the proxy intend to vote for the election of, in such nominee's stead, such other person as is recommended to our Board of Directors by our Board of Directors' Nominating and Governance Committee. In the alternative, the persons named in the proxy may simply vote for the remaining nominees, leaving a vacancy that may be filled at a later date by our Board of Directors, or our Board of Directors may reduce the size of the Board.

Voting Requirements

Election of Directors

        Directors are elected by a plurality of the affirmative votes cast at our Annual Meeting. A "plurality" voting standard means that the four nominees who receive the largest number of votes cast will be elected as directors. Broker non-votes and shares as to which a shareholder withholds voting authority are not considered votes cast and therefore have no impact on the election of directors. Cumulative voting is not permitted in the election of directors. Proxies may not be voted for more than four nominees.

All Other Proposals to Be Voted On

        The affirmative vote of the holders of a majority of the shares of common stock present, in person or by proxy, and entitled to vote at our Annual Meeting is required for approval of each of the other proposals to be voted on at the meeting. Abstentions have the same effect as an "against" vote. Broker non-votes, if any, have no impact on the vote.

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PROPOSAL NO. 1
ELECTION OF DIRECTORS

        Our Board of Directors (Board) consists of ten members and is divided into three classes of three or four members each. At each annual meeting of shareholders, members of one of the classes, on a rotating basis, are elected to a three-year term. This year at our Annual Meeting, Raymond Dwek, Roger Jeffs, Christopher Patusky and Tommy Thompson are nominees for election as Class III directors to serve three-year terms until our 2014 annual meeting of shareholders or until their successors are duly elected and qualified or their office is otherwise vacated.

        We believe that our directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the best interests of our shareholders. We also endeavor to have a board of directors that, as a whole, represents a range of experiences in business, government, education and technology and in other areas that are relevant to our business activities. In addition, our Board believes there are certain attributes every director should possess, which are set forth in the Director Nominations and Diversity section below.

        In evaluating incumbent directors for re-nomination to our Board, the members of our Nominating and Governance Committee consider a variety of factors. These include each director's independence, financial literacy, personal and professional accomplishments, tenure on our Board and experience in light of our business goals. The following presents information concerning persons nominated for election as directors at our Annual Meeting and for those of our directors whose terms of office will continue after our Annual Meeting, including their membership on committees of our Board, principal occupations or affiliations during the last five years or more, director qualifications, and certain other directorships held. For additional information concerning the director nominees, including stock ownership and compensation, see the section entitled Non-Employee Director Compensation and the Beneficial Ownership of Common Stock table below.

Nominees for Election at our 2011 Annual Meeting of Shareholders

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OUR BOARD OF DIRECTORS RECOMMENDS THAT OUR SHAREHOLDERS VOTE "FOR"
THE ELECTION OF EACH OF THE NOMINEES AS CLASS III DIRECTORS.

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BOARD OF DIRECTORS, COMMITTEES, CORPORATE GOVERNANCE

Class I Directors Continuing in Office with Terms Ending in 2012

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Class II Directors Continuing in Office with Terms Ending in 2013

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The Role of our Board: Risk Oversight

        Our Board is responsible for overseeing the risks facing our company. Our Board works directly with our executive officers and other members of our senior management in carrying out its risk oversight function. Our directors take a proactive, interested and detailed approach to their service on our Board, and set expectations to promote our success through the achievement of business objectives while maintaining high standards of responsibility and ethics. At its regularly scheduled meetings our Board receives reports from our Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel, and may also receive reports from the Committee Chairmen, outside consultants and other members of senior management, among others. These presentations often include identification and assessment of risks our company currently faces or may face in the future. Our Board is able to ask questions, discuss and provide guidance to management on the risks presented, as well as any risks that our Board identifies. Our senior management is responsible for assessing risk on a daily basis. Our Board expects that our senior management continually identifies, assesses and manages the short-term and long-term risks faced by our company. If members of our senior management identify risks that are material to our company, our Board may convene a special meeting to discuss, assess and address such risks.

        Our Board implements its risk oversight function both as a whole and through delegation to various committees. These committees meet regularly and report back to the full Board. Our Compensation Committee's duties include overseeing an assessment of the incentives and risks arising from or related to our compensation policies and practices, including but not limited to those applicable to executive officers, and to evaluate whether those incentives and risks are appropriate. Our Audit Committee's responsibilities include general oversight of our company's practices with respect to risk assessment and risk management.

        In April 2011, the Compensation Committee reviewed a risk assessment conducted by management and the Compensation Committee's independent compensation consultant, Compensia, Inc., to determine whether the design of our employee compensation programs and the amounts and components of employee compensation might create incentives for excessive risk-taking by our employees. The Compensation Committee believes that our compensation programs encourage employees, including our executives, to remain focused on a balance of the short- and long-term operational and financial goals of our company, and thereby reduce the potential for actions that involve an excessive level of risk. See the section entitled Compensation Discussion and Analysis—Executive Summary—Summary of Compensation Governance Policies for information regarding certain risk-mitigating features of our compensation program.

Board of Directors Leadership

        Our Chief Executive Officer, who founded our company, serves as Chairman of our Board. Our Board believes that the combined role of Chairman and Chief Executive Officer currently is an appropriate leadership structure for our company. In this regard, having a combined Chairman and Chief Executive Officer provides an efficient and effective leadership model for a growing entrepreneurial company like ours, as it fosters clear accountability, effective decision-making, and alignment on corporate strategy. In addition, because our Board works closely with our executive officers and members of senior management, there is a natural synergy in the combined Chairman and Chief Executive Officer role that facilitates our Board's guidance of management.

        The independent directors on our Board have designated a Lead Independent Director. Among other responsibilities, our Lead Independent Director coordinates the activities of our other independent directors, approves Board meeting schedules, agendas and information sent to our Board, chairs all meetings of the Board at which the Chairman is not present, including executive sessions of our independent directors, and serves as principal liaison between our independent directors and our

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Chairman and senior management. The Lead Independent Director also has the authority to call meetings of the independent directors and is available for consultation and communication with major shareholders, if requested. A more detailed description of the Lead Independent Director is included in our Corporate Governance Guidelines, which are available on our website at http://ir.unither.com/governance.cfm.

Director Nominations and Diversity

        The Nominating and Governance Committee of our Board does not have a formal policy with respect to considering director candidates or director diversity. Once the Nominating and Governance Committee identifies a potential director nominee, it screens the candidate, performs reference checks and conducts interviews with the help of our General Counsel. If the outcome of that process is favorable, the Nominating and Governance Committee may recommend the candidate to our Board for nomination.

        The Nominating and Governance Committee considers candidates recommended by shareholders and evaluates them using the same criteria as it uses to evaluate all other candidates. The Nominating and Governance Committee seeks to recommend director candidates who will enhance the quality of our Board's deliberations and decisions, who will take their duties seriously and who will promote the values and ethics to which we subscribe.

        A shareholder who wishes to suggest a prospective nominee for the Nominating and Governance Committee's consideration should submit the candidate's name and qualifications to our Corporate Secretary at the address set forth under Shareholder Communications with Directors below.

Minimum Criteria for Director Candidates

        To be considered by the Nominating and Governance Committee, a director candidate must meet the following minimum criteria:

•

Personal and professional integrity;



•

A record of exceptional ability and judgment;



•

Ability and willingness to participate fully and work constructively in Board activities, including active participation in meetings of our Board and its committees;



•

Interest, capacity and willingness, in conjunction with the other members of our Board, to serve the interests of our shareholders;



•

Reasonable knowledge of the fields of our operations, as well as familiarity with the principles of corporate governance;



•

Expertise to serve on one or more committees of our Board; and



•

Absence of any personal or professional relationships that would adversely affect his or her ability to serve our best interests and those of our shareholders.

Additional Qualities and Skills for Director Candidates

        In addition, the Nominating and Governance Committee is interested in candidates who possess the following skills:

•

The ability to contribute to the variety of opinions, perspectives, personal and professional experiences and backgrounds, as well as other characteristics that differ among members of our Board;

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A desire to contribute positively to the existing tone and collaborative culture among our Board members; and



•

Professional and personal experiences and expertise relevant to achievement of our strategic objectives.

        The Nominating and Governance Committee's evaluation of director nominees takes into account their ability to contribute these qualities and skills to the Board, and the Nominating and Governance Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.

Director Independence

        Our Board has determined that: (i) Christopher Causey, Richard Giltner, R. Paul Gray, Christopher Patusky, Louis Sullivan and Tommy Thompson are independent in accordance with the NASDAQ listing standards; (ii) Roger Jeffs and Martine Rothblatt are not independent, due to Dr. Jeffs' employment as our President and Chief Operating Officer and Dr. Rothblatt's employment as our Chief Executive Officer; (iii) Ray Kurzweil is not independent due to certain payments received in connection with the technical services agreements described in the section entitled Certain Relationships and Related Transactions below; and (iv) R. Paul Gray, Christopher Patusky and Richard Giltner meet the heightened independence standards for audit committee members set forth in rules promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).

        In the past, Professor Dwek has been regarded as one of our independent directors. Our Board has determined not to designate Professor Dwek as independent under the NASDAQ listing standards, after considering the transactions between United Therapeutics and the University of Oxford described in the section entitled Certain Relationships and Related Transactions below. Our Board still finds that Professor Dwek brings significant and valuable independent insight to the Board, and does not believe that our relationship with Oxford University falls within any of the categorical prohibitions against a finding of independence under the NASDAQ listing standards. However, in an abundance of caution and in light of the continuing and increasing extent of our relationship with Oxford, the Board no longer designates him as an "independent director" within the meaning of the NASDAQ listing standards. In determining that Governor Thompson is independent, the Nominating and Governance Committee considered the fact that he is a partner with the law firm Akin Gump Strauss Hauer & Feld LLP, which represented the Company until 2005 (five years before Mr. Thompson joined our Board).

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Committees of our Board of Directors

        Our Board has established four committees: an Audit Committee, a Compensation Committee, a Nominating and Governance Committee and a Scientific Committee. The current composition of each committee is as follows:

*

Non-Independent

**

Lead Independent Director

***

Management

Audit Committee

        The Audit Committee's responsibilities include:

•

Representing and assisting our Board in its oversight responsibilities regarding our accounting and financial reporting processes, the audits of our financial statements, including the integrity of our financial statements, and the qualifications and independence of Ernst & Young, LLP, our independent registered public accounting firm;



•

Retaining and terminating our independent auditors;



•

Approving in advance all audit and non-audit services to be performed by our independent auditors; and



•

Approving related party transactions (as defined under the rules of the Securities and Exchange Commission (SEC)).

        For additional information regarding the processes and procedures used by the Audit Committee, see the section entitled Report of the Audit Committee below.

        The Audit Committee's duties are fully outlined in its charter.

Compensation Committee

        The Compensation Committee oversees our compensation plans and policies, reviews and approves compensation for our executive officers and administers our equity incentive and share tracking awards

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plans, including reviewing and approving grants of stock options and share tracking awards to our executive officers and employees. The Compensation Committee's responsibilities include:

•

Creating a system for awarding long-term and short-term performance-oriented incentive compensation to attract and retain senior management, and reviewing our compensation plans to confirm that they are appropriate, competitive and properly reflect our goals and objectives; and



•

Assisting our Board in discharging its responsibilities regarding compensation of our executive officers.

        The Compensation Committee's charter provides that it may delegate responsibilities to subcommittees if it determines such a delegation would be in the best interest of the company. For additional information regarding the processes and procedures used by the Compensation Committee, see the section entitled Executive Pay Decisions and Process in the Compensation Discussion & Analysis below.

        The Compensation Committee's duties are fully outlined in its charter.

Independent Compensation Consultant

        The Compensation Committee has the authority to engage advisors to assist it in carrying out its responsibilities. In accordance with this authority, the Compensation Committee directly engaged Compensia, Inc. (Compensia) as its compensation consultant to advise it on our executive and non-employee director compensation practices and policies. Compensia served in this capacity from 2004 until early 2011, when the Company hired its principal consultant at Compensia to serve as the Company's Executive Vice President of Organizational Development. The Committee is actively seeking a new independent compensation consultant to perform the services previously provided by Compensia. The Compensation Committee, in its discretion, may replace its independent compensation consultant or hire additional consultants at any time. We have determined that Compensia was independent in 2010 because it did not provide any services to us other than providing advice with respect to executive and director compensation and received compensation only for services it provided to or on behalf of the Compensation Committee.

        The Compensation Committee engaged Compensia to review and advise it on all principal aspects of executive and non-employee director compensation. This included base salaries, cash incentive bonus awards, and long-term incentive bonus awards for our executive officers, and cash compensation and long-term incentive awards for non-employee directors. Tasks Compensia performed for the Compensation Committee in 2010 included:

•

Reviewing and advising on the structure of our compensation arrangements (i.e., base salary levels, cash incentive bonus award target levels and the size of long-term incentive bonus award targets) for our Chief Executive Officer and our other executive officers;



•

Providing recommendations regarding the composition of our peer groups;



•

Gathering and analyzing publicly available proxy data for our peer groups and survey data relating to executive compensation;



•

Conducting pay and performance analyses relative to our peer groups;



•

Updating the Compensation Committee on industry trends and best practices with respect to executive long-term incentive compensation program design, including types of long-term incentive compensation awards, size of long-term incentive compensation grants, and aggregate long-term incentive compensation grant usage;



•

Evaluating the United Therapeutics Corporation Share Tracking Awards Plan against industry norms and our design/cost targets;

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Assisting with the drafting of the Compensation Discussion and Analysis for our Proxy Statement; and



•

Working on special or ad-hoc projects for, or at the request of, the Compensation Committee as they arose.

        In the course of fulfilling these responsibilities, Compensia regularly communicated with the Compensation Committee Chairman outside of and prior to most Compensation Committee meetings. The Compensation Committee may invite its independent compensation consultant to attend its meetings. In 2010, Compensia attended four of the Compensation Committee's five meetings.

        While the Compensation Committee considered Compensia's recommendations in 2010, the Compensation Committee's decisions, including the specific amounts paid to our executive officers and directors, were its own and may reflect factors and considerations other than the information and recommendations provided by Compensia.

Nominating and Governance Committee

        In addition to the responsibilities described in the section entitled Director Nominations and Diversity above, the Nominating and Governance Committee's responsibilities include:

•

Proposing nominees for election to our Board;



•

Proposing nominees to fill vacancies and newly created directorships;



•

Reviewing candidates for election to our Board recommended to us by our shareholders;



•

Recommending committee membership and chairmen;



•

Reviewing management succession plans;



•

Developing, evaluating, recommending to our Board and monitoring all matters with respect to corporate governance; and



•

Monitoring our compliance with legal and regulatory obligations.

        The Nominating and Governance Committee's duties are fully outlined in its charter.

Scientific Committee

        The Scientific Committee's responsibilities include:

•

Providing strategic advice and making recommendations to our Board and management regarding our current and planned research and development programs;



•

Advising our Board and management on the scientific merit of technology or products involved in licensing and acquisition opportunities; and



•

Reviewing new developments, technologies, and trends in biopharmaceutical research and development.

        Scientific Committee members with appropriate scientific expertise also serve as members of our Scientific Advisory Board and act as the Board's liaisons to our Scientific Advisory Board. Our Scientific Advisory Board is composed of scientists and physicians who meet periodically to discuss and evaluate potential opportunities for our company and guide our scientists as they work to develop improved versions of our existing products. From time to time, our Chairman and Chief Executive Officer will ask Scientific Committee members to review technological developments that are strategically important or promising to our company.

        The Scientific Committee's duties are fully outlined in its charter.

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Corporate Governance Guidelines and Committee Charters

        At the recommendation of the Nominating and Governance Committee, the Board has adopted Corporate Governance Guidelines as a framework for the governance of our company. Our Corporate Governance Guidelines, along with the charter for each Board committee, is available electronically in the "Corporate Governance" section of the "Investor Relations" page of our website located at http://ir.unither.com/governance.cfm, or by writing to us at United Therapeutics Corporation, Attention: Corporate Secretary, 1040 Spring Street, Silver Spring, Maryland 20910, or by sending an e-mail to corporatesecretary@unither.com.

Stock Ownership Guidelines

        In April 2011, on the joint recommendation of the Compensation Committee and the Nominating and Governance Committee, the Board adopted Stock Ownership Guidelines applicable to our directors and Named Executive Officers. Our Board adopted Stock Ownership Guidelines to further align the financial interests of our Named Executive Officers and directors with those of our shareholders, to foster a long-term management orientation, and to promote sound corporate governance. For non-employee members of our Board, our Stock Ownership Guidelines provide an ownership target equal to the lesser of 5,000 shares or five times the annual board retainer. Ownership targets for our Named Executive Officers (including those serving on the Board) are described below under Compensation Discussion and Analysis—Stock Ownership Guidelines.

        In determining ownership levels for each director under our Stock Ownership Guidelines, credit is provided for shares held outright, as well as the number of vested, but unexercised, stock options and STAP awards. For purposes of vested, unexercised stock option and STAP awards, shares will be calculated on an "as if exercised" basis, assuming a cashless exercise and net of taxes (using an assumed 35% tax rate). The policy provides procedures for granting exemptions in the case of severe financial hardship.

Meetings of our Board of Directors

        Our full Board held six meetings during 2010. In addition, during 2010, the Audit Committee held seven meetings, the Compensation Committee held five meetings, and the Nominating and Governance Committee held two meetings. Each of our directors attended more than 75% of the total number of meetings of our Board and the committees on which he or she served during 2010. In accordance with applicable NASDAQ listing standards, the independent members of our Board met without management present four times during 2010. Although attendance is not mandatory, our Board encourages all of its members to attend the annual meeting of shareholders. Eight directors, constituting all but two members of our Board, attended our 2010 annual meeting of shareholders.

Shareholder Communication with Directors

        Shareholders are encouraged to address any director communications to our Corporate Secretary by overnight or certified mail, signature acceptance or return receipt required, at: United Therapeutics Corporation, Attention: Corporate Secretary, 1040 Spring Street, Silver Spring, Maryland 20910. Our Corporate Secretary has the authority to disregard or take other reasonable action with respect to any inappropriate shareholder communications. After confirming the stock ownership of the author of the communication, our Corporate Secretary will review the appropriateness of a shareholder communication based on the relevance of the communication to Board decisions. If deemed an appropriate communication, our Corporate Secretary will submit the shareholder communication to our Lead Independent Director. Shareholders will receive a written acknowledgement from our Corporate Secretary upon receipt of such written communication.

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DIRECTOR COMPENSATION

        Our non-employee directors are eligible to receive stock options under the 1997 United Therapeutics Amended and Restated Equity Incentive Plan (EIP) and awards under the 2008 United Therapeutics Corporation Share Tracking Awards Plan and the 2011 United Therapeutics Corporation Share Tracking Awards Plan (together, the STAP). Non-employee directors' initial and annual stock option and STAP awards are granted with an exercise price equal to the closing price of our common stock as reported on the NASDAQ Global Select Market (NASDAQ) on the date of grant, or on the preceding trading day if the award is granted on a date when the NASDAQ is not open. Initial grants of stock options or STAP awards, consisting of the initial membership award and a pro-rated amount of the annual award for the remainder of the then-current term, are made on the date of a director's appointment or election to our Board, or on the preceding trading day if the award is granted on a date when the NASDAQ is not open. Annual awards of stock options or STAP awards are made on the date of the first meeting of our Board following our annual meeting of shareholders in the year of grant. Awards of stock options and STAP awards to our non-employee directors become fully vested on the one-year anniversary of the grant date only if the director attends at least 75% of the regularly scheduled meetings of our Board and his or her committee meetings from the date of grant until the date of our next annual meeting of shareholders.

        The following table describes our current compensation practices for non-employee directors. Employee directors do not receive any compensation for service on our Board in addition to their regular compensation as employees.

        Directors may also be compensated for special assignments from our Board. In 2010, Louis Sullivan and Raymond Dwek received compensation for serving as members of our Scientific Advisory Board in their capacity as Board liaisons. The compensation received is reported in the Director Compensation table below. Effective April 1, 2010, the members of the Scientific Advisory Board who also are members of our Board of Directors no longer receive fees for their service on the Scientific Advisory Board. As such, compensation paid to Dr. Sullivan and Professor Dwek for liaison-related

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service on the Scientific Advisory Board during 2010 related solely to the first quarter of 2010, and no further payments were made (or will be made) to Dr. Sullivan and Professor Dwek after April 1, 2010 for their Scientific Advisory Board service.

        Non-employee director compensation levels are generally reviewed once approximately every two years by the Compensation Committee, and final decisions with respect to any changes in director compensation levels are made by the Board upon the recommendation of the Compensation Committee and the Nominating and Governance Committee.

        The following table lists the compensation earned in 2010 by each non-employee director:

2010 Director Compensation

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PROPOSAL NO. 2
ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION

        We are asking our shareholders to approve an advisory resolution on executive compensation as reported in this Proxy Statement. As described below in the Compensation Discussion and Analysis, the Compensation Committee has structured our executive compensation program to achieve the following primary objectives: (i) to attract and retain highly-competent Named Executive Officers capable of leading our company to the fulfillment of its business objectives and continued growth to augment shareholder value; (ii) to offer competitive compensation opportunities that reward individual contributions and corporate performance; (iii) to align the interests and compensation of our Named Executive Officers with the value created for shareholders through a strong pay-for-performance culture; and (iv) to incentivize our Named Executive Officers to consider the long-term as well as the short-term best interests of our company.

        As described further under Compensation Discussion and Analysis—Executive Summary, we feel strongly that our executive compensation programs have been well-designed to promote these objectives. In 2010 our Named Executive Officers' efforts led to over 30% growth in revenues for the ninth year in a row, which we believe is an unprecedented track record among U.S. biotechnology companies, and over 20% growth in our stock price during 2010.

        We urge shareholders to read the Compensation Discussion and Analysis beginning on page 21 of this Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 39 through 50, which provide detailed information on the compensation of our Named Executive Officers. The Compensation Committee and our Board of Directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this Proxy Statement has supported and contributed to both our recent and long-term success.

        In accordance with recently adopted Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the Annual Meeting:

        This advisory resolution, commonly referred to as a "say-on-pay" resolution, is non-binding on our Board of Directors. Although non-binding, our Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
THE APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.

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PROPOSAL NO. 3
ADVISORY VOTE ON THE FREQUENCY OF
FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION

        Pursuant to recently-adopted Section 14A of the Exchange Act, we are asking our shareholders to vote on whether future advisory votes on executive compensation of the nature reflected in Proposal No. 2 above should occur every year, every two years or every three years.

        After careful consideration, our Board of Directors has determined that holding an advisory vote on executive compensation every year is the most appropriate policy for our company at this time, and recommends that shareholders vote for future advisory votes on executive compensation to occur every year. While our executive compensation programs are designed to promote a long-term connection between pay and performance, our Board of Directors recognizes that executive compensation disclosures are made annually. Given that the "Say on Pay" advisory vote provisions are new, holding an annual advisory vote on executive compensation provides the Company with more direct and immediate feedback on our compensation disclosures. However, shareholders should note that because the advisory vote on executive compensation occurs well after the beginning of the compensation year, and because the different elements of our executive compensation programs are designed to operate in an integrated manner and to complement one another, in many cases it may not be appropriate or feasible to change our executive compensation programs in consideration of any one year's advisory vote on executive compensation by the time of the following year's annual meeting of shareholders. An annual advisory vote on executive compensation also is consistent with annually providing shareholders the opportunity to ratify the Audit Committee's selection of independent auditors.

        We understand that our shareholders may have different views as to what is an appropriate frequency for conducting future advisory votes on executive compensation, and we will carefully review the voting results on this proposal. Shareholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years, or abstain. Shareholders are not voting to approve or disapprove our Board's recommendation. This advisory vote on the frequency of future advisory votes on executive compensation is non-binding on our Board of Directors. Notwithstanding our Board's recommendation and the outcome of the shareholder vote, our Board may in the future decide to conduct advisory votes on a less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO CONDUCT FUTURE
ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY "ONE YEAR."

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COMPENSATION DISCUSSION AND ANALYSIS

        This Compensation Discussion and Analysis describes compensation objectives and policies set by our Compensation Committee for our Named Executive Officers, including executive pay decisions and processes and all elements of our executive compensation program.

        Our Named Executive Officers in 2010 consisted of the following four individuals:

Executive Summary

2010 in Review

        2010 was a highly successful year for United Therapeutics. We achieved record revenues of $603.8 million, record net income of $105.9 million, and record earnings before non-cash charges(1) of $305.3 million. We also reached new heights in terms of our market capitalization and stock price, which were $3.6 billion and $63.22 per share at December 31, 2010. In addition, we are successfully managing the commercial sale of three FDA-approved medicines (two of which were approved by the FDA in 2009) and have a robust pipeline of investigative products at all stages of the development cycle.

        Notably, 2010 marks our ninth consecutive year of at least 30% revenue growth, and our stock price has achieved cumulative growth of 795% over the past ten years. In addition we have the fourth-highest market capitalization per employee and second-highest revenue per employee of all of the top 25 U.S. companies, ranked by market capitalization, in the NASDAQ Biotech Index. None of this exceptional performance would have been possible without the efforts of our Board of Directors and employees, including our Named Executive Officers. The graphs below illustrate our financial and stock price performance over the last 10 years.

United Therapeutics Stock Price Performance vs. NASDAQ Biotech Index
(2001 - 2010)

(1)

Earnings before non-cash charges, a non-GAAP financial measure, is defined as net income, adjusted for the following non-cash charges, as applicable: (a) interest; (b) income taxes; (c) license fees; (d) depreciation and amortization; (e) impairment charges; and (f) share-based compensation (stock option and share tracking award expense). In the past, we have also referred to this figure as "EBITDASO".

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United Therapeutics 10-Year Performance
Revenue and Earnings Before Non-Cash Charges ($ Millions)

Overview of our Executive Compensation Program

        We believe that we have an exceptional leadership team and that their efforts are among the principal reasons we have consistently generated industry-leading performance over the past nine years in terms of revenue growth and average stock price increase. We further believe it is critical to our future success that we retain and reward our leadership team in a manner that reinforces our strong pay-for-performance philosophy. In other words, the compensation realized by our leadership team, including our Named Executive Officers, should reflect our financial and operational performance and the value realized by our shareholders. This principle is reflected in the composition of the average target total direct compensation for our Named Executive officers in 2010, which included a greater proportion of performance-based pay and less guaranteed pay than the executives in our two peer groups, as illustrated below:

United Therapeutics Compensation Mix vs. Peers

(1)

Target total direct compensation is defined as the sum of base salary, cash incentive bonus opportunity, and the grant date fair value of long-term incentive awards. For United Therapeutics,

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a target long-term incentive award has been used, to reflect historical payout levels, as follows: CEO—250,000 stock options; other Named Executive Officers—60% of long-term incentive opportunity.


For purposes of this chart, guaranteed pay includes base salary and time-based restricted stock. Performance pay includes stock options, cash incentive bonuses and performance-based restricted stock awards.

The key features of our executive compensation program, which are designed to support the objectives discussed below at Executive Compensation Framework—Compensation Program Objectives, are summarized below:

•

Pay Program Elements.  We provide our Named Executive Officers with annual compensation comprised of base salary, cash incentive bonus and long-term incentives. We also offer health and retirement benefits, limited perquisites and severance and change in control arrangements.



•

Competitive Positioning. Generally, for 2010 we targeted total direct compensation (defined as base salary, cash incentive bonus target, and long-term incentive bonus target) at or above the 75^th percentile of our Similarly Situated Peer Group, and at or above the 50^th percentile of our High Performing Peer Group. Individual compensation targets and actual compensation paid may vary based on the Compensation Committee's assessment of corporate performance and each Named Executive Officer's individual performance. For details regarding the composition of each peer group, see the section below entitled Compensation Peer Groups.



•

Cash Incentive Bonus Program. For the 2010 performance period, we paid cash incentive awards semi-annually to our Named Executive Officers based principally on the achievement of pre-established corporate goals under our Company-Wide Milestone Program, which is discussed below at Cash Incentive Bonus Program—2010 Milestones.



•

CEO Long-Term Incentive Compensation.  Our CEO is eligible to receive long-term incentive compensation annually in the form of stock options, under a pure pay-for-performance formula contained in her employment agreement, which bases the number of stock options awarded (if any) on the increase in our market capitalization during the year. Under this formula, our stock price must increase in order for our CEO to receive any stock options; then, the stock price must increase again for our CEO to realize any economic benefit from those stock options. This pay-for-performance formula, and the fact that long-term incentive compensation is a substantial

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part of our CEO's total compensation, are the key reasons why our CEO's total compensation is very closely aligned with total shareholder return, as illustrated by the chart below:

5-Yr CEO Total Direct Compensation vs. United Therapeutics Total Shareholder Return(1),(2)

(1)

Total direct compensation is defined as the sum of base salary, cash incentive bonus, and the grant date fair value of long-term incentive awards.

(2)

Indexed total shareholder return is equal to United Therapeutics' stock price as of the end of each year as a percentage of the starting point of December 31, 2006.

•

Other Named Executive Officers' Long-Term Incentive Compensation. Long-term incentive compensation for our other Named Executive Officers is paid in the form of cash-settled STAP awards, based principally on company performance (including Milestone attainment), plus an assessment of individual performance. Like stock options, STAP awards only provide value to a recipient if our stock price increases between the grant date and the exercise date.

2010 Compensation Decisions and Pay-for-Performance Alignment

        As a result of our record-breaking year, the 100% achievement of the Milestone goals in our cash incentive bonus program and each Named Executive Officer's performance during the year, our Compensation Committee approved the following compensation decisions:

•

Maximum payout of the cash incentive bonus for 2010 for all Named Executive Officers;



•

A grant of 540,861 stock options to Dr. Rothblatt based on the formula set forth in her employment agreement; and



•

Grants of STAP awards for performance in the first and second halves of 2010 to each Named Executive Officer (other than Dr. Rothblatt) equal to 100% of their respective half-year long-term incentive bonus targets.

        In addition, based in part on strong company performance during 2009, the Compensation Committee approved increases in 2010 base salary and cash bonus incentive targets for each Named Executive Officer ranging from 3% to 11% (salary) and 8% to 19% (cash bonus incentive target). These increases followed relatively modest increases in cash bonus incentive targets in 2009 (ranging from 3.3% to 5%), and no base salary increases in 2009. In both 2009 and 2010, long-term incentive bonus targets were unchanged.

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        As a result of these actions, actual total direct compensation (defined as base salary, plus cash incentive bonus earned, plus the grant date fair value of long-term incentive awards granted) for all of our Named Executive Officers was above the 75^th percentile of both the Similarly Situated and High-Performing peer groups. Our Compensation Committee believes this was appropriate given our track record of extraordinary performance against our internal goals and relative to our peers. For example, in 2010 our growth in revenues, earnings before non-cash charges, net income and revenue per employee were all above the 75^th percentile of both the Similarly Situated and High-Performing peer groups.

Summary of Compensation Governance Policies.

        Our Compensation Committee and Board of Directors have taken the following steps to further enhance the governance of our executive compensation program:

•

Stock Ownership Guidelines. Our Board has adopted Stock Ownership Guidelines applicable to our directors and Named Executive Officers. For details, see the section above entitled Board of Directors, Committees, Corporate Governance—Stock Ownership Guidelines and the section below entitled Compensation Discussion and Analysis—Stock Ownership Guidelines.



•

Stock Option / STAP Repricing Policy. Our Board has adopted a policy against repricing or exchanging underwater stock options and STAP awards without shareholder approval. For details, see the section below entitled Policy Against Repricing.



•

Compensation Recovery Policy.  Our Board has the authority, to the extent permitted by governing law, to make retroactive adjustments to any cash-, stock option- or STAP award-based incentive compensation paid to our Named Executive Officers and certain other senior officers where the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a restatement.



•

Prohibition Against Hedging.  Pursuant to our insider trading policy, directors, officers and employees are prohibited from, among other things, purchasing our securities on margin, engaging in "short" sales of our common stock, or buying or selling puts, calls, futures contracts or other forms of derivative securities relating to our securities.



•

Independent Consultant. Our Compensation Committee has retained Compensia, a nationally-recognized executive compensation consulting firm, since 2004 to advise it on compensation matters relating to our Named Executive Officers. For details, see the section above entitled Board of Directors, Committees, Corporate Governance—Compensation Committee—Independent Compensation Consultant.



•

Executive Sessions.  Our Compensation Committee regularly meets in executive session without members of management present.

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Executive Compensation Framework

Compensation Program Objectives

        Our executive compensation program is designed to achieve four primary objectives:

•

Pay for Performance.  Structure compensation programs to emphasize variable, performance-based elements so that realized compensation is aligned with corporate performance (both financial and non-financial), stock price performance and individual performance.



•

Shareholder alignment.  Align the interests and compensation of our Named Executive Officers with the value created for shareholders through equity-oriented incentives and stock ownership guidelines.



•

Balance Short-Term and Long-Term Perspectives.  Encourage our Named Executive Officers to consider the long-term as well as the short-term best interests of our company.



•

Market Competitiveness.  Offer competitive compensation opportunities that facilitate the attraction and retention of highly-competent executive officers capable of leading our company to the fulfillment of its business objectives and continued growth in shareholder value.

        We accomplish these objectives through five primary compensation elements, as summarized in the table below:

Compensation Peer Groups

        Our Compensation Committee annually examines Named Executive Officer compensation levels relative to peer groups of industry and labor market competitors. For 2010, as in past years, the Compensation Committee considered both a Similarly Situated Peer Group and High Performing Peer Group, which are defined in the table below. The Similarly Situated Peer Group includes biopharmaceutical and biotechnology companies that are labor market competitors for executive talent and are in a similar range with our company with respect to several metrics, principally revenue and market capitalization. The High Performing Peer Group includes biopharmaceutical and biotechnology companies, regardless of size, deemed by the Compensation Committee to be industry leaders, as measured by financial performance, shareholder value creation and drug development and commercialization.

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        For 2010, the Compensation Committee, with input from Compensia, adopted the following criteria to define each peer group:

        The High Performing Peer Group includes the following companies: Alexion Pharmaceuticals, Inc., Amgen, Inc., Biogen Idec Inc., Celgene Corporation, Cephalon, Inc., Dendreon Corporation, Genzyme Corporation, Gilead Sciences, Inc., Illumina, Inc., Life Technologies Corp., Mylan Inc., Myriad Genetics, Inc., Perrigo Company, Vertex Pharmaceuticals Inc. and Warner Chilcott Ltd.

        The Similarly Situated Peer Group includes the following companies: Alexion Pharmaceuticals, Inc., Amylin Pharmaceuticals, Inc., BioMarin Pharmaceutical Inc., Dendreon Corporation, Endo Pharmaceuticals, Gen-Probe Inc., ISIS Pharmaceuticals, Inc., Myriad Genetics, Inc., Onyx Pharmaceuticals, Inc., OSI Pharmaceuticals, Inc., Perrigo Company, Regeneron Pharmaceuticals, Inc, Sepracor Inc., Techne Corporation and Warner Chilcott Ltd.

        The profile for each peer group, as compared to United Therapeutics, is summarized in the table below (dollars in millions):

        The Compensation Committee considered pay program design and individual executive compensation data based on the public filings of our two peer groups in the fall of 2009. This information served as an important factor for the 2010 compensation decisions for our Named Executive Officers described below.

Competitive Pay Positioning

        The Compensation Committee evaluates our Named Executive Officers' pay competitiveness on an element-by-element basis, as well as on a target total direct compensation basis. In setting 2010 compensation levels, the Compensation Committee generally sought to set Named Executive Officer target total direct compensation at or above the 75^th percentile of the Similarly Situated Peer Group and at or above the 50^th percentile of the High Performing Peer Group. Target total direct compensation includes annual base salary, target cash incentive bonus at 100% of opportunity and long-term incentive bonus compensation at either 250,000 stock options (in the case of our Chief Executive Officer) or 60% of opportunity (in the case of our other Named Executive Officers). The Compensation Committee targeted at or above the 75^th percentile of the Similarly Situated Peer Group

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in order to provide highly competitive compensation to retain what it believes is an exceptional management team and in recognition of our long track record of performing at or near the top of this peer group. A lower target percentile, at or above the 50^th percentile, was used for the High Performing Peer Group because these companies tended to be larger than us on a revenue, profitability and market capitalization basis. Individual compensation targets and actual compensation delivered may vary based on the Compensation Committee's assessment of corporate performance and each Named Executive Officer's individual performance. We believe these benchmark targets are particularly appropriate in light of our strong pay-for-performance compensation structure, where a significantly larger portion of Named Executive Officers' compensation on average is performance-based, when compared to our peer groups (as shown in the chart above under—Overview of our Executive Compensation Program).

Tally Sheets

        The Compensation Committee periodically reviews tally sheets for our Named Executive Officers and utilizes them, along with peer group compensation and performance analyses, in making its compensation decisions. These tally sheets assign dollar amounts to each component of compensation for our Named Executive Officers, including target total direct compensation, outstanding long-term incentive awards, benefits, perquisites and potential change in control severance payments. Tally sheets are not used in any formulaic manner to dictate pay decisions, but rather are used to educate and inform the Compensation Committee regarding the value of existing compensation arrangements. The Compensation Committee reviewed tally sheets in the fall of 2009 to prepare for its 2010 decisions regarding compensation for our Named Executive Officers.

Other Factors Affecting Compensation Decisions

        In addition to benchmarking and tally sheets, the Compensation Committee also takes into account the financial performance of our company, including, among other things, independent analyst reports, changes in the price of our common stock and individual achievements (such as management efforts resulting in successful clinical trial results). Based on this information, the Compensation Committee may make individual adjustments to our Named Executive Officers' compensation accordingly. In addition, the Compensation Committee takes into account the input of our Chief Executive Officer in determining the compensation levels for the Named Executive Officers other than the Chief Executive Officer.

Review of 2010 Executive Compensation

        

Summary of 2010 Compensation

        The components of our Named Executive Officers' target total direct compensation are base salary, cash incentive bonus compensation and long-term incentive bonus compensation. The following table shows our Named Executive Officers' base salaries and target variable compensation for 2010 and the amount of any increase of such compensation over that for 2009. The basis for the Compensation Committee's decisions with respect to each component of 2010 compensation is discussed in greater detail below.

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Summary 2010 Target Total Direct Compensation

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(1)

The long-term incentive bonus opportunity represents the total number of STAP awards for our Named Executive Officers, other than Dr. Rothblatt, that can potentially be granted based on 2010 performance.

(2)

Long-term incentive bonus awards for Dr. Rothblatt, if any, are determined at the end of each calendar year in accordance with a formula set forth in her employment agreement, which takes into account the rise, if any, in our market capitalization each year based on the average closing price of our common stock for the month of December. For a description of Dr. Rothblatt's long-term incentive bonus award opportunity, see the narrative under the section entitled Named Executive Officer Employment Agreements—Dr. Rothblatt following the Grants of Plan-Based Awards for 2010 table below.

Base Salary

        Base salary is the primary fixed element of the compensation packages for our Named Executive Officers. The Compensation Committee reviews and establishes base salary levels for our Named Executive Officers each year taking into consideration one or more of the following three factors, depending on the circumstances: (i) a subjective evaluation of individual performance, including contribution to the advancement of corporate objectives, impact on financial results, and strategic accomplishments; (ii) our overall performance, financial condition and prospects; and (iii) the annual compensation received by executives holding comparable positions at our peers as described in the section entitled Executive Compensation Framework above.

        In January 2010, the Compensation Committee approved the base salaries for our Named Executive Officers listed in the Summary 2010 Target Compensation table above. Dr. Rothblatt's and Mr. Ferrari's base salaries were increased by 11% and 10%, respectively, to bring them closer to (but still below) the 50^th percentile of the High Performing Peer Group. Mr. Mahon's and Dr. Jeffs' base salaries were increased at the same level as the average increase given to all employees for 2010 because their base salaries were already above the 75^th percentile of the Similarly Situated Peer Group and 50^th percentile of the High Performing Peer Group.

Cash Incentive Bonus Program

        All of our Named Executive Officers participate in our Company-Wide Milestone Incentive Bonus Program, which in 2010 provided semi-annual, cash incentive awards based on the achievement of pre-established goals.

Cash Incentive Bonus Targets

        Each year, the Compensation Committee establishes cash incentive bonus targets for each of our Named Executive Officers, taking into consideration the same factors as it uses to determine base salaries. In 2010, the Compensation Committee increased the cash incentive bonus targets for our

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Named Executive Officers as stated in the Summary 2010 Target Compensation table above. These target amounts also represent the maximum potential payout under the Company-Wide Milestone Incentive Bonus Program.

        Dr. Rothblatt's and Mr. Ferrari's cash incentive bonus opportunities increased by 16% and 19%, respectively, to bring target total cash compensation (defined as based salary plus target cash incentive bonus opportunity) closer to (but still below) the 50^th percentile of the High Performing Peer Group. Mr. Mahon's and Dr. Jeffs' cash incentive bonus targets were also adjusted in support of the Compensation Committee's general philosophy of increasing variable, performance-based pay at a faster rate than fixed compensation. These increases were more modest, relative to Dr. Rothblatt and Mr. Ferrari, because Dr. Jeffs and Mr. Mahon's total cash compensation was already above the 75^th percentile of the Similarly Situated Peer Group and 50^th percentile of the High Performing Peer Group.

2010 Milestones

        The Milestones (or performance goals) are generally intended to create company-wide incentives relating to significant corporate objectives, such as (a) financial performance and growth, (b) research and development programs, manufacturing capabilities and other operational metrics and goals, and (c) ethical conduct. The Compensation Committee, in its discretion, may amend our Company-Wide Milestones and weightings from time to time, to reflect core performance measures for the success of our business and to set goals that translate most directly into short-, medium- and long-term value growth. The Milestone performance targets are difficult to meet, and require significant leadership and execution on the part of our Named Executive Officers.

        Our Company-Wide Milestones for 2010 were:

        Partial credit may be earned under Milestones 2 and 3 as follows:

Partial Credit Performance Goals

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(1)

Base salaries for our Named Executive Officers became effective on April 1^st of each year. Therefore, a portion of the base salary shown for each year reflects the salary level for the previous year.

(2)

Amounts shown represent the aggregate grant date fair value of stock option and STAP awards granted to Named Executive Officers in each reported year, computed in accordance with SEC rules. For a discussion of valuation assumptions for stock option and STAP awards see Notes 11 and 8, respectively, to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010. The stock options were awarded under our EIP and the STAP awards were granted under the STAP. See the Grants of Plan-Based Awards in 2010 table for more information on stock options and STAP awards granted to our Named Executive Officers in 2010.

(3)

Amounts shown represent the total cash awards earned by each Named Executive Officer under our Company-Wide Milestone Incentive Bonus Program for the first and second halves of 2010. The payouts were determined based on our attainment of specific performance Milestones. For information on the amounts earned for the first and second halves of 2010, see the section entitled Cash Incentive Bonus Compensation in the Compensation Discussion and Analysis above.

(4)

Amounts shown represent the change in the actuarial present value of retirement benefits under the SERP calculated pursuant to SEC requirements. The assumptions used in calculating the change in the actuarial present value of SERP benefits are described in the footnotes to the Pension Benefits table below. The change in pension value from year to year as reported in the table will vary based on these assumptions and may not represent the value that a Named Executive Officer will actually accrue or receive under the SERP.

(5)

The amounts shown represent the aggregate incremental cost of the percentage of personal use by Named Executive Officers that can be attributed to lease, insurance and maintenance payments made on vehicles leased by us or for monthly automobile allowances, travel expenses for family members to our functions (collectively, the perquisites), and our "matching contributions" under our 401(k) Plan equal to 40% of each participant's qualifying salary contributions. None of the perquisites provided to any Named Executive Officer in 2010 had a value that exceeded the greater of $25,000 or 10% of the total amount of perquisites for that Named Executive Officer. Excluding perquisites, none of the individual elements reported as "All Other Compensation" for our Named Executive Officers had a value greater than $10,000.

(6)

Our Canadian subsidiary pays a portion of Dr. Rothblatt's total base salary in the amount of 120,000 Canadian dollars. The value of this portion in U.S. dollars has been estimated for the purposes of disclosure here by using the spot exchange rate on the dates on which Dr. Rothblatt was paid. In 2008, 2009 and 2010, our Canadian subsidiary paid the equivalent of US$113,178, US$105,701 and US$116,643, of Dr. Rothblatt's total base salary, respectively.

(7)

Includes $7,692 in accrued but unused vacation time that Mr. Ferrari cashed out in 2009 and in 2010, consistent with our company-wide vacation policy.

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(1)

The amounts in this column represent each Named Executive Officer's cash incentive bonus target opportunity based on the annual Company-Wide Milestone Incentive Bonus Program for 2010 described in the section entitled Company-Wide Milestone Incentive Bonus Program in the Compensation Discussion and Analysis above. Our Company-Wide Milestone Incentive Bonus Program does not have a threshold payout. The target payout for the Company-Wide Milestone Incentive Bonus Program also represents the maximum payout. Accordingly, no threshold or maximum columns are shown. Actual bonuses earned under the program in 2010 are reported in the Summary Compensation Table under the column entitled "Non-Equity Incentive Plan Compensation."

(2)

The amounts in this column reflect the number of stock option awards granted to Dr. Rothblatt pursuant to the formula set forth in her employment agreement and the number of STAP awards granted to our other Named Executive Officers as long-term incentive bonus awards under our STAP.

(3)

For stock options, the grant date fair value is generally the amount that we will recognize as an expense over the award's vesting period, computed in accordance with SEC rules. For STAP awards, the dollar values in this column reflect the fair value of the awards on the grant date computed in accordance with SEC rules. The grant date fair value does not necessarily represent the amount we will recognize as an expense over the period that the STAP award is outstanding. The fair value of STAP awards is re-measured at the end of each quarterly reporting period until the awards are paid or are no longer outstanding. The expense we recognize on each quarterly reporting date is based on the portions of awards that are vesting and the amount of time vested awards have been outstanding.