Document:

Exhibit 4.4

 

THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). 
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER
THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

METABASIS THERAPEUTICS, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

April 16, 2008

 

VOID AFTER APRIL 16, 2013

 

THIS CERTIFIES THAT, for value
received,
[                      ],
or assigns (the “Holder”), is entitled to
subscribe for and purchase at the Exercise Price (defined below) from Metabasis
Therapeutics, Inc., a Delaware corporation, with its principal office at
11119 Torrey Pines Road, La Jolla, California 92037  (the
“Company”) up to
[                      ]
shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”).

 

1.             DEFINITIONS.  As used herein, the following terms shall
have the following respective meanings:

 

(a)           “Exercise
Period” shall mean the period commencing with the date that is 180 days after
the date hereof and ending five years from the date hereof, unless sooner
terminated as provided below.

 

(b)           “Exercise
Price” shall mean $2.69 per share, subject to adjustment pursuant to Section 5
below.

 

(c)           “Exercise
Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.

 

2.             EXERCISE
OF WARRANT.  The rights represented
by this Warrant may be exercised in whole or in part at any time during the
Exercise Period, by delivery of the following to the Company at its address set
forth above (or at such other address as it may designate by notice in writing
to the Holder):

 

(a)           An executed Notice of Exercise in the
form attached hereto;

 

(b)           Payment of the Exercise Price either (i) in
cash or by check, (ii) by cancellation of indebtedness, or (iii) pursuant
to Section 2.1 below; and

 

(c)           This Warrant.

 

Certificates for shares purchased hereunder shall be
transmitted by the transfer agent of the Company to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission system if the Company is a participant
in such system, and otherwise by physical delivery to the address 

 

1

 

specified by the Holder
in the Notice of Exercise within five business days from the delivery to the
Company of the Notice of Exercise, surrender of this Warrant and payment of the
aggregate Exercise Price as set forth above. 
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. 
The Exercise Shares shall be deemed to have been issued, and Holder or
any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised by payment to the Company of the Exercise Price.

 

The person in whose name any certificate or
certificates for Exercise Shares are to be issued upon exercise of this Warrant
shall be deemed to have become the holder of record of such shares on the date
on which this Warrant was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such certificate or certificates,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.

 

2.1          Net
Exercise. 
Notwithstanding any provisions herein to the contrary, if during the
Exercise Period the fair market value of one share of the Common Stock is
greater than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant by payment of cash or by check, or
by cancellation of indebtedness, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Notice of Exercise in which event
the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

 

X = Y (A-B)

A

 

	
   

  	
  Where

  	
  X =

  	
  the number of shares of
  Common Stock to be issued to the Holder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y =

  	
  the number of
  shares of Common Stock purchasable under the Warrant or, if only a portion of
  the Warrant is being exercised, the portion of the Warrant being canceled (at
  the date of such calculation)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A =

  	
  the fair market
  value of one share of the Company’s Common Stock (at the date of such
  calculation)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B =

  	
  Exercise Price
  (as adjusted to the date of such calculation)

  

 

For purposes of the above calculation, the “fair
market value” of one share of Common Stock shall mean (i) the average of
the closing sales prices for the shares of Common Stock on the NASDAQ Global
Market or other trading market where such security is listed or traded as
reported by Bloomberg Financial Markets (or a comparable reporting service of
national reputation selected by the Company and reasonably acceptable to the
Holder if Bloomberg Financial Markets is not then reporting sales prices of
such security) (collectively, “Bloomberg”)
for the 10 consecutive trading days immediately preceding such date, or (ii) if
the NASDAQ Global Market is not the principal trading market for the shares of
Common Stock, the average of the reported sales prices reported by Bloomberg on
the principal trading market for the 

 

2

 

Common Stock during the
same period, or, if there is no sales price for such period, the last sales
price reported by Bloomberg for such period, or (iii) if neither of the
foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security
as reported by Bloomberg, or if no sales price is so reported for such
security, the last bid price of such security as reported by Bloomberg or (iv) if
fair market value cannot be calculated as of such date on any of the foregoing
bases, the fair market value shall be as determined by the Board of Directors
of the Company in the exercise of its good faith judgment.

 

2.2          Issuance of New Warrants. 
Upon any partial exercise of this Warrant, the Company, at its expense,
will forthwith and, in any event within five business days, issue and deliver
to the Holder a new warrant or warrants of like tenor, registered in the name
of the Holder, exercisable, in the aggregate, for the balance of the number of
shares of Common Stock remaining available for purchase under the Warrant.

 

2.3          Payment of Taxes and Expenses.  The Company shall pay any recording, filing,
stamp or similar tax which may be payable in respect of any transfer involved
in the issuance of, and the preparation and delivery of certificates (if
applicable) representing, (i) any Exercise Shares purchased upon exercise
of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.

 

3.              COVENANTS OF THE COMPANY.

 

3.1          Covenants
as to Exercise Shares. 
The Company covenants and agrees that all Exercise Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issuance
thereof.  The Company further covenants
and agrees that the Company will at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of Common Stock to provide for the exercise of the rights represented by
this Warrant.  If at any time during the
Exercise Period the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes.

 

3.2          No
Impairment.  Except and
to the extent as waived or consented to by the Holder, the Company will not, by
amendment of its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may be
necessary or appropriate in order to protect the exercise rights of the Holder
against impairment.

 

3.3          Notices
of Record Date and Certain Other Events.  In the event of any taking by the Company of
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the 

 

3

 

Company shall mail to the
Holder, at least 20 days prior to the date on which any such record is to be
taken for the purpose of such dividend or distribution, a notice specifying
such date.  In the event of any voluntary
dissolution, liquidation or winding up of the Company, the Company shall mail
to the Holder, at least 20 days prior to the date of the occurrence of any such
event, a notice specifying such date.

 

4.              REPRESENTATIONS OF HOLDER.

 

4.1          Acquisition
of Warrant for Personal
Account.  The Holder represents
and warrants that it is acquiring the Warrant solely for its account for
investment and not with a view to or for sale or distribution of said Warrant
or any part thereof.  The Holder also
represents that the entire legal and beneficial interests of the Warrant and
Exercise Shares the Holder is acquiring is being acquired for, and will be held
for, its account only.

 

4.2           Securities
Are Not Registered.

 

(a)           The Holder understands that the
Warrant and the Exercise Shares have not been registered under the Securities
Act of 1933, as amended (the “Act”) on
the basis that no distribution or public offering of the stock of the Company
is to be effected.  The Holder realizes
that the basis for the exemption may not be present if, notwithstanding its
representations, the Holder has a present intention of acquiring the securities
for a fixed or determinable period in the future, selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the securities.  The Holder
has no such present intention.

 

(b)           The Holder recognizes that the
Warrant and the Exercise Shares must be held indefinitely unless they are
subsequently registered under the Act or an exemption from such registration is
available.

 

(c)           The Holder is aware that neither the
Warrant nor the Exercise Shares may be sold pursuant to Rule 144 adopted
under the Act unless certain conditions are met, including, among other things,
the existence of a public market for the shares, the availability of certain current
public information about the Company, the resale following the required holding
period under Rule 144 and, in certain circumstances, the number of shares
being sold not exceeding specified limitations.

 

4.3          Disposition of Warrant and Exercise Shares.

 

(a)           The
Holder further agrees not to make any disposition of all or any part of the
Warrant or Exercise Shares in any event unless and until:

 

(i)            The Company shall have received a
letter secured by the Holder from the Securities and Exchange Commission
stating that no action will be recommended to the Commission with respect to
the proposed disposition; or

 

(ii)           There is then in effect a
registration statement under the Act covering such proposed disposition and
such disposition is made in accordance with said registration statement; or

 

4

 

(iii)         The Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, for
the Holder to the effect that such disposition will not require registration of
such Warrant or Exercise Shares under the Act or any applicable state
securities laws; provided, however, that no such
opinion of counsel shall be required for sales (a) under Rule 144, (b) to
one of its nominees, affiliates or a nominee thereof, (c) to a pension or
profit-sharing fund established and maintained for its employees or for the
employees of any affiliate,  (d) from
a nominee to any of the aforementioned persons as beneficial owner of this
Warrant or such Exercise Shares or (e) to a qualified institutional buyer,
so long as such transfer is effected in compliance with Rule 144A under
the Securities Act.

 

(b)           The Holder understands and agrees
that all certificates evidencing the shares to be issued to the Holder may bear
the following legend:

 

“THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

5.             ADJUSTMENT OF EXERCISE PRICE AND SHARES.

 

(a)           In the event of changes in the
outstanding Common Stock of the Company by reason of stock dividends,
split-ups, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, consolidation, acquisition
of the Company (whether through merger or acquisition of substantially all the assets
or stock of the Company), or the like, the number, class and type of shares
available under the Warrant in the aggregate and the Exercise Price shall be
correspondingly adjusted to give the Holder of the Warrant, on exercise for the
same aggregate Exercise Price, the total number, class, and type of shares or
other property as the Holder would have owned had the Warrant been exercised
prior to the event and had the Holder continued to hold such shares until the
event requiring adjustment.  The form of this
Warrant need not be changed because of any adjustment in the number of Exercise
Shares subject to this Warrant.

 

(b)           If
at any time or from time to time the holders of Common Stock of the Company (or
any shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

 

(i)            Common Stock or any shares of stock
or other securities which are at any time directly or indirectly convertible
into or exchangeable for Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the foregoing by way of dividend or
other distribution (other than a dividend or distribution covered in Section 5(a) above),

 

(ii)           any cash paid or payable otherwise
than as a cash dividend or

 

5

 

(iii)         Common Stock or additional stock or
other securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 5(a) above), then
and in each such case, the Holder hereof will, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (ii) and (iii) above) which such
Holder would hold on the date of such exercise had such Holder been the holder
of record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other additional
stock and other securities and property.

 

6.             FRACTIONAL
SHARES.  No fractional
shares shall be issued upon the exercise of this Warrant as a consequence of
any adjustment pursuant hereto.  All
Exercise Shares (including fractions) issuable upon exercise of this Warrant
may be aggregated for purposes of determining whether the exercise would result
in the issuance of any fractional share. 
If, after aggregation, the exercise would result in the issuance of a
fractional share, the Company shall, in lieu of issuance of any fractional
share, pay the Holder otherwise entitled to such fraction a sum in cash equal
to the product resulting from multiplying the then current fair market value of
an Exercise Share by such fraction.

 

7.             FUNDAMENTAL
TRANSACTIONS.  If, at
any time while this Warrant is outstanding, (i) the Company effects any
merger of the Company with or into another entity, (ii) the Company
effects any sale of all or substantially all of its assets in one or a series
of related transactions, (iii) any tender offer or exchange offer (whether
by the Company or another individual or entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 5 above) (in any
such case, a “Fundamental
Transaction”), then, upon
any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option
of the Holder, (a) upon exercise of this Warrant, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.   For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in
such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental 

 

6

 

Transaction.  To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 7 and insuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

 

8.             NO
STOCKHOLDER RIGHTS.  This Warrant in
and of itself shall not entitle the Holder to any voting rights or other rights
as a stockholder of the Company.

 

9.             TRANSFER
OF WARRANT.  Subject to applicable
laws and the restriction on transfer set forth on the first page of this
Warrant, this Warrant and all rights hereunder are transferable, by the Holder
in person or by duly authorized attorney, upon delivery of this Warrant and the
form of assignment attached hereto to any transferee designated by Holder.  The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the Company and its
counsel.

 

10.          LOST,
STOLEN, MUTILATED OR DESTROYED WARRANT.  If
this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such
terms as to indemnity or otherwise as it may reasonably impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed.  Any such new
Warrant shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall
be at any time enforceable by anyone.

 

11.          NOTICES,
ETC.  All notices required or
permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
telex or facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (c) five days after having been sent
by registered or certified mail, return receipt requested, postage prepaid, or (d) one
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.  All communications shall be sent to the
Company at the address listed on the signature page hereto and to Holder
at the applicable address set forth on the applicable signature page to
the Purchase Agreement or at such other address as the Company or Holder may
designate by 10 days advance written notice to the other parties hereto.

 

12.          ACCEPTANCE.  Receipt of this Warrant by the Holder
shall constitute acceptance of and agreement to all of the terms and conditions
contained herein.

 

13.          GOVERNING
LAW.  This Warrant and all rights,
obligations and liabilities hereunder shall be governed by the laws of the
State of California.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

7

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer as of April 16, 2008.

 

	
   

  	
  METABASIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Paul K. Laikind

  
	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
	
   

  	
  Address:

  	
  11119 North
  Torrey Pines Road

  
	
   

  	
   

  	
  La Jolla,
  California 92037

  
					

 

 

[SIGNATURE PAGE TO
WARRANT TO PURCHASE COMMON STOCK]

 

 

NOTICE OF EXERCISE

 

TO: 
METABASIS THERAPEUTICS, INC.

 

(1)         o              The undersigned hereby elects to
purchase                 
shares of the Common Stock of METABASIS THERAPEUTICS,
INC.  (the “Company”) pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.

 

              o              The undersigned hereby elects to
purchase                 
shares of Common Stock of the Company pursuant to the terms of the net exercise
provisions set forth in Section 2.1 of the attached Warrant, and shall
tender payment of all applicable transfer taxes, if any.

 

(2)           Please issue a certificate or certificates representing
said shares of Common Stock of the Company in the name of the undersigned or in
such other name as is specified below:

 

 

(Name)

 

 

 

(Address)

 

(3)           The undersigned represents that (i) the aforesaid
shares of Common Stock are being acquired for the account of the undersigned
for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned is aware of the
Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the undersigned is
experienced in making investments of this type and has such knowledge and
background in financial and business matters that the undersigned is capable of
evaluating the merits and risks of this investment and protecting the
undersigned’s own interests; (iv) the undersigned understands that the
shares of Common Stock issuable upon exercise of this Warrant have not been
registered (except to the extent a registration statement pursuant to and as
contemplated by Article 1 of the Registration Rights Agreement is
effective) under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a
specific exemption from the registration provisions of the Securities Act,
which exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
shares of Common Stock may not be sold pursuant to Rule 144 adopted under
the Securities Act unless certain conditions are met and until the undersigned
has held the shares for the period of time prescribed by Rule 144, that
among the conditions for use of the Rule is the availability of current
information to the public 

 

 

about the Company; and (vi) the undersigned agrees not to make any
disposition of all or any part of the aforesaid shares of Common Stock unless
and until there is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with said registration statement, or the undersigned has provided
upon the Company’s reasonable request, an opinion of counsel satisfactory to
the Company, stating that such registration is not required.

 

 

	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print name)

  

 

 

ASSIGNMENT FORM

 

(To assign the
foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  (Please Print)

  
	
   

  
	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
  (Please Print)

  
	
   

  
	
  Dated:
                      ,
  20    

  
	
   

  
	
  Holder’s

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
  Holder’s

  	
   

  
	
  Address:

  	
   

  	
   

  
				

 

 

NOTE:  The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatever.  Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.Exhibit 10.1

 

METABASIS
EMPLOYEE INCENTIVE

COMPENSATION PLAN FOR 2008

 

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 or President

  	
   

  	
  50

  	
  %

  
	
  Executive VP

  	
   

  	
  40

  	
  %

  
	
  Senior, Officer VP

  	
   

  	
  35

  	
  %

  
	
  Vice President

  	
   

  	
  20

  	
  %

  
	
  Director

  	
   

  	
  15

  	
  %

  

 

 

	
  TITLE

  	
   

  	
  BONUS

  TARGET

  	
   

  
	
  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 2008 are:

  

 

	
  TITLE

  	
   

  	
  COMPANY

  	
   

  	
  INDIVIDUAL

  	
   

  
	
  CEO or President

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  
	
  Executive, Senior, 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 MEASUREMENT

  	
   

  	
  PERCENT

  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 participant’s
  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 employee’s
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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]