EXHIBIT 10.4

[Cell Genesys, Inc. Letterhead]

April     , 2009

Marc Belsky

c/o Cell Genesys, Inc.

400 Oyster Point Boulevard, Suite 525

South San Francisco, CA 94080

Dear Marc:

This letter sets forth the agreement between you and Cell Genesys, Inc. (the
“Company”) regarding the terms of your retention payment opportunity.

1. If you continue to be employed with the Company through the twelve-month
period commencing on May 1, 2009 and ending on April 30, 2010 (the “Retention
Period”) and a Change of Control does not occur at any time during the Retention
Period, you will be entitled to receive a retention payment of Three Hundred
Sixty Thousand Dollars ($360,000) (the “Payment Amount”), such payment to be
made, subject to applicable withholding, in a lump sum within five business days
after the end of the Retention Period. If, during the Retention Period, your
employment terminates for any reason or a Change of Control of the Company
occurs, you will not be entitled to a retention payment under this paragraph 1,
although you may be entitled to a payment under either paragraph 2 or paragraph
3 below, as applicable in the circumstances.

2. If your employment is terminated during the Retention Period either by the
Company without Cause (as defined in the attached Exhibit A) or as a result of
an Involuntary Termination (as defined in the attached Exhibit A), and in either
case other than due to your death or Disability, you will be entitled to receive
an amount equal to the Payment Amount, subject to applicable withholding, in a
lump sum within 30 calendar days after the date on which your employment
terminates; provided, however, that your right to receive such payment shall be
contingent upon your execution and delivery to the Company of a release of
claims in a form acceptable to the Company promptly following your termination
and your not revoking such release within any revocation period provided under
applicable law. You hereby acknowledge that, solely for purposes of this letter
agreement, no event that has occurred prior to the date of this letter agreement
shall constitute grounds for an Involuntary Termination of your employment under
this letter agreement.

3. If a Change of Control (as defined in the attached Exhibit A) occurs during
the Retention Period and you continue to be employed with the Company through
the date of the Change of Control, you will be entitled to receive an amount
equal to (1) the Payment Amount, multiplied by (2) a fraction (not greater than
one), the numerator of which shall be the number of days during the Retention
Period through the date of the Change of Control, and the denominator of which
shall be 365, such payment to be made, subject to applicable withholding, in a
lump sum within five business days after the Change of Control date.

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4. In no event will you be entitled to receive a payment under more than one of
the foregoing three paragraphs.

5. To secure the obligations of the Company herein, the Company agrees to enter
into a letter of credit agreement with you substantially in the form of Exhibit
B hereto (“Letter of Credit Agreement”). The Company and you agree that any
obligations of the Company under this letter agreement may be satisfied in full
by payment to you pursuant to the terms and conditions set forth in the Letter
of Credit Agreement.

6. Nothing contained in this letter agreement constitutes an employment or
service commitment by the Company (or any of its affiliates), affects your
status as an employee at will who is subject to termination without cause at any
time, or interferes in any way with the Company’s right (or the right of its
affiliates) to change your compensation or other terms of employment at any
time. This letter agreement may be amended only by a written agreement, signed
by an authorized officer of the Company other than you, that expressly refers to
this letter agreement. This letter agreement and the Letter of Credit Agreement
contain all of the terms and conditions of your retention payment opportunity
under this letter agreement and supersede all prior understandings and
agreements, written or oral, between you and the Company with respect to your
retention payment opportunity, except insofar as Section 5 of your Change of
Control Severance Agreement (your “Change of Control Agreement”) with the
Company dated as of October 30, 2007 (which generally provides that if any
benefits payable to you in connection with a change in control of the Company
would be subject to the excise tax imposed under Section 280G of the U.S.
Internal Revenue Code, the benefits will either be paid in full or will be
reduced to the extent necessary to avoid triggering the excise tax, whichever
results in a greater after-tax benefit for you) may apply to any payment payable
to you pursuant to this letter agreement. For purposes of clarity, your Change
of Control Agreement, your indemnification agreement with the Company dated as
of October 30, 2007 and any other agreements you may have with the Company are
outside the scope of the foregoing integration provision and continue in effect
in accordance with their terms.

If this letter accurately sets forth our understanding and agreement as to the
foregoing matters, please acknowledge your agreement with the foregoing by
signing the enclosed copy of this letter and returning it to me.

 

Sincerely,

 

Stephen A. Sherwin, M.D. Chairman of the Board and Chief Executive Officer

 

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Agreed to and Accepted:

By:

 

 

Name:

  Marc Belsky

 

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Exhibit A

For purposes of this letter agreement, the following definitions shall apply:

“Cause” shall mean either (i) any act of personal dishonesty taken by you in
connection with your responsibilities as an employee and intended to result in
your substantial personal enrichment, (ii) your conviction of, or plea of nolo
contendere to, a felony, (iii) a willful act by you which constitutes gross
misconduct and which is injurious to the Company, or (iv) following delivery to
you of a written demand for performance from the Company which describes the
basis for the Company’s belief that you have not substantially performed your
duties, continued violations by you of your obligations to the Company which are
demonstrably willful and deliberate on your part.

“Involuntary Termination” shall mean resignation within 180 days following:
(i) without your express written consent, a material reduction of your duties,
title, authority or responsibilities relative to your duties, title, authority
or responsibilities as in effect immediately prior to such reduction, or the
assignment to you of such reduced duties, title, authority or responsibilities;
(ii) without your express written consent, a material reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to you immediately prior to such reduction; (iii) a material
reduction by the Company in your compensation as in effect immediately prior to
such reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits, including bonuses, to which you were entitled immediately
prior to such reduction with the result that your overall benefits package is
materially reduced; (v) your relocation to a facility or location more than
twenty-five (25) miles from your then present location, without your express
written consent; (vi) any purported termination of you by the Company which is
not effected for Disability or for Cause, or any purported termination for which
the grounds relied upon are not valid; (vii) the failure of the Company to
obtain the assumption of this agreement by any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets; or (viii) any act or set of facts or circumstances which would, under
California case law or statute constitute a constructive termination of you,
provided, however, that none of the actions described above shall give rise to
an “Involuntary Termination” with respect to you if it was an isolated and
inadvertent action not taken in bad faith by the company and if it is remedied
by the Company within thirty (30) days after receipt of written notice thereof
given by you, which such notice must be delivered no later than sixty (60) days
following the occurrence of such. For purposes of this definition, the Company
and you agree that any reduction in base salary shall constitute a material
reduction in compensation.

“Change of Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities;

 

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(ii) A change in the composition of the Company’s Board of Directors (the
“Board”) occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board with the
affirmative votes (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for election
as a director without objection to such nomination) of at least a majority of
the Incumbent Directors at the time of such election or nomination;

(iii) The consummation of a merger or consolidation of the Company with any
other corporation, other than the merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or the entity that controls the
Company or controls such surviving entity) at least fifty percent (50%) of the
total voting power represented by the voting securities of the Company or such
surviving entity or the voting power represented by the voting securities of the
Company or such surviving entity or the entity that controls the Company or
controls such surviving entity outstanding immediately after such merger or
consolidation; or

(iv) The consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets.

“Disability” shall mean you have been unable to perform the essential functions
of your Company duties, with or without reasonable accomodation, as a result of
your incapacity due to physical or mental illness, and such inability, at least
26 weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to you or your
legal representative (such agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least 30 days’ written notice by the Company of its intention to terminate your
employment. In the event that you resume the performance of substantially all of
your duties before the termination of employment becomes effective, the notice
of intent to terminate will be automatically revoked.

 

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Exhibit B

Letter of Credit Agreement

 

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