Exhibit
10.34


METABASIS EMPLOYEE INCENTIVE

COMPENSATION PLAN FOR 2007


The Metabasis
Employee Incentive Compensation Plan (the “Plan”) is designed to offer
incentive compensation to all eligible employees by rewarding the achievement
of individual and company goals. This plan helps foster an environment that
focuses on the achievement of goals through teamwork, recognition of company
goals and a drive for profitability. The Company reserves the right to
discontinue or modify the Plan at any time at its sole discretion.


I.              Purpose
of the Plan


The Metabasis
Employee Incentive Compensation Plan is designed to:


·                                          Encourage teamwork among all areas within
the Company


·                                          Incorporate an incentive program within
the Company’s overall compensation program designed around the company and
individual goals;


·                                          Reward employees who have a positive
impact on company results;


·                                          Provide an incentive to achieve overall
company goals thereby enhancing shareholder value.


II.            Plan
Governance


The Compensation
Committee of the Board of Directors will govern the Plan. The Chief Executive
Officer of Metabasis will be responsible for administration of the Plan. The
Compensation Committee will be responsible for approving any incentive awards
to officers of the Company and for determining and approving incentive awards
to the President and Chief Executive Officer.











III.           Incentive Compensation Determinations


A.            Incentive Bonus Target


Incentive bonus targets represent the incentive bonus
payable to an employee as a percentage of each eligible participant’s annual
compensation rate (base salary and sales commissions only) assuming attainment
of 100% of individual and company goals and the composition of the employee
workforce. The following are the incentive bonus targets for each respective job
title or group. At the discretion of management, the bonus may be linked to
salary grade rather than a title:




	
  TITLE

  	
   

  	
  BONUS TARGET

  	
   

  
	
  CEO

  	
   

  	
  50

  	
  %

  
	
  President or Senior, Executive, Officer VP

  	
   

  	
  35

  	
  %

  
	
  Vice President

  	
   

  	
  20

  	
  %

  
	
  Director

  	
   

  	
  15

  	
  %

  
	
  Manager,
  Supervisor

  	
   

  	
  10

  	
  %

  






 


C.            Company and Individual Performance
Goals


1)                                      The Plan provides for incentive bonuses
based on the achievement of annual individual and company goals that have been
submitted and approved as described in point #2 of this section. The relative
weight between individual and company performance factors varies based on job
levels. The weighting will be reviewed prior to the beginning of each calendar
year and adjusted as necessary or appropriate. The plan weighting for calendar
year 2007 are:




	
  TITLE

  	
   

  	
  COMPANY

  	
   

  	
  INDIVIDUAL

  	
   

  
	
  CEO

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  
	
  President or
  Senior,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive,
  Officer VP

  	
   

  	
  85

  	
  %

  	
  15

  	
  %

  
	
  Vice President

  	
   

  	
  70

  	
  %

  	
  30

  	
  %

  
	
  Director

  	
   

  	
  60

  	
  %

  	
  40

  	
  %

  
	
  Manager, Supervisor

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  






 


2)                                      The President and Chief Executive Officer
will present to the Board of Directors a list of overall company goals for the
year, which are subject to approval by the Board of Directors. All
management-level participants will develop a written list of key











individual goals
to be approved by the responsible vice president and by the President and Chief
Executive Officer.


3)                                      Separate payment “percent multipliers”
will be determined after evaluating both individual and company performance
against goals. The following scale will be used to determine the actual bonus
percent multiplier based upon measurement of individual and company performance
against stated goals:




	
  PERFORMANCE

  	
   

  	
  PERCENT

  	
   

  
	
  MEASUREMENT

  	
   

  	
  MULTIPLIER

  	
   

  
	
  Met/exceeded all
  goals

  	
   

  	
  100%-125

  	
  %

  
	
  Met most goals

  	
   

  	
  75%-99

  	
  %

  
	
  Met some goals

  	
   

  	
  25%-74

  	
  %

  
	
  Performance for the
  year was unacceptable

  	
   

  	
  0

  	
  %

  






 


IV.                          Calculation of Incentive Bonus


Calculation Steps (See
attached example):


1)                                Management determines each participant’s
maximum incentive bonus target (the “Bonus Target”) by multiplying the
participant’s base salary paid during the calendar year by the appropriate
bonus target percentage;


2)                                Management determines each participant’s
maximum incentive bonus target for both individual (Individual Target) and
company (Company Target) categories by multiplying the appropriate percentage
weighting for each participants position by the participant’s Bonus Target;


3)                                Management multiplies the approved
company and individual performance measurement percentages against the participant’s
Company Target and Individual Target respectively.


4)                                Management adds the individual and
company totals together to determine the incentive bonus earned for each
participant.


V.                              Payment of Incentive Bonuses


Annual individual and
company performance reviews will be completed prior to awarding bonuses. This
process requires appropriate management to submit written evaluations of
eligible employee’s individual performance against goals, along with
recommended performance measurement percent multipliers, to their respective
department Vice











Presidents. These
evaluations and recommendations will be reviewed and submitted for approval by
the Chief Executive Officer. The Chief Executive Officer will submit individual
evaluations for all officers and recommendations, along with an evaluation of
the Company’s performance against goals, to the Compensation Committee of the
Board of Directors. The Committee will provide final approval for incentive
compensation bonus pay-outs for the officers. The Chief Executive Officer will
approve all non-officer bonuses.


The Company reserves the
right to make any or all of the incentive bonus pay-out in the form of cash or
company stock. Additionally, the Company, in its sole discretion, may pro-rate
an employees incentive compensation bonus based on the employee’s date of hire,
tenure in position or other factors as deemed appropriate.


INCENTIVE COMPENSATION
PROGRAM- EXAMPLE CALCULATION


 




	
  Name

  	
   

  	
  John Doe

  	
   

  
	
  Title

  	
   

  	
  Director

  	
   

  
	
  Base Salary

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Bonus Target

  	
   

  	
  15

  	
  %

  
	
  Bonus Target
  Amount

  	
   

  	
  $

  	
  15,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Target Award —
  Company

  	
   

  	
  60%, $9,000

  	
   

  
	
  Target Award —
  Individual

  	
   

  	
  40%, $6,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Performance
  Multiplier — Company

  	
   

  	
  70

  	
  %

  
	
  Performance
  Multiplier — Individual

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  INCENTIVE AWARD:

  	
   

  	
   

  	
   

  
	
  Company
  Component

  	
   

  	
  $

  	
  6,300

  	
   

  
	
  Individual
  Component

  	
   

  	
  $

  	
  3,000

  	
   

  
	
  TOTAL
  AWARD

  	
   

  	
  $

  	
  9,300