Exhibit 10.27

FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT

This amendment dated and effective December 31, 2008 (this “Amendment”) hereby
amends that certain Employment Agreement dated as of June 1, 1997 (the “Original
Agreement”) by and between Sangamo BioSciences, Inc. (the “Company”), and Edward
O. Lanphier II (the “Employee”).

Capitalized terms used and not otherwise defined herein shall have the
respective meanings set forth in the Original Agreement.

RECITALS

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), places certain restrictions, among other things, as to the timing of
distributions from nonqualified deferred compensation plans and arrangements;
and

WHEREAS, the Employee and the Board of Directors of the Company desire to amend
the terms and conditions of the Original Agreement so as to bring those terms
and conditions into documentary compliance with Section 409A of the Code and the
final Treasury Regulations thereunder and to continue Employee’s employment with
the Company upon those amended and restated terms and conditions.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
parties hereto hereby agree as follows:

1. The definition of “Without Cause” in Section 1.d. of the Original Agreement
is hereby deleted, and the following new definition of “Good Reason” is hereby
inserted in its place:

“Good Reason” means Employee’s resignation following any one of the following:

(i) a material reduction in the Employee’s duties, responsibilities and status
with the Company without Employee’s prior written consent;

(ii) a material reduction in the Employee’s base salary without Employee’s prior
written consent (except pursuant to Company mandated pay cuts or pay reductions
which are uniformly applied to the Company’s management);

(iii) a material change in Employee’s place of employment without Employee’s
prior written consent, with a requirement that the Employee be based at a
location which is both more than 40 miles from the Company’s headquarters in
Richmond, California and increases the distance between the Employee’s residence
and the new location by more than 40 miles to be material for such purpose; or

(iv) the failure of the successor corporation (or parent thereof) in a Change in
Control transaction to assume all of the obligations of the Company under this
Agreement;

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provided, however, Employee will only be deemed to have resigned for Good Reason
if (A) Employee provides written notice to the Company of the existence of the
Good Reason event under subparagraph (i), (ii), (iii) or (iv) within ninety
(90) days after its initial occurrence, (B) the Company is provided with thirty
(30) days in which to cure such Good Reason event, and (C) Employee’s
termination of employment is effected within one hundred eighty (180) days
following the occurrence of the non-cured subparagraph (i) – (iv) event.”

2. The definition of “Change of Control” in Section 1.f. of the Original
Agreement is hereby removed in its entirety and is replaced with the following
definition:

“Change of Control” solely for purposes of this Agreement shall mean any
transaction or series of related transactions in which (i) substantially all of
the assets of the Company are sold; or (ii) any merger, reorganization or
acquisition in which the stockholders of the Company immediately prior to such
transaction beneficially own securities representing less than fifty-one percent
(51%) of the total combined voting power of the outstanding voting securities of
the successor corporation (or any parent thereof) immediately after such
transaction.

3. The following definition of “Separation from Service” is hereby added to the
Original Agreement as new Section 1.h.:

“Separation from Service” shall mean Employee’s cessation of Employee Status and
shall be deemed to occur at such time as the level of the bona fide services
Employee is to perform in Employee Status (or as a consultant or other
independent contractor) permanently decreases to a level that is not more than
twenty percent (20%) of the average level of services Employee rendered in
Employee Status during the immediately preceding thirty-six (36) months (or such
shorter period for which Employee may have rendered such service). Any such
determination as to Separation from Service, however, shall be made in
accordance with the applicable standards of the Treasury Regulations issued
under Code Section 409A. For purposes of determining whether Employee has
incurred a Separation from Service, Employee will be deemed to continue in
“Employee Status” for so long as he remains in the employ of one or more members
of the Employer Group, subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance. “Employer Group” means the Corporation and any other corporation or
business controlled by, controlling or under common control with, the
Corporation as determined in accordance with Sections 414(b) and (c) of the Code
and the Treasury Regulations thereunder, except that in applying Sections
1563(a)(1), (2) and (3) for purposes of determining the controlled group of
corporations under Section 414(b), the phrase “at least 50 percent” shall be
used instead of “at least 80 percent” each place the latter phrase appears in
such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for
purposes of determining trades or businesses that are under common control for
purposes of Section 414(c), the phrase “at least 50 percent” shall be used
instead of “at least 80 percent” each place the latter phrase appears in Section
1.414(c)-2

 

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of the Treasury Regulations. In addition to the foregoing, a Separation from
Service will not be deemed to have occurred while Employee is on a sick leave or
other bona fide leave of absence if the period of such leave does not exceed six
(6) months or any longer period for which Employee is provided with a right to
reemployment with one or more members of the Employer Group by either statute or
contract; provided, however, that in the event Employee’s leave of absence is
due to any medically determinable physical or mental impairment that can be
expected to result in death or to last for a continuous period of not less than
six (6) months and that causes her to be unable to perform her duties as an
Employee, no Separation from Service shall be deemed to occur during the first
twenty-nine (29) months of such leave. If the period of leave exceeds six
(6) months (or twenty-nine (29) months in the event of disability as indicated
above) and Employee is not provided with a right to reemployment either by
statute or contract, then Employee will be deemed to have a Separation from
Service on the first day immediately following the expiration of such six
(6)-month or twenty-nine (29)-month period.”

4. A new sentence is hereby added to the end of Section 4.b. of the Original
Agreement, as follows:

“Any bonus to which Employee becomes entitled for a particular calendar year
shall be paid in accordance with the terms of the applicable bonus plan, but in
no event shall any such bonus be paid earlier than January 1 or later than
March 31 of the calendar year following the calendar year for which that annual
bonus is earned.”

5. Section 4.c. is hereby deleted in its entirety and replaced with the caption
“Reserved.”

6. 4.d.(1) and 4.d.(2) are hereby deleted in their entirety and replaced with
the caption “Reserved.”

7. Section 5.a. of the Original Agreement is hereby amended in its entirety to
read as follows:

“a. General Rule. Except as otherwise provided in this Agreement, should the
employment of the Employee be terminated without Cause or should the Employee
resign for Good Reason, the Employee shall be entitled to the Severance Benefits
set forth in Section 6. “

8. The following additional language is hereby added at the end of Section 5.b.
of the Original Agreement:

“in accordance with the payment provisions of Section 6.a..”

 

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9. Section 6.a. of the Original Agreement is hereby removed in its entirety and
replaced with the following new section:

“a. The Company may terminate Employee’s employment under this Agreement at any
time, for any reason, with or without Cause by giving written notice of its
intent to terminate such employment. However, in the event the Employee is
terminated by the Company without Cause or in the event the Employee resigns for
Good Reason, the Company shall, as severance compensation, pay to Employee a
lump sum cash payment (the “Severance Benefits”) in an amount equal to the sum
of (i) the Employee’s annual rate of base salary in effect at the time of
Employee’s termination and (ii) a prorated portion of the Employee’s target
bonus for the year of termination based upon the time elapsed between
December 31 of the preceding year and the Employee’s termination date. The lump
sum payment of the Severance Benefits shall be made within the sixty (60) day
period following the date of Employee’s Separation from Service due to such
termination or resignation.”

10. Section 6.b. of the Original Agreement is hereby amended in its entirety to
read as follows:

“b. Continued Benefit Coverage. Provided the Employee and his eligible
dependents elect to continue medical and dental care coverage under the
Company’s group health care plans pursuant to their COBRA rights following his
termination of employment, the Company shall reimburse the Employee for the
costs the Employee incurs to obtain such continued coverage (collectively, the
“Coverage Costs”) for a twelve (12)-month period measured from the first day of
the month following such termination date. During the COBRA continuation period,
such coverage shall be obtained under the Company’s group health care plans.
Following the completion of the COBRA continuation period, such coverage shall
continue under the Company’s group health plans or one or more other plans
providing equivalent coverage. In order to obtain reimbursement for the Coverage
Costs under the applicable plan or plans, the Employee must submit appropriate
evidence to the Company of each periodic payment within sixty (60) days after
the required payment date for those Coverage Costs, and the Company shall within
thirty (30) days after such submission reimburse the Employee for that payment.
To the extent the Employee incurs any other medical or dental care expenses
reimbursable pursuant to the coverage obtained hereunder, the Employee shall
submit appropriate evidence of each such expense to the applicable plan
administrator within sixty (60) days after incurrence of that expense and shall
receive reimbursement of the documented expense within thirty (30) days after
such submission or after any additional period that may be required to perfect
the claim. During the period such medical and dental care coverage remains in
effect hereunder, the following provisions shall govern the arrangement: (a) the
amount of Coverage Costs or other medical or dental care expenses eligible for
reimbursement in any one calendar year of such coverage shall not affect the
amount of Coverage Costs or other medical or dental care expenses eligible for
reimbursement in any other calendar year for which such reimbursement is to be
provided hereunder; (ii) no Coverage Costs or other medical or dental care
expenses shall be reimbursed after the close of the calendar year following the
calendar year in which those Coverage Costs or expenses were

 

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incurred; and (iii) the Employee’s right to the reimbursement of such Coverage
Costs or other medical or dental care expenses cannot be liquidated or exchanged
for any other benefit. To the extent the reimbursed Coverage Costs are treated
as taxable income to the Employee, the Company shall report the reimbursement as
taxable W-2 wages and collect the applicable withholding taxes, and the
resulting tax liability shall be the Employee’s sole responsibility.
Notwithstanding the foregoing, to the maximum extent permitted by law, the
number of months of continued benefit coverage provided to the Employee under
this Section 6.b. shall reduce the number of months of continued coverage that
must be made available to the Employee (and his dependents) under COBRA.”

11. Section 6.c. is hereby deleted in its entirety and replaced with the caption
“Reserved.”

12. The Section 6.d. of the Original Agreement is hereby removed in its entirety
and replaced with the following new section:

“d. The Severance Benefits paid to the Employee shall be reduced by any amount
that the Employee owes to the Company on the date he ceases to be an employee,
if such reduction is legally permissible and only to the extent such reduction
would not otherwise result in a violation of Treasury Regulation
1.409A-3(j)(4)(xiii). Except for any payments for earned but unpaid salary,
accrued but unused vacation, 401(k) Plan distributions, continued health and
dental benefit coverage pursuant to Section 6.b., and the above mentioned
Severance Benefits, if applicable, neither party will be obligated to pay the
other any payment as a result of, or in connection with, the termination of
Employee’s employment with the Company (including but not limited to any salary
or benefits following the date of termination).”

13. The following new Section 8 is hereby added to the Original Agreement:

 

  “8. Section 409A.

a. Notwithstanding any provision in this Agreement the contrary (other than
Section 8.b. below), no payment or distribution under this Agreement which
constitutes an item of deferred compensation under Section 409A of the Internal
Revenue Code of 1986, as amended (the ‘Code’) and becomes payable by reason of
Employee’s termination of employment with the Company will be made to Employee
until Employee incurs a Separation from Service in connection with such
termination of employment. For purposes of this Agreement, each amount to be
paid or reimbursed or benefit to be provided to Employee shall be treated as a
separate identified payment or benefit for purposes of Section 409A of the Code.
In addition, no payment or benefit which constitutes an item of deferred
compensation under Section 409A of the Code (other than the reimbursement of
Coverage Costs attributable to medical care coverage during the applicable
period of COBRA continuation coverage) and becomes payable by reason of
Employee’s Separation from Service will be made to Employee prior to the earlier
of (i) the first day of the seven (7)-month period measured from the date of
such Separation from Service or (ii) the date of Employee’s death, if

 

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Employee is deemed at the time of such Separation from Service to be a specified
employee (as determined pursuant to Code Section 409A and the Treasury
Regulations thereunder) and such delayed commencement is otherwise required in
order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the
expiration of the applicable deferral period, all payments and benefits deferred
pursuant to this Section 8.a. (whether they would have otherwise been payable in
a single sum or in installments in the absence of such deferral) shall be paid
or provided to Employee in a lump sum on the first day of the seventh
(7th) month after the date of Employee’s Separation from Service or, if earlier,
the first day of the month immediately following the date the Company receives
proof of Employee’s death. Any remaining payments or benefits due under this
Agreement will be paid in accordance with the normal payment dates specified
herein.

b. Notwithstanding Section 8.a. above, the following provisions shall also be
applicable to Employee if Employee is a specified employee at the time of his
Separation from Service:

(1) Any payments or benefits which become due and payable to Employee during the
period beginning with the date of Employee’s Separation from Service and ending
on March 15 of the following calendar year shall not be subject to the holdback
provisions of Section 8.a. and shall accordingly be paid as and when they become
due and payable under this Agreement in accordance with the short-term deferral
exception to Code Section 409A.

(2) The remaining portion of the payments and benefits to which Employee becomes
entitled under this Agreement, to the extent they do not in the aggregate exceed
the dollar limit described below and are otherwise scheduled to be paid no later
than the last day of the second calendar year following the calendar year in
which Employee’s Separation from Service occurs, shall not be subject to any
deferred commencement date under Section 8.a. and shall be paid to Employee as
they become due and payable under this Agreement. For purposes of this
subparagraph (2), the applicable dollar limitation will be equal to two times
the lesser of (i) Employee’s annualized compensation (based on Employee’s annual
rate of pay for the calendar year preceding the calendar year of Employee’s
Separation from Service, adjusted to reflect any increase during that calendar
year which was expected to continue indefinitely had such Separation from
Service not occurred) or (ii) the compensation limit under Section 401(a)(17) of
the Code as in effect in the year of such Separation from Service. To the extent
the portion of the severance payments and benefits to which Employee would
otherwise be entitled under this Agreement during the deferral period under
Section 8.a. exceeds the foregoing dollar limitation, such excess shall be paid
in a lump sum upon the expiration of that deferral period, in accordance with
the deferred payment provisions of Section 8.a., and the remaining severance
payments and benefits (if any) shall be paid in accordance with the normal
payment dates specified for them herein.

 

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(3) The holdback provisions of Section 8.a. shall not be applicable to the
reimbursement of any Coverage Costs attributable to dental care coverage during
the six (6)-month period measured from Employee’s Separation from Service, to
the extent the aggregate amount of those Coverage Costs for such period does not
exceed the applicable dollar amount in effect under Section 402(g)(1)(B) of the
Code for the calendar year in which the Employee’s Separation from Service
occurs. However, to the extent the Coverage Costs attributable to dental care
coverage that would otherwise be reimbursable by the Company for each month
within that six (6) month period would otherwise exceed one-sixth of the
applicable Code Section 402(g)(1)(B) dollar amount, Employee shall pay that
excess portion of such Coverage Costs, and the Company shall reimburse Executive
for those payments upon the expiration of the holdback period.”

14. New Section 7.f. is hereby added to the Original Agreement as follows:

“(f) Code Section 409A. To the extent there is any ambiguity as to whether any
provision of the Original Agreement as amended by this Amendment Agreement would
otherwise contravene one or more requirements or limitations of Code
Section 409A, such provisions shall be interpreted and applied in a manner that
does not result in a violation of the applicable requirements or limitations of
Code Section 409A and the Treasury Regulations thereunder.”

15. Except as modified by this Amendment Agreement, all the terms and provisions
of the Original Agreement shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.

 

SANGAMO BIOSCIENCES, INC. By:   /s/ H. Ward Wolff Title:   Executive Vice
President and Chief Financial Officer Dated:   December 31, 2008 By:   /s/
Edward O. Lanphier II   Edward O. Lanphier II Dated:   December 31, 2008

 

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