Cubist Pharmaceuticals (CBST)

Equity Granting Practices

        We have never had a program or policy in place to coordinate equity grants with the release of material, non-public information.

        We issue stock option awards to our employees at various times throughout the year. All options are priced at the closing market price of our common stock on the grant date. Generally, new employees receive a stock option award that is granted and priced on the 15^th day of the month following the month in which they join the company (or, if no trades were reported on such date, the closing price on the most recent trading day preceding such date on which a trade occurred). In addition, we typically issue stock options to employees who are promoted during the year. These options are also granted and priced on the 15^th day of the month following the month in which the employee's promotion is authorized (or, if no trades were reported on such date, the closing price on the most recent trading day preceding such date on which a trade occurred). We also issue performance-related stock options once each year, after the beginning of the year, to employees who demonstrate superior performance and high potential.

        The Compensation Committee has authorized a pool of options which may be issued by Mr. Bonney from time to time during the year in recognition of extraordinary results. Any such options are granted and priced on the 15^th day of the month following the month in which the award is made (or, if no trades were reported on such date, the closing price on the most recent trading day preceding such date on which a trade occurred).

        As noted above, we will begin awarding restricted stock units to employees in April 2009. These awards will be determined in April 2009 and will have a grant date of May 15, 2009.

        At the end of each calendar year, the Compensation Committee approves guidelines for both new hire stock option awards and for stock options to be granted in connection with promotions. In addition, prior to issuance of any annual performance-related stock options or restricted stock units, the Compensation Committee approves a pool of such stock options and restricted stock units for such performance-related grants. The CEO is required to further approve all individual awards issued in accordance with the foregoing pools and guidelines. The Compensation Committee must approve all awards of stock options and restricted stock units to Executive Officers other than Mr. Bonney and the Board must approve all awards of stock options and restricted stock units to Mr. Bonney.