8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 4, 2007

Kosan Biosciences Incorporated

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-31633	94-3217016
(Commission File Number)	(IRS Employer Identification No.)

3832 Bay Center Place, Hayward, CA 94545

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (510) 732-8400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2008 Salary Information for Named Executive Officers

On December 4, 2007, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Kosan Biosciences Incorporated (the “Company”) approved annual salaries for 2008 for the Company’s “named executive officers” (as defined under applicable securities laws) in the amounts as set forth on Exhibit 10.43 to this Current Report on Form 8-K, which is incorporated by reference herein.

2008 Executive Officer Cash Bonus Plan

On December 4, 2007, the Compensation Committee approved the Company’s 2008 Executive Officer Cash Bonus Plan (the “2008 Bonus Plan”). A summary of the 2008 Bonus Plan is set forth on Exhibit 10.44 to this Current Report on Form 8-K, which is incorporated by reference herein.

Also on December 4, 2007, the Compensation Committee designated for each of the Company’s executive officers a target cash bonus amount under the 2008 Bonus Plan. The target cash bonus amounts under the 2008 Bonus Plan for each of the Company’s named executive officers are as set forth on Exhibit 10.43 to this Current Report on Form 8-K, which is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Number	Description
10.43	2008 Compensation Information for Named Executive Officers
10.44	Summary of 2008 Executive Officer Cash Bonus Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Kosan Biosciences Incorporated
Dated: December 9, 2007	By:	/s/ Gary S. Titus
		Gary S. Titus
		Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Number	Description
10.43	2008 Compensation Information for Named Executive Officers
10.44	Summary of 2008 Executive Officer Cash Bonus Plan

EX-10.43

Exhibit 10.43

2008 COMPENSATION INFORMATION FOR NAMED EXECUTIVE OFFICERS

The table below provides information regarding the 2008 annual base salary for each named executive officer of Kosan Biosciences Incorporated (the “Company”). Also listed in the table below are the target cash bonus amounts for each of the Company’s named executive officer under the Company’s 2008 Executive Officer Cash Bonus Plan.

Named Executive Officer	2008 Annual Base Salary	2008 Target Cash Bonus Amount(1)(2)
Robert G. Johnson, Jr., M.D., Ph.D. President and Chief Executive Officer	430,000	45	%
Gary S. Titus Senior Vice President and Chief Financial Officer	322,000	35	%
Peter J. Licari, Ph.D. Senior Vice President, Manufacturing and Operations	270,000	35	%
Pieter B.M.W.M. Timmermans, Ph.D. Senior Vice President, Drug Discovery and Preclinical Research	270,000	35	%

(1) Each target cash bonus amount is expressed as a percentage of the respective named executive officer’s 2008 annual base salary.

(2) Target cash bonus amounts are based on 100% achievement of corporate objectives and, if applicable, individual performance objectives. Actual bonus payments (if any) may represent a higher or lower percentage of the named executive officer’s 2008 annual base salary, depending on the extent to which actual performance meets, exceeds or falls short of the specified corporate objectives and applicable individual performance objectives, as determined by the Compensation Committee in its discretion.

EX-10.44

Exhibit 10.44

SUMMARY OF 2008 EXECUTIVE OFFICER CASH BONUS PLAN

Overview and Purpose

This plan (the “2008 Bonus Plan”) was adopted by the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Kosan Biosciences Incorporated (the “Company”) on December 4, 2007 and is designed to offer incentive compensation to the Chief Executive Officer and Senior Vice Presidents of the Company by rewarding the achievement of specifically measured corporate objectives and, if applicable, individual performance objectives.

Administration

The 2008 Bonus Plan will be administered by the Compensation Committee. The Compensation Committee will be responsible for approving, or recommending to the Board of Directors for approval, any cash incentive awards to executive officers of the Company, including any incentive awards to the Chief Executive Officer.

Eligibility

The Chief Executive Officer and Senior Vice Presidents of the Company are eligible to participate in the 2008 Bonus Plan.

Corporate and Individual Performance

The 2008 Bonus Plan provides for the payment of cash bonuses to participants for the achievement of corporate objectives relating to certain clinical and partnering goals determined by the Compensation Committee. Each participant, other than the Chief Executive Officer, will also be subject to key individual performance objectives. The actual bonuses payable for 2008 (if any) will vary depending on the extent to which actual performance meets, exceeds or falls short of the corporate objectives and, other than with respect to the Chief Executive Officer, applicable individual performance objectives approved by the Compensation Committee, as determined by the Compensation Committee in its discretion, and on the level of the Company’s then current or anticipated cash reserves. The Company’s Board of Directors or the Compensation Committee reserves the right to modify the corporate or individual performance objectives at any time based on business changes during the year.

Target Cash Bonus Amount

The 2008 Bonus Plan provides a target cash bonus amount for the Chief Executive Officer and each Senior Vice President of the Company, expressed as a percentage of 2008 annual base salary for each participant.