CYPRESS BIOSCIENCE INC
MATERIAL CONTRACTS
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<TYPE>EX-10.27
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<FILENAME>a06-1977_1ex10d27.htm
<DESCRIPTION>MATERIAL CONTRACTS
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;text-indent:2.0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit&nbsp;10.27</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;text-indent:2.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cypress Bioscience</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2006 Bonus Plan</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">On
February&nbsp;17, 2005, the Compensation Committee of the Board of Directors of
the Company adopted a Bonus Plan for the officers of the Company. The Bonus
Plan was adopted to </font>provide an outcome-based annual cash incentive to
the officers of the Company. Pursuant to the Bonus Plan, the officers of the
Company are eligible to receive cash bonuses up to between 25% to 66 2/3% of
base salary, depending on the applicable participant&#146;s position at the Company,
for the year ended December&nbsp;31, 2006. The portion of the bonus earned, if
any, is contingent upon the Company&#146;s achievement of certain corporate goals
related to new product opportunities and an increase in stockholder value. The
Compensation Committee established these corporate goals and the timelines for
their achievement at the February&nbsp;17<sup>th</sup> meeting. Individual
awards will be pro rated for a partial year of service. Awards, if any, will be
paid upon achievement of the corporate goals established by the Compensation
Committee. These awards are only payable if the participant continues to be
employed on the date of payment.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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