**Exhibit10.34**

**METABASIS EMPLOYEE INCENTIVECOMPENSATION PLAN FOR 2007**

The MetabasisEmployee Incentive Compensation Plan (the “Plan”) is designed to offerincentive compensation to all eligible employees by rewarding the achievementof individual and company goals. This plan helps foster an environment thatfocuses on the achievement of goals through teamwork, recognition of companygoals and a drive for profitability. The Company reserves the right todiscontinue or modify the Plan at any time at its sole discretion.

# **I.              Purposeof the Plan**

The MetabasisEmployee Incentive Compensation Plan is designed to:

·                                          Encourage teamwork among all areas withinthe Company

·                                          Incorporate an incentive program withinthe Company’s overall compensation program designed around the company andindividual goals;

·                                          Reward employees who have a positiveimpact on company results;

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

**II.            PlanGovernance**

The CompensationCommittee of the Board of Directors will govern the Plan. The Chief ExecutiveOfficer of Metabasis will be responsible for administration of the Plan. TheCompensation Committee will be responsible for approving any incentive awardsto officers of the Company and for determining and approving incentive awardsto the President and Chief Executive Officer.

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**III.           Incentive Compensation Determinations**

**A.            Incentive Bonus Target**

Incentive bonus targets represent the incentive bonuspayable to an employee as a percentage of each eligible participant’s annualcompensation rate (base salary and sales commissions only) assuming attainmentof 100% of individual and company goals and the composition of the employeeworkforce. The following are the incentive bonus targets for each respective jobtitle or group. At the discretion of management, the bonus may be linked tosalary 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 PerformanceGoals**

1)                                      The Plan provides for incentive bonusesbased on the achievement of annual individual and company goals that have beensubmitted and approved as described in point #2 of this section. The relativeweight between individual and company performance factors varies based on joblevels. The weighting will be reviewed prior to the beginning of each calendaryear and adjusted as necessary or appropriate. The plan weighting for calendaryear 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 Officerwill present to the Board of Directors a list of overall company goals for theyear, which are subject to approval by the Board of Directors. Allmanagement-level participants will develop a written list of key

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individual goalsto be approved by the responsible vice president and by the President and ChiefExecutive Officer.

3)                                      Separate payment “percent multipliers”will be determined after evaluating both individual and company performanceagainst goals. The following scale will be used to determine the actual bonuspercent multiplier based upon measurement of individual and company performanceagainst 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 (Seeattached example):

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

2)                                Management determines each participant’smaximum incentive bonus target for both individual (Individual Target) andcompany (Company Target) categories by multiplying the appropriate percentageweighting for each participants position by the participant’s Bonus Target;

3)                                Management multiplies the approvedcompany and individual performance measurement percentages against the participant’sCompany Target and Individual Target respectively.

4)                                Management adds the individual andcompany totals together to determine the incentive bonus earned for eachparticipant.

**V.****                             ****Payment of Incentive Bonuses**

Annual individual andcompany performance reviews will be completed prior to awarding bonuses. Thisprocess requires appropriate management to submit written evaluations ofeligible employee’s individual performance against goals, along withrecommended performance measurement percent multipliers, to their respectivedepartment Vice

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Presidents. Theseevaluations and recommendations will be reviewed and submitted for approval bythe Chief Executive Officer. The Chief Executive Officer will submit individualevaluations for all officers and recommendations, along with an evaluation ofthe Company’s performance against goals, to the Compensation Committee of theBoard of Directors. The Committee will provide final approval for incentivecompensation bonus pay-outs for the officers. The Chief Executive Officer willapprove all non-officer bonuses.

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

INCENTIVE COMPENSATIONPROGRAM- 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** | ** ** |
|                                      |       |        |      |

 

 

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