EXHIBIT 10.2

MAXYGEN, INC.

RETENTION AGREEMENT

This RETENTION AGREEMENT (the “Agreement”), is made by and between MAXYGEN,
INC., a Delaware corporation (the “Company”), and Grant Yonehiro (the
“Executive”) on the terms set forth below.

WHEREAS, concurrently with the execution of this Agreement, the Executive is
entering into an Amended and Restated Change in Control Agreement with the
Company (the “Change in Control Agreement”).

WHEREAS, concurrently with the execution of this Agreement, the Company is
entering into a Master Joint Venture Agreement with Astellas Pharma Inc. and
Astellas Bio Inc., pursuant to which the parties will create a new jointly owned
limited liability company (“Newco”). The closing of the foregoing transaction is
referred to herein as the “Transaction” and closing of the Transaction is
referred to herein as the “Closing Date.”

WHEREAS, concurrently with the execution of this Agreement, the Executive is
entering into an employment offer letter (the “Offer Letter”) with the Company,
on behalf of Newco, a majority owned subsidiary of the Company, pursuant to
which the Executive will become the Chief Executive Officer and President of
Newco.

WHEREAS, the Company desires to reward Executive for successfully implementing
the Transaction, to provide incentives for the Executive to assure that the
Company will have the continued dedication and objectivity of the Executive,
notwithstanding the occurrence of the Transaction, and, notwithstanding the
Executive’s responsibilities to Newco under the terms of the Offer Letter,
create incentives for the Executive to continue providing services to the
Company following the Transaction.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive agree as follows:

1. Effective Date. This Agreement, which shall be binding immediately upon its
execution by the parties, shall go into effect if and only if the Closing occurs
on or prior to December 31, 2009. The Closing Date shall be the “Effective Date”
of this Agreement.

2. Definitions.

(a) “Cause” means the Executive’s: (i) willful and continued failure to
substantially perform the Executive’s duties with the Company (other than as a
result of physical or mental disability or death) after a written demand for
substantial performance is delivered to the Executive by the Company, which
demand specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive’s duties and that has
not been cured within fifteen (15) days following receipt by the Executive of
the written demand; (ii) commission of a felony

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(other than a traffic-related offense) that in the written determination of the
Company is likely to cause or has caused material injury to the Company’s
business; (iii) dishonesty with respect to a significant matter relating to the
Company’s business; or (iv) material breach of any agreement by and between the
Executive and the Company, which material breach has not been cured within
fifteen (15) days following receipt by the Executive of written notice from the
Company identifying such material breach.

(b) “Disability” means Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering Company employees.

(c) “Effective Date” means the date specified in Section 1 above.

(d) “Good Reason” means: (i) the relocation of the Executive to a facility or a
location more than thirty (30) miles from the Executive’s then present business
location, except if agreed to in writing by the Executive; (ii) a material
breach by the Company of any provision of this Agreement; or (iii) any failure
of the Company to obtain the assumption of this Agreement by any successor or
assign of the Company; provided, however, that such events shall not constitute
grounds for a Good Reason termination unless the Executive has provided notice
to the Company of the existence of the one or more of the above conditions
within ninety (90) days of its initial existence, the Company has been provided
at least thirty (30) days to remedy the condition and the effective date of the
Executive’s resignation is within six months of the initial occurrence or
circumstance giving rise to Good Reason.

3. Retention Payments. Subject to acceleration as provided below, Executive
shall be entitled to receive a lump sum cash retention bonus of $200,000, less
applicable withholding, on each of the first three anniversaries of the Closing
Date (so that the aggregate amount contemplated shall be $600,000), provided
Executive remains employed by the Company or Newco through each such date.

4. Severance Benefits.

(a) Severance Payment. If, prior to the third anniversary of the Closing Date,
(i) the Executive’s employment terminates as a result of (A) his death or
Disability, (B) the Company’s terminating his employment other than for Cause,
or (C) the Executive’s terminating his employment with the Company for Good
Reason, or (ii) the Company’s dissolution or liquidation, then subject to the
Executive (or in the event of the Executive’s death or Disability, his estate or
personal representative, respectively) entering into and not revoking an
Agreement and Release (“Release”) in the form attached as Exhibit C hereto and
such Release becoming effective within thirty (30) days thereafter, Executive
shall be entitled to receive a lump-sum severance payment (less

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applicable withholding taxes) equal to the greater of (1) any remaining unpaid
retention payments under Section 3, or (2) six (6) months of the Executive’s
then applicable base salary from Newco. Subject to Section 14 hereof, such
payment shall be made on the first payroll date following the Executive’s
termination or, if made as a result of the Company’s dissolution or liquidation,
on the effective date of such event.

(b) Medical Benefit Continuation. Upon any termination of employment with the
Company for any or no reason, then subject to Executive entering into and not
revoking a Release and such Release becoming effective within thirty (30) days
thereafter, the Executive shall be entitled to receive continued medical
benefits as provided in Section 6(e).

5. Voluntary Resignation not for Good Reason; Termination for Cause. In the
event the Executive’s employment with the Company terminates due to the
Executive’s voluntary termination without Good Reason or by the Company for
Cause, then Executive shall not be entitled to the Severance Payment set forth
in Section 4(a) of this Agreement.

6. Transaction Benefits. Effective as of and contingent upon the closing of the
Transaction (the “Closing”), and subject to Executive remaining employed through
the Closing and entering into and not revoking the Release within thirty
(30) days thereafter (such Release to be in addition to any Release required
under Section 4 above), the Executive shall be entitled to receive the following
payments and benefits:

(a) Transaction Bonus. A lump sum cash payment of Six Hundred Thousand Dollars
($600,000), less applicable withholding, payable on the first payroll date
following the effective date of the Release;

(b) 2009 Performance Bonus. The Executive shall be eligible for and considered
for a bonus (in an amount, if any, determined at the discretion of the Board)
for the 2009 calendar year, which shall be paid at the same time other employees
are considered for a bonus for such calendar year.

(c) Equity Acceleration. Each of the Executive’s outstanding stock options, all
stock subject to repurchase or forfeiture, including without limitation,
restricted stock, restricted stock units and performance shares awards, and any
options, stock subject to repurchase or forfeiture, awards or purchases held in
the name of an estate planning vehicle for the benefit of the Executive or his
or her immediate family, shall have their vesting and exercisability schedule
accelerate in full (or, as applicable, the corresponding repurchase or
forfeiture right shall lapse in full) as of the Closing, provided that the
Company shall deliver shares (or other property including cash that is in the
interim substituted for or distributed with respect to shares of the Company’s
Common Stock, with any such property or cash related to shares underlying vested
but as-yet-unsettled restricted stock units held by the Company or an agent
authorized by the Company for delivery to the Executive) in satisfaction of the
vesting of restricted stock units on their presently scheduled vesting dates of
December 31, 2009 and May 3, 2010 (for the sake of clarification, the restricted
stock units shall vest as of the Closing but

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distribution of the shares or substituted property subject to restricted stock
units will be delayed as set forth above), unless the Executive’s termination of
employment occurs within six months prior to such date, in which case the shares
will be delivered on the date that is six (6) months and one (1) day after such
termination date (or, if sooner, upon the Executive’s death); provided, further,
that if the Executive becomes entitled to benefits under this Section 6, then
all of the Executive’s Company stock options with an exercise price exceeding
$20.00 per share shall automatically be canceled as of the effective date of the
Release.

(d) Extended Exercise Period. The post-termination exercise period of the
Executive’s outstanding stock option and stock appreciation right awards shall
automatically be extended to the end of the original maximum term of such
awards.

(e) Medical Benefit Continuation. If at the time of any termination of the
Executive’s employment with the Company, the Executive is covered by any
Company-paid health plans or programs, then subject to the Executive timely
electing continued group health coverage under Title X of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company
shall pay the 100% of the cost, on behalf of Executive, for Executive’s
continued group health, dental and vision coverage under COBRA for the Executive
and the Executive’s eligible and covered spouse and/or dependents until the
earlier of the end of the period to which the Executive, his spouse and/or
dependents, as the case may be, are entitled to coverage (including as a result
of any subsequent qualifying event that occurs and extends coverage for a person
covered hereunder following the termination date) with respect to the Company’s
group health, dental and vision plans under COBRA following the Termination
Date, or the date that the Executive and his spouse and/or dependents become
covered under another employer’s group health plans or programs that provide the
Executive and his or her spouse and/or dependents with comparable benefits and
levels of coverage.

7. Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable or benefits
provided to the Executive under this Agreement, nor shall any such payments or
benefits be reduced by any earnings or benefits that the Executive may receive
from any other source.

8. Consulting Duties. The Executive agrees to enter into a consulting agreement
in the form attached as Exhibit A (the “Consulting Agreement”) with the Company,
to become effective immediately following Executive’s termination of employment
with the Company.

9. Limitations and Conditions on Benefits. The benefits and payments provided
under this Agreement shall be subject to the following terms and limitations:

(a) Withholding Taxes. The Company shall withhold required foreign, federal,
state and local income and employment taxes from any payments hereunder.

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(b) Confidential Information, Secrecy and Invention Agreement Prior to Receipt
of Benefits. The Executive shall have executed and delivered to the Company, a
standard form of the Company’s confidential information, secrecy and invention
agreement, a copy of the current form of which is attached as Exhibit B (the
“Confidential Information, Secrecy and Invention Agreement”), prior to the
receipt or provision of any benefits (including the acceleration benefits) under
this Agreement. Additionally, the Executive agrees that all documents, records,
apparatus, equipment and other physical property that is furnished to or
obtained by the Executive in the course of his or her employment with the
Company shall be and shall remain the sole property of the Company. The
Executive agrees not to make or retain copies, reproductions or summaries of any
such property, except as otherwise necessary while acting in the normal course
of business. In the event of any material breach by the Executive of the
Confidential Information, Secrecy and Invention Agreement that is not cured
within thirty (30) days of notice of such breach to the Executive, all benefits
payable under this Agreement shall immediately terminate and all outstanding
stock options shall immediately be canceled.

(c) Non-Competition and Non-Solicitation Agreement. As a condition of the
receipt of any benefits under this Agreement on account of the Executive’s
termination of employment with the Company, the Executive shall, as of the date
of such termination, enter into a non-competition and non-solicitation agreement
in the form attached as Exhibit D (the “Non-Competition and Non-Solicitation
Agreement”). In the event of any breach by the Executive of the Non-Competition
and Non-Solicitation Agreement, all benefits payable under this Agreement shall
immediately terminate and all outstanding stock options shall immediately be
canceled, and that shall be the sole remedy to the Company for such breach.

(d) Consulting Agreement. In the event of any breach by the Executive of the
Consulting Agreement, all benefits payable under this Agreement shall
immediately terminate and all outstanding stock options shall immediately be
canceled.

10. At-Will Employment. The Company and the Executive acknowledge that the
Executive’s employment is and shall continue to be at-will, as defined under
applicable law. This Agreement shall not be construed as creating an express or
implied contract of employment between the Executive and the Company. The
Executive shall not have any right to be retained in the employment of the
Company.

11. Notices. Any notice provided under this Agreement shall be in writing and
shall be deemed to have been effectively given (i) upon receipt when delivered
personally, (ii) one day after sending when sent by express mail service (such
as Federal Express), or (iii) five (5) days after sending when sent by regular
mail to the following address:

 

   In the case of the Company:   

 

  

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

  

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   In the case of the Executive:   

 

  

The last personal residence

address known by the Company

  

or to such other address as the Company or the Executive hereafter designates by
written notice in accordance with this Section 11.

12. Litigation/Arbitration Expenses. Reasonable litigation and/or arbitration
costs and expenses shall be paid by the Company, win or lose, in connection with
any dispute between the Company (and its successors) and the Executive
concerning this Agreement; provided, however, that if the litigation or
arbitration is found to have been commenced in bad faith by the Executive, the
Executive shall bear all of his or her own costs and expenses in connection with
such litigation or arbitration.

13. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by the Executive, and the Company, and any
surviving entity resulting from a Change of Control and upon any other person
who is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company, and their respective successors,
assigns, heirs, executors and administrators, without regard to whether or not
such person actively assumes any rights or duties hereunder; provided, however,
that the Executive may not assign any duties hereunder without the prior written
consent of the Company.

14. Section 409A.

(a) Notwithstanding any provision to the contrary herein, no Deferred
Compensation Separation Payments (as defined below) that becomes payable under
this Agreement by reason of Employee’s termination of employment with the
Company (or any successor entity thereto) will be made unless such termination
of employment constitutes a “separation from service” within the meaning of
Section 409A of the Internal Revenue Code (the “Code”), and any final
regulations and Internal Revenue Service guidance promulgated thereunder
(“Section 409A”). Further, if Executive is a “specified employee” of the Company
(or any successor entity thereto) within the meaning of Section 409A on the date
of Employee’s termination (other than a termination due to death), then the
severance payable to Employee, if any, under this Agreement, when considered
together with any other severance payments or separation benefits that are
considered deferred compensation under Section 409A (collectively, but excluding
any amounts specified in paragraphs (b) or (c) below, the “Deferred Compensation
Separation Payments”) that are payable within the first six (6) months following
Employee’s termination of employment, shall be delayed until the first payroll
date that occurs on or after the date that is six (6) months and one (1) day
after the date of the termination, when they shall be paid in full arrears. All
subsequent Deferred Compensation Separation Payments, if any, shall be paid in
accordance with the payment

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schedule applicable to each payment or benefit. Notwithstanding anything herein
to the contrary, if Executive dies following his termination but prior to the
six (6) month anniversary of his termination, then any Payments delayed in
accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Employee’s death and all other
Payments will be payable in accordance with the payment schedule applicable to
each payment or benefit. Each payment and benefit payable under this Agreement
is intended to constitute a separate payment for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any amounts paid under this Agreement that satisfy the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations will not constitute Deferred Compensation Separation Payments for
purposes of clause (a) above.

(c) Any amount paid under this Agreement that qualifies as a payment made as a
result of an involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the
Section 409A Limit shall not constitute Deferred Compensation Separation
Payments for purposes of clause (ii) above. “Section 409A Limit” will mean the
lesser of two (2) times: (A) Executive’s annualized compensation based upon the
annual rate of pay paid to Executive during the Company’s taxable year preceding
the Company’s taxable year of Executive’s termination of employment as
determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (B) the maximum amount
that may be taken into account under a qualified plan pursuant to
Section 401(a)(17) of the Code for the year in which Executive’s employment is
terminated.

(d) Any taxable reimbursements and/or taxable in-kind benefits provided in this
Agreement shall be made or provided in accordance with the requirements of
Section 409A, including: (i) the amount of any such expense reimbursement or
in-kind benefit provided during a taxable year of the Executive shall not affect
any expenses eligible for reimbursement in any other taxable year; (ii) the
reimbursement of an eligible expense shall be made no later than the last day of
the employee’s taxable year that immediately follows the taxable year in which
the expense was incurred; and (iii) the right to any such reimbursement shall
not be subject to liquidation or exchange for another benefit or payment.

(e) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
in this Agreement will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. The
Company and Executive agree to work together in good faith to consider
amendments to this Agreement and to take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition prior to actual payment to Executive under Section 409A.

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15. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing by each of the
parties.

(b) No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party that
are not expressly set forth in this Agreement. This Agreement replaces and
supersedes in its entirety the Prior Agreement.

(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

16. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, regardless of the law that
might be applied under applicable principles of conflicts of law.

17. Entire Agreement. This Agreement, together with the Employee Agreement and
Release; the Change of Control Agreement; the Confidential Information, Secrecy
and Invention Agreement; the Non-Competition and Non-Solicitation Agreement; the
Consulting Agreement; and the agreements relating to the Executive’s equity
compensation (as modified hereby) represent the entire agreement and
understanding between the Company and the Executive concerning the Executive’s
employment, transition, and potential termination and consulting arrangement
with the Company.

 

MAXYGEN, INC. By:  

/s/ Louis Lange

  Louis Lange   Chairman, Compensation Committee Date: June 30, 2009 THE
EXECUTIVE

/s/ Grant Yonehiro

Grant Yonehiro Date: June 30, 2009

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Exhibit A

to Retention Agreement

MAXYGEN, INC.

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”), effective as of this         day of
            , 20    (the “Effective Date”), is made by and between Maxygen,
Inc., a corporation formed under the laws of the State of Delaware, with offices
at 515 Galveston Drive, Redwood City, CA 94063 (the “Company”) and Grant
Yonehiro, an individual (the “Consultant”).

BACKGROUND

The Consultant is party to Retention Agreement (the “Retention Agreement”) with
the Company dated June 30, 2009. Pursuant to the terms of the Retention
Agreement, the Consultant agrees to enter into this Agreement following
Consultant’s termination as an executive of the Company and to continue to abide
by this Agreement as a condition of receiving certain benefits and payments
under the Retention Agreement. The Company desires to have the Consultant
provide consulting services to the Company, and the Consultant is willing to
provide such consulting services and assistance, on the terms and conditions set
forth below. Accordingly, the parties hereto hereby agree as follows:

1. Consulting Services.

1.1 The Consultant shall advise the Company and its Affiliates and their
respective management, employees and agents regarding the business of the
Company. The Consultant shall at all times retain the right to control the
manner and means of performance hereunder; provided, however, that the
Consultant shall at all times provide the services and otherwise perform his
obligations hereunder in a professional manner, with reasonable skill and care
and in accordance with the terms and conditions of this Agreement.

1.2 From time to time during the term of this Agreement (including any extension
or renewal term thereof) upon request by the Company, the Consultant shall
provide consulting and advisory services to the Company and its Affiliates and
their respective management, employees and agents at reasonable times agreed
upon by the Consultant and the Company at the Company’s offices, or such other
locations as may be agreed upon by the Consultant and the Company. Such
consultation may be provided by telephone, by electronic mail, by
audioconference, by videoconference and/or through written correspondence.

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2. Consideration; Payment.

2.1 In consideration for consulting services provided by the Consultant to the
Company hereunder, the Company shall pay to the Consultant a consulting fee of
$150 per hour for each hour devoted to consulting for the Company as provided
hereunder (“Consulting Hour”). Unless otherwise agreed to in writing by the
parties, the Consultant’s consulting time shall not include travel time.

2.2 In addition to any consulting fees due to the Consultant pursuant to
Section 2.1 above, the Company will reimburse reasonable out-of-pocket expenses
(including reasonable travel expenses) actually incurred by the Consultant in
the course of performing the consulting services hereunder, in compliance with
the Company’s travel policies for its officers and subject to customary written
verification of such expenses in a form reasonably satisfactory to the Company,
within thirty (30) business days after the Company’s receipt from the Consultant
of a proper written invoice therefore.

2.3 The Consultant shall provide to the Company a written invoice of any
services provided by Consultant and the date and time spent on such consulting
services.

2.4 The Consultant and Company agree that the time spent on services Consultant
is expected to perform under this Agreement will not exceed 20% of the average
level of time spent on services Consultant performed for the Company over the
immediately preceding three-year period.

2.5 The Consultant will not be eligible for, nor will participate in, any
health, pension, or other employee benefit plan sponsored or established by the
Company for the benefit of its employees.

3. Term and Termination.

The term of this Agreement will begin on the date the Consultant’s employment
with the Company terminates and the Agreement will continue in full force and
effect until the third anniversary of the Closing Date of the Transaction (as
such terms are defined in the Retention Agreement), unless earlier terminated,
modified, extended or renewed as otherwise provided in this Section 3 (the
“Term”).

The Company may terminate this Agreement for any reason or no reason with at
least ninety (90) days written notice of termination to the Consultant.

This Agreement will terminate automatically upon the Consultant’s death, or in
the event the Consultant becomes disabled and such disability substantially
impairs the Consultant’s ability to carry out his or her obligations hereunder.
In such case, the Company’s obligation to pay ceases after the date of
termination, except for those services actually performed on or prior to the
date of such termination.

This Agreement may be extended or renewed for additional agreed upon periods
upon the written agreement of the parties.

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In the event, following the date (if any) within the Term on which the
Consultant’s employment with Newco (as such term is defined in the Retention
Agreement) terminates for any reason, the Consultant’s obligations under this
Agreement render the Consultant unable to secure employment with a new employer,
then the parties (including any party who succeeds to the Company’s interests as
a result of a Change of Control), shall negotiate in good faith a modification
or earlier termination of this Agreement.

4. Certain Other Contracts.

Notwithstanding anything to the contrary in this Agreement, nothing within the
scope of the Consultant’s employment with Newco shall conflict with this
Agreement.

The Consultant shall not disclose to the Company, or bring onto the Company’s
premises, or induce the Company to use, any information that the Consultant is
obligated to keep confidential pursuant to an existing agreement with any third
party, and nothing in this Agreement will be construed to impose any obligation
on the Consultant to the contrary.

The Consultant shall not perform consulting work hereunder on time that the
Consultant is required to devote to any third party. The Consultant shall not
use the funding, resources and facilities of any third party to perform
consulting work hereunder and shall not perform the consulting work hereunder in
any manner that would give any third party rights to the product of such work.

The Consultant has disclosed and, during the term of this Agreement (including
any extension or renewal term thereof), shall continue to disclose to the Chief
Executive Officer of the Company, or his designee, any conflicts between this
Agreement and any other agreements or obligations binding the Consultant.

The Consultant acknowledges that the Company has not made any agreement or
commitment, or offered to the Consultant any such agreement or commitment,
(i) to have the Consultant perform any additional services, (ii) except as set
forth in the Retention Agreement, to make any other payments to the Consultant,
or (iii) to enter into any other agreement with or commitment to the Consultant.

5. Inventions and Documents; Assignment.

The Consultant shall promptly and fully disclose to the Chief Executive Officer
of the Company (or his designee) any and all work product and intellectual
property, including without limitation any invention, improvement, algorithm,
code, discovery, process, know-how, design right, copyright, mask work, formula,
technique, method, and/or trade secret, whether or not patentable, whether or
not copyrightable, made, discovered, conceived, developed, generated,
contributed to, or first reduced to practice by the Consultant, either alone or
jointly with others, while performing or arising from the services provided
hereunder (collectively, “Inventions”). The Consultant understands and agrees
that all Inventions are and shall remain the exclusive property of the Company
and shall be treated as Confidential Information (as defined in Section 6
below). The

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Consultant agrees to assign and hereby assigns to the Company (or its designee)
all right, title and interest in and to any such Inventions. The Consultant
shall execute all instruments necessary to perfect the assignment of such
Inventions to the Company (or its designee) and to enable the Company or its
designee to apply for, obtain, and enforce patents, copyrights and other
intellectual property rights in any and all countries on such Inventions. The
Consultant hereby irrevocably designates the Secretary of the Company as the
Consultant’s agent and attorney-in-fact to execute and file any such document
and to do all lawful acts necessary to apply for and obtain such patents,
copyrights and other intellectual property rights, and to enforce the Company’s
rights (or the rights of its designee) under this paragraph.

The parties acknowledge that all original works of authorship, including but not
limited to computer software, which are made by the Consultant within the scope
of the consulting services provided to the Company hereunder and which are
protectable by copyright shall be “works made for hire” within the meaning of
the Copyright Law of the United States of America and its related laws contained
in Title 17 of the United States Code and are hereby assigned to Company (or its
designee) pursuant to such laws; provided, however, that in no event shall
anything in this Agreement be construed to render the Consultant an employee of
the Company under any state or local labor or employment laws.

All documents, data and/or other records provided by or obtained from the
Company or created as a result of the consulting services provided hereunder,
including any summary, abstract or excerpt thereof, (the “Documents”) are, will
be and shall remain the Company’s sole property and must be promptly returned to
the Company when this Agreement expires or terminates, as the case may be. Any
copyright in such Documents and any other documents of any other work prepared
for the Company by the Consultant shall be solely owned by the Company.

No royalty or other payment will be due to the Consultant in respect of any
Inventions or the assignment thereof to the Company.

This Section 5 will survive the expiration or termination of this Agreement.

6. Confidentiality.

The Consultant acknowledges that, during the course of performing the consulting
services hereunder, confidential and proprietary information (i) owned by the
Company and/or its Affiliates (e.g., technical information, business plans,
identification or characterization of biological or other materials, results
and/or design of experiments and/or preclinical or clinical testing, financial
analysis or marketing plans), and/or (ii) received by the Company and/or its
Affiliates in confidence from one or more third parties, may, in each case, be
disclosed to the Consultant by or on behalf of the Company, and that in
connection with the consulting activities conducted by Consultant under this
Agreement the Consultant will be developing information and creating work
product related to the Field (e.g. inventions, projects, products, potential
customers, personnel, business plans, finances and/or other commercially
valuable information). All such

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information described in the previous sentence, whatever its form or medium
(whether in written, oral, electronic, or graphic format), shall be referred to
as “Confidential Information.” The Consultant acknowledges and agrees that the
Company’s business area is extremely competitive, that the success of the
Company’s business is dependent in part upon the maintenance of secrecy of
Confidential Information, and that any disclosure of the Confidential
Information would result in serious harm to the Company.

The Consultant agrees that the Confidential Information of the Company will be
used by the Consultant only in connection with the consulting services
hereunder, and will not be used in any way that is detrimental to the Company.

The Consultant agrees to hold in strict confidence and not to disclose, directly
or indirectly, the Confidential Information of the Company to any third person
or entity, other than representatives or agents of the Company.

The term “Confidential Information” does not include information to the extent
that it (i) is or becomes generally available to the public other than through
breach of this Agreement or other wrongful act by the Consultant, (ii) was
already lawfully within the Consultant’s possession prior to being furnished to
the Consultant by or on behalf of the Company hereunder, or (iii) becomes
available to the Consultant on a nonconfidential basis from a third party who
has no obligation of confidentiality to the Company or any of its Affiliates.
Specific Confidential Information shall not be deemed to be within any of the
foregoing exclusions merely because it is within the scope of more general
information within one or more of the exclusions. Further, any combination of
Confidential Information (whether or not combined with non-confidential
information) shall not be deemed to be within the above exceptions merely
because one or more individual items of Confidential Information are within the
above exceptions.

The Consultant may disclose any Confidential Information that is required to be
disclosed by applicable law, government regulation or court order; provided that
if any such disclosure is required, the Consultant shall give the Company
reasonable advance notice of any such contemplated disclosure so that the
Company may seek a protective order or take other action reasonable in light of
the circumstances to prevent and/or limit the scope of any such disclosure.

Upon expiration or termination of this Agreement, the Consultant will promptly
return to the Company or, at the Company’s request, destroy (and provide to the
Company written confirmation of such destruction) all materials containing
Confidential Information as well as data, records, reports and other property,
furnished by the Company to the Consultant or produced by the Consultant in
connection with services rendered hereunder, together with all copies, excerpts,
summaries and abstracts of any of the foregoing. Notwithstanding such return or
destruction, as the case may be, the Consultant shall continue to be bound by
the terms and conditions of this Section 6 for a period of five (5) years after
the termination or expiration of this Agreement. This Section 6 shall survive
the termination or expiration of this Agreement (including any extension or
renewal term thereof).

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7. Use of Equipment and Facilities. If, at any time, the Consultant is required
to work at any of the Company’s premises or use any of its equipment, the
Consultant will comply with all relevant health, safety and security regulations
and related instructions issued by the Company.

8. Use of Name. It is understood by the Consultant that the name of the
Consultant may appear in disclosure documents required by securities laws, and
in other regulatory and administrative filings in the ordinary course of the
Company’s business.

9. No Conflict; Valid and Binding. The Consultant warrants and represents that
(i) neither the execution of this Agreement nor the performance of the
Consultant’s obligations under this Agreement will result in a violation or
breach of any other agreement by which the Consultant is bound, (ii) the
Consultant has the legal power and authority and right to enter into and perform
under this Agreement without violating the rights or obtaining the consent of
any third party, and (iii) the Consultant is entering this Agreement as
principal and not as agent for any other party. The Company represents that this
Agreement has been duly authorized and executed and is a valid and legally
binding obligation of the Company.

10. Notices. Any notice provided under this Agreement shall be in writing and
shall be deemed to have been effectively given (i) upon receipt when delivered
personally, (ii) one day after sending when sent by private courier service
(such as Federal Express), or (iii) five (5) days after sending when sent by
first-class mail (postage prepaid), in each case to the applicable address noted
herein above or to other such address as may have been last designated by the
Company or the Consultant by written notice to the other party as provided
herein.

11. Independent Contractor; Withholding.

The parties agree that the Consultant will at all times be an independent
contractor, and not an agent or an employee, in the performance of the
consulting services hereunder, and nothing in this Agreement shall be construed
or have effect as constituting any relationship of employer and employee or of
partnership between the Company and the Consultant. The Consultant does not have
the power or authority to bind the Company or to assume or create any obligation
or responsibility, express or implied, on the Company’s behalf or in the
Company’s name, and the Consultant shall not represent to any person or entity
that the Consultant has such power or authority. Consultant shall not act as an
agent nor be deemed to be an employee of the Company for the purposes of any
employee benefit program, unemployment benefits, or otherwise.

The Consultant shall provide the Company with his United States Tax
Identification Number (TIN) upon execution of this Agreement. The Company shall
provide the Consultant with an Internal Revenue Service (IRS) Form 1099 in
connection with the performance of the services hereunder. The Consultant
recognizes that no amount will be withheld by the Company from the Consultant’s
compensation for payment of any federal, state, or local taxes or related
payroll deductions of any country, and that the Consultant has sole
responsibility to pay all such taxes, if any, and file all

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such returns as may be required by applicable laws and regulations with respect
to the Consultant’s performance of the consulting services hereunder and receipt
of fees under this Agreement, and the Consultant shall indemnify and hold
harmless the Company from the Consultant’s failure to do so.

12. Assignment; Successors and Assigns. Due to the personal nature of the
services to be rendered by the Consultant hereunder, the Consultant may not
assign this Agreement nor subcontract any of the consulting services to be
performed under this Agreement. The Company may assign all its rights and
liabilities under this Agreement to any of its Affiliates or to a successor to
all or a substantial part of its business or assets without the consent of the
Consultant. Subject to the foregoing, this Agreement will inure to the benefit
of and be binding upon each of the assigns and successors of the respective
parties.

13. Advice of Counsel. Each party represents that it has voluntarily executed
this Agreement having read and fully understood it, and after having the
opportunity to freely consult with counsel or other advisor(s) of each party’s
choice, and each acknowledges and agrees that this Agreement shall not be deemed
to have been drafted by one party or the other and will be construed
accordingly.

14. Severability. If any provision of this Agreement shall be declared invalid,
illegal or unenforceable, such provision shall be severed and the remaining
provisions shall continue in full force and effect.

15. Remedies. The Consultant acknowledges that the Company would have no
adequate remedy at law to enforce Sections 5 and/or 6 hereof. In the event of a
violation by the Consultant of such Sections notwithstanding, the Company shall
have the right to obtain from a court of competent jurisdiction injunctive
relief and/or other similar equitable remedies for any such violation, without
the requirement of posting bond or other similar measures.

16. Indemnity. The Company shall indemnify, defend and hold harmless the
Consultant, from and against all expenses and liabilities arising from any claim
or proceeding brought by any third party, including any shareholder of the
Company, based on or relating to any services performed by Consultant for the
Company pursuant to this Agreement, except to the extent that such expense or
liability is due to the negligence or willful misconduct of Consultant. In the
event that Consultant becomes aware of any claim or proceeding he believes is
subject to this Section 16 he shall promptly notify the Company and cooperate
fully with the Company and its counsel in the defense and/or settlement of any
such claim or proceeding. This Section 16 shall survive the termination or
expiration of this Agreement (including any extension or renewal term thereof).

17. Arbitration. The parties hereby agree that any dispute arising under this
Agreement, or in connection with any breach thereof, shall be finally resolved
through binding arbitration conducted in San Francisco, California, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association by one (1) arbitrator appointed in accordance with such Rules. The
arbitrator shall determine what

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discovery will be permitted, and shall not order or require discovery against
either party of a type or scope that is not permitted against the other party
because of differences in applicable law. The costs of the arbitration shall be
shared equally by the parties, and each party shall bear its own costs and
attorneys’ and witness’ fees. No punitive damages may be granted by the
arbitrator. The parties agree that the arbitrator’s decision shall be the sole,
exclusive and binding remedy between them regarding any and all disputes,
controversies, claims and counterclaims presented to the arbitrator.

18. Governing Law; Entire Agreement; Amendment. This Agreement shall be governed
by the laws of the State of California without reference to the conflicts of
laws principles, represents the entire understanding of the parties with respect
to the subject matter hereof, supersedes and cancels all prior agreements,
understandings, arrangements or representations between the parties with respect
to the consulting services to be provided hereunder, and may only be amended by
written agreement of the parties. Notwithstanding the above, the parties agree
that the Retention Agreement and that certain Confidential Information, Secrecy
and Invention Agreement; Employee Agreement and Release; and Non-Competition and
Non-Solicitation Agreement which were entered into in connection with the
Retention Agreement shall remain in full force and effect.

19. Headings. The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be part of this Agreement,
and shall not be referred to in connection with the construction or
interpretation of this Agreement.

20. Definition of Affiliates. In this Agreement, “Affiliates” means any and all
corporations or other business entities which (directly or indirectly) control,
are controlled by, or are under common control with the Company.

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

 

UNDERSTOOD AND AGREED:          MAXYGEN, INC.     CONSULTANT: By:  

 

    Signature:  

 

   Name:  

 

         Title:  

 

        

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Exhibit B

to Retention Agreement

MAXYGEN, INC.

CONFIDENTIAL INFORMATION, SECRECY AND

INVENTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made effective as of this         day of
            , 20    (the “Effective Date”), by and between Maxygen, Inc., with
principal place of business at 515 Galveston Drive, Redwood City, California
94063 (“MAXYGEN”), and Grant Yonehiro, (the “Receiving Party”), is entered into
in connection with the following facts and circumstances:

WHEREAS, MAXYGEN and the Receiving Party have entered into that certain
Retention Agreement (the “Retention Agreement”) pursuant to which the Receiving
Party agrees to provide certain consulting services to MAXYGEN pursuant to a
consulting agreement (the “Services”);

WHEREAS, pursuant to the Retention Agreement and in connection with the
Services, the Receiving Party further agrees to enter into this Agreement and
continue to abide by its terms as a condition of receiving certain benefits and
payments under the Retention Agreement; and

WHEREAS, both MAXYGEN and the Receiving Party desire to assure the protection
and preservation of the confidential and proprietary nature of information to be
disclosed or made available by MAXYGEN to the Receiving Party.

NOW THEREFORE, in consideration of the following undertakings, the parties
hereby agree as follows:

1. Subject to the other terms of this Agreement, all information disclosed by
MAXYGEN or any subsidiary of MAXYGEN to the Receiving Party hereunder shall be
deemed to be “Confidential Information” of MAXYGEN. Confidential Information may
be disclosed to or developed, learned or acquired by the Receiving Party in the
course of providing Services to MAXYGEN, whether or not related to the Receiving
Party’s duties. Confidential Information is broadly defined, and includes
(i) all information that has or could have commercial value or other utility in
the businesses in which MAXYGEN or a subsidiary is engaged or in which it
contemplates engaging, and (ii) all information that, if disclosed without
authorization, could be detrimental to the interests of MAXYGEN or the entities
with which it has business relationships, whether or not this information is
identified as Confidential Information. Subject to the other terms of this
Agreement, such Confidential Information shall include any and all information
which relates to, refers to or consists of any of MAXYGEN’s or any subsidiary’s
trade secrets, inventions, ideas, compounds, samples, biologic materials,
procedures, processes, formulations, formulae, techniques, data, results,
research projects, development projects, pre-clinical studies, clinical studies,
testing, engineering, manufacturing, quality assurance/control,

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suppliers, regulators, clients, customers, collaborators, contractors,
marketing, promotions, sales, pricing, employees, personnel, finances,
investors, strategies, facilities, business and/or operations, whether conducted
by MAXYGEN on its own or with one or more third parties, and whether disclosed
by MAXYGEN hereunder in written, graphic or electronic form or orally.

2. “Confidential Information” shall not be deemed to include information which
the Receiving Party can demonstrate by competent written evidence: (a) was in
the public domain when disclosed by MAXYGEN or subsequently becomes public
through no act or failure to act on the part of the Receiving Party; (b) was
already known by the Receiving Party when disclosed by MAXYGEN; or (c) was or is
furnished to the Receiving Party by a third party not bound by any
confidentiality obligation or other restriction on disclosure with respect to
such information.

3. The Receiving Party shall maintain in trust and confidence, and shall not
disclose to any third party except with MAXYGEN’s express prior written consent,
any and all Confidential Information, and shall use any and all Confidential
Information only for purposes of performing the Services. The Receiving Party’s
obligations of confidentiality and non-use under this Agreement shall remain in
effect for ten (10) years from the Effective Date. No rights or licenses to
Confidential Information or to any trademark, invention, copyright, patent,
patent application, intellectual property or other property of MAXYGEN are
implied or granted under this Agreement. Nothing herein shall be construed to
obligate either party to enter into any further agreements with the other party.

4. As between the parties, all Confidential Information (including all copies
thereof) shall remain the property of MAXYGEN. After the Receiving Party’s need
for Confidential Information has expired, or promptly upon any request by
MAXYGEN, the Receiving Party shall return to MAXYGEN all copies of Confidential
Information or shall destroy all copies of Confidential Information, and shall
promptly provide a written certification to MAXYGEN of such return or
destruction in compliance with this Agreement.

5. Notwithstanding any other provision of this Agreement, disclosure of
Confidential Information shall not be precluded if such disclosure is required
under applicable law, regulation or valid order of a court or other governmental
body to which the Receiving Party is subject, provided that the Receiving Party
shall have first have given written notice to MAXYGEN of the need for such
disclosure reasonably in advance so that MAXYGEN may (if it elects) seek a
protective order or other confidential treatment of the Confidential
Information. Any disclosure of Confidential Information as permitted under this
Section 5, (i) shall be limited to only that Confidential Information which is
necessary to comply with such law, regulation or order of a court or government
body, and (ii) shall in no way alter the confidential nature of such
Confidential Information for all other purposes.

6. The Receiving Party acknowledges and agrees that it is aware of the
restrictions imposed by the United States federal securities laws and other
applicable foreign and domestic laws on a person possessing material non-public
information about a public company and that the Receiving Party will comply with
such laws.

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7. The Receiving Party will promptly disclose to MAXYGEN any and all formulas,
processes, techniques, data, copyrightable material, improvements and
inventions, whether or not patentable or copyrightable, which the Receiving
Party makes, conceives, learns or reduces to practice, either alone or jointly
with others, which are related to or useful in MAXYGEN’s business, and which
result from the Receiving Party’s performance of the Services or from the
Receiving Party’s use of MAXYGEN’s Confidential Information or facilities
(collectively, “Inventions”).

8. Any and all materials, data, work product, results, reports and any other
information received, generated, derived or provided to MAXYGEN by the Receiving
Party as part of or in connection with the performance of the Services hereunder
shall be and remain the sole property of MAXYGEN. In addition, all Confidential
Information, all Inventions and all patent, copyright and other rights related
thereto shall be and remain the sole property of MAXYGEN. The Receiving Party
hereby assigns to MAXYGEN any rights he or she may have or acquire in any of the
foregoing (including all such Confidential Information, Inventions and all
patent, copyright and other rights related thereto), and the Receiving Party
shall not have any rights to disclose or otherwise use any MAXYGEN property
hereunder except in his or her performance of Services hereunder, or otherwise
only with MAXYGEN’s prior written consent. The Receiving Party shall assist
MAXYGEN (at the latter’s expense) in every proper way (including execution of
patent applications and other documents) to obtain and enforce patents on any
Inventions and to evidence MAXYGEN’s ownership of its property hereunder. The
Receiving Party’s obligation to assist MAXYGEN in obtaining and enforcing
patents will continue beyond the time that the Receiving Party provides Services
to MAXYGEN. MAXYGEN will compensate the Receiving Party at reasonable rates for
the assistance the Receiving Party provides at MAXYGEN’s request after the
Receiving Party has ceased providing Services to MAXYGEN. The Receiving Party
hereby irrevocably appoints MAXYGEN and its duly authorized officers and agents
as the Receiving Party’s agents and attorneys-in-fact to execute and file all
documents and perform all other lawful acts related to the foregoing.

9. It is acknowledged that the Receiving Party may possess certain inventions,
processes, know-how, trade secrets, computer technical expertise and software
and other intellectual property, all of which has been independently developed
without the benefit of any Confidential Information or any other property of
MAXYGEN under this Agreement and which is owned or controlled by the Receiving
Party (collectively, “Receiving Party Property”). The Receiving Party and
MAXYGEN agree that any Receiving Party Property or any improvements thereto
which are used, improved, modified or further developed solely by the Receiving
Party during the Receiving Party’s performance of the Services, which are the
product of the Receiving Party’s technical expertise, which are related to the
Receiving Party’s line of business or the way he or she performs his or her
services, and which do not use or include any Confidential Information or any
other property of MAXYGEN, shall be and remain the property of the Receiving
Party.

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10. The parties agree that money damages would not be a sufficient remedy for
any breach of this Agreement by the Receiving Party and that, in the event of
such a breach, MAXYGEN may be entitled to equitable relief including injunctive
relief and specific performance. Such remedies shall be in addition to any other
remedies at law or in equity available to MAXYGEN.

11. The Receiving Party acknowledges that MAXYGEN is subject to extensive
federal and state laws and regulations, including but not limited to laws and
regulations of the United States Food and Drug Administration (“FDA”), the
International Committee on Harmonization (“ICH”) and other health authorities.
These laws and regulations provide, inter alia, that (a) vendors that provide
MAXYGEN with products, supplies, equipment or services that may be used in the
production or testing of medicines or pharmaceuticals or may affect, process,
interpret or otherwise affect medical or pharmaceutical data, directly or
indirectly, must meet certain regulatory minimum validation requirements and
(b) that MAXYGEN must perform quality assurance audits on any vendors that may
provide such supplies, equipment or services. The Receiving Party agrees to
cooperate with MAXYGEN in satisfying these requirements, as applicable,
including allowing MAXYGEN, the FDA, the ICH and other health authorities to
perform any necessary audits of the Receiving Party’s records and/or facilities
and providing MAXYGEN, the FDA, the ICH and other health authorities with any
necessary information and materials.

12. The Receiving Party acknowledges and agrees that the Receiving Party is not
an employee of MAXYGEN and that this Agreement is not an employment contract of
any type.

13. This Agreement shall be governed by the laws of the State of California,
without regard to its conflicts of laws principles. This Agreement contains the
final, complete and exclusive agreement of the parties relative to the subject
matter hereof, and supersedes any and all prior agreements or understandings
(oral or written) between the parties with respect to the subject matter hereof.
This Agreement may not be changed, modified, amended or supplemented except by
mutual written agreement of both parties. If any of the provisions of this
Agreement are held invalid or unenforceable, unless such invalidity or
unenforceability substantially frustrates the underlying intent and sense of the
remainder of this Agreement, such invalidity or unenforceability shall not
affect the remainder of this Agreement. This Agreement may be signed in one
(1) or more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.

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AGREED TO:     AGREED TO: MAXYGEN, INC.     RECEIVING PARTY By:  

 

    Signature:  

 

Name:  

 

    Name:  

 

Title:  

 

      Date:  

 

     

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Exhibit C

to Retention Agreement

MAXYGEN, INC.

AGREEMENT AND RELEASE

I hereby confirm my obligations under the Confidential Information, Secrecy and
Invention Agreement that I have previously entered into with the Company.

I acknowledge that I have read and understand Section 1542 of the California
Civil Code that reads as follows:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

I hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to my
release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement and Release (the “Release”) and
except for obligations of the Company set forth in the Retention Agreement
entered into between the Company and me, I hereby release, acquit and forever
discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Release (as defined below), including but not limited to:
all such claims and demands directly or indirectly arising out of or in any way
connected with my employment with the Company or the termination of that
employment, including but not limited to, claims of intentional and negligent
infliction of emotional distress, any and all tort claims for personal injury,
claims or demands related to salary, bonuses, commissions, stock, stock options,
or any other ownership interests in the Company, vacation pay, fringe benefits,
expense reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law or cause of action including, but
not limited to, the federal Civil Rights Act of 1964, as amended; the federal
Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal
Americans with Disabilities Act of 1990; the California Fair Employment and
Housing Act, as amended; tort law; contract law; wrongful discharge;
discrimination; fraud; defamation; emotional distress; and breach of the implied
covenant of good faith

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and fair dealing; provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to (i) indemnify
me pursuant to any applicable statute, provision in the Company’s certificate of
incorporation or bylaws, or indemnification agreement and to provide me with
continued coverage under the Company’s directors and officers liability
insurance policy to the same extent that it has provided such coverage to
previously departed officers and directors of the Company or (ii) provide the
benefits to me set forth in the Retention Agreement entered into between the
Company and me; and provided further that this paragraph shall not be effective
as a release to claims which cannot be waived under applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. If and only if I am covered
by ADEA, I further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (A) my waiver and release do not apply to any rights
or claims that may arise after the Effective Date of this Release; (B) I have
the right to consult with an attorney prior to executing this Release; (c) I
have twenty-one (21) days to consider this Release (although I may choose to
voluntarily execute this Release earlier); (D) I have seven (7) days following
the execution of this Release to revoke the Release; and (E) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the eighth day after this Release is executed by me (the
“Effective Date”). If I am not covered by ADEA, I acknowledge that this
Agreement shall be effective as of the date upon which this Release has been
executed by me (the “Effective Date”).

 

By:  

 

                          THE EXECUTIVE Date:  

 

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Exhibit D

to Retention Agreement

MAXYGEN, INC.

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

This Non-Competition and Non-Solicitation Agreement (this “Agreement”) is being
executed and delivered as of             , 20     by Grant Yonehiro
(“Executive”) in favor and for the benefit of Maxygen, Inc. (“Company”).

WHEREAS, the Company is entering into a Master Joint Venture Agreement with
Astellas Pharma Inc. and Astellas Bio Inc., pursuant to which the parties will
create a new jointly owned limited liability company, CPC, LLC (“Newco” and the
transaction between the Company, Astellas Pharma Inc and Astellas Bio Inc. the
“Transaction”);

WHEREAS, Executive has entered into that certain Retention Agreement (“Retention
Agreement”) with the Company, pursuant to which Executive may receive
substantial benefits in connection with the Transaction, subject to certain
conditions including Executive’s entering into and not breaching this Agreement.

WHEREAS, in consideration of the benefits payable under the Retention Agreement,
Executive agrees to enter into this Agreement effective as of the date of the
date of Executive’s termination of employment with the Company (the “Effective
Time”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive agree as follows:

1. Effective Date; General. This Agreement shall be effective as of the
Effective Time. The parties acknowledge that the Executive is party to an
employment offer letter dated June 26, 2009 with the Company, acting on behalf
of Newco, pursuant to which the Executive will become Chief Executive Officer
and President of Newco (the “Offer Letter”), and acknowledge and agree that
nothing in connection with the Executive’s performance of services to Newco
whether under the Offer Letter or otherwise shall be deemed to be a breach of
this Agreement or otherwise conflict with his obligations hereunder.

2. Noncompetition. During the period commencing on the Effective Time and ending
on the 36-month anniversary of the Closing Date (as defined in the Retention
Agreement and such period, the “Non-Competition Period”), the Executive shall
not (other than in connection with any services to Company or Newco, or their
respective successors, affiliates or assigns), without the prior written consent
of Company, directly or indirectly:

(a) engage, anywhere in the Restricted Territory (as defined below), in any
business (including research and development), operations, activities and/or
services that are related to the products and services of the Company as such
exist immediately prior to the Closing that include the use of DNA shuffling
recombination technology or the business (including research and development),
operations, activities and/or services that are related to the products and
services of the Newco as such exist immediately prior to the Effective Time
(“Competing Business Purpose”);

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(b) be or become an officer, director, stockholder, owner, affiliate,
salesperson, co-owner, partner, trustee, promoter, technician, engineer,
analyst, employee, agent, representative, supplier, contractor, consultant,
advisor or manager of or to, or otherwise acquire or hold any interest in, or
participate in or facilitate the financing, operation, management or control of,
any firm, partnership, corporation, person, entity or business that engages or
participates in a Competing Business Purpose in the Restricted Territory; or

(c) contact, solicit or communicate with Company’s customers in connection with
a Competing Business Purpose;

provided, however, that nothing in this Agreement shall prevent or restrict
Executive from any of the following: (i) owning as a passive investment less
than 1% of the outstanding shares of the capital stock of a corporation (whether
public or private) that is engaged in a Competing Business Purpose and Executive
is not otherwise associated with such corporation; (ii) performing speaking
engagements and receiving honoraria in connection with such engagements;
(iii) being employed by any government agency, college, university or other
non-profit research organization; (iv) owning a passive equity interest in a
private debt or equity investment fund in which the Executive does not have the
ability to control or exercise any managerial influence over such fund;
(v) becoming an employee, director, agent, representative, supplier, contractor,
consultant, advisor or manager of or to an Entity that engages or participates
in a Competing Business Purpose in the Restricted Territory, if such Entity has
more than one distinct business units and Executive is not employed in or
providing services to a business unit of such Entity that engages or
participates in a Competing Business Purpose or, if Executive serves on the
Board of Directors of such Entity, he recuses himself from all discussion and
decision-making with respect to the unit engaging in the Competing Business
Purpose; or (vi) any activity consented to in writing by the Company.

“Restricted Territory” means each and every country, province, state, city, or
other political subdivision of the world in which Company, Newco or any of their
subsidiaries or affiliates is currently engaged, or currently plans to engage in
a Competing Business Purpose.

3. Nonsolicitation. Executive further agrees that Executive shall not during the
Non-Competition Period, directly or indirectly, without the prior written
consent of Company:

(a) personally or through others, solicit or attempt to solicit (on Executive’s
own behalf or on behalf of any other person) any employee of Company or Newco,
or any subsidiary thereof or their respective successors or assigns, to leave
his or her employment with Company or Newco or any of their subsidiaries or
their respective successors or assigns;

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(b) personally or through others, induce, attempt to induce, solicit or attempt
to solicit (on Executive’s own behalf or on behalf of any other person), any
Executive of Company or Newco, or any subsidiary thereof, to engage in any
activity in which Executive would, under the provisions of Section 2 hereof, be
prohibited from engaging.

Notwithstanding the foregoing, for purposes of this Agreement, the placement of
general advertisements that may be targeted to a particular geographic or
technical area but that are not specifically targeted toward employees of
Company, Newco or of their subsidiaries or their respective successors or
assigns, shall not be deemed to be a breach of this Section 3.

4. Severability of Covenants. The covenants contained in Section 2 hereof shall
be construed as a series of separate covenants, one for each country, province,
state, city or other political subdivision of the Restricted Territory. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms to the covenant contained in Section 2 hereof. If, in any judicial
proceeding, a court refuses to enforce any of such separate covenants (or any
part thereof), then Company and Executive agree that such unenforceable covenant
(or such part) shall be eliminated from this Agreement to the extent necessary
to permit the remaining separate covenants (or portions thereof) to be enforced.
In the event that the provisions of Section 2 or Section 3 are deemed to exceed
the time, geographic or scope limitations permitted by applicable law, then
Company and Executive agree that such provisions shall be reformed to the
maximum time, geographic or scope limitations, as the case may be, permitted by
applicable law.

5. Executive Acknowledgement. Executive acknowledges that (i) Executive has
received adequate consideration for this Agreement and that the limitations of
time, geography and scope of activity agreed to in this Agreement are reasonable
and necessary because, among other things: (A) the Company is engaged in a
highly competitive industry, (B) Executive has had unique access to the trade
secrets, confidential and proprietary information, and know-how of the Company,
including, without limitation, the plans and strategy (and, in particular, the
competitive strategy) of the Company, and (C) Executive believes that this
Agreement provides no more protection than is reasonably necessary to protect
Company’s and Newco’s trade secrets and confidential and proprietary
information.

6. Remedy. The non-competition and non-solicitation covenants in this Agreement
are essential to the Company’s willingness to provide benefits and payments
under the Change in Control Agreement. In the event Executive breaches any
provision of Section 2 or 3 of this Agreement, the sole remedy to the Company
for such breach

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shall be that (i) any benefits and payments not yet provided or paid shall be
cancelled immediately, and (ii) any of Executive’s options to purchase common
stock of the Company shall be cancelled immediately.

7. Non-Exclusivity. The rights and remedies of Company hereunder, and the
obligations and liabilities of Executive hereunder, are in addition to their
respective rights, remedies, obligations and liabilities under the law of unfair
competition, misappropriation of trade secrets and the like. This Agreement does
not limit Executive’s obligations or the rights of Company (or any affiliate of
Company) under the terms of any other agreement between Executive and Company or
any affiliate of Company.

8. Notices. All notices and other communications pursuant to this Agreement
shall be in writing and deemed to be sufficient if contained in a written
instrument and shall be deemed given if delivered personally, telecopied, sent
by nationally-recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the respective parties at
the following address:

 

  (a) if to Company, to:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

 

  (b) if to Executive, to the address for notice set forth on Executive’s
signature page hereto.

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.

9. Severability. If any provision of this Agreement or any part of any such
provision is held under any circumstances to be invalid or unenforceable in any
jurisdiction, then: (a) except as otherwise set forth herein, such provision or
part thereof shall, with respect to such circumstances and in such jurisdiction,
be deemed amended to conform to applicable laws so as to be valid and
enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) such invalidity of enforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
Agreement.

10. Governing Law. This Agreement shall be construed in accordance with, and
governed in all respects by, the laws of the State of California, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

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11. Attorneys’ Fees. Should any litigation, arbitration or other proceeding be
commenced between the parties concerning this Agreement (including, without
limitation, the enforcement hereof and the rights and duties of the parties
hereunder), the party prevailing shall be entitled, in addition to such other
relief as may be granted, such party’s attorneys’ fees and expenses in
connection with such litigation, arbitration or other proceeding.

12. Waiver. No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any party
in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy. No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of the
waiving party; and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.

13. Captions. The captions contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not
be referred to in connection with the construction or interpretation of this
Agreement.

14. Entire Agreement. This Agreement, the Retention Agreement, the Offer Letter
and the Amended and Restated Change in Control Agreement (including the
agreements referenced in any such other agreements) set forth the entire
understanding of Executive and Company relating to the subject matter hereof and
supersede all prior agreements and understandings between any of such parties
relating to the subject matter hereof. Executive understands and agrees that he
has had an opportunity to seek his own counsel in his review of this Agreement.

15. Amendments. This Agreement may not be amended, modified, altered, or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of Company and Executive.

16. Assignment. This Agreement and all obligations hereunder are personal to
Executive and may not be transferred or assigned by Executive at any time.
Company may assign its rights under this Agreement to any entity in connection
with any merger or sale or transfer of all or substantially all of Company’s
assets.

17. Binding Nature. This Agreement will be binding upon Executive and
Executive’s representatives, executors, administrators, estate, heirs,
successors and assigns, and will inure to the benefit of Company and its
respective successors and assigns.

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18. Counterpart Execution. This Agreement may be executed by facsimile and in
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank]

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In witness whereof, the undersigned have executed this Agreement as of the date
first above written.

 

“EXECUTIVE”

 

Print Name:  

 

Address:  

 

 

Telephone:  

 

Fax:  

 

“COMPANY”   MAXYGEN, a Delaware corporation By:  

 

Name:  

 

Title: