Document:

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                                                                  Exhibit 10.6

                           SECOND AMENDMENT TO LEASE

          This Second Amendment to Lease ("Amendment") is entered into, and
dated for reference purposes, as of October 24, 2000 (the "Execution Date") by
and between METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
("Metropolitan" or "Landlord"), as Landlord, and MAXYGEN, INC., a Delaware
corporation ("Tenant"), with reference to the following facts ("Recitals"):

          A.  Landlord and Tenant entered into that Lease (the " Original
Lease") dated as of October 21, 1998 for certain premises consisting of the
entire building known as 515 Galveston Drive (the "Original Premises" or "515
Galveston Premises") Redwood City, California, as amended by that First
Amendment to Lease dated as of February 26, 1999 (the "First Amendment") for the
lease of Expansion Space A (which may also be referred to as the "220 Penobscot
Premises") all as more particularly described in the Original Lease and First
Amendment.

          B.  Landlord and Tenant desire to provide for the lease to Tenant of
Expansion Space B (defined below), extension of the Expansion Space Term with
respect to Expansion Space A and other amendments of the Existing Lease subject
to and upon all of the conditions, terms and covenants provided in this
Amendment.

          NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants set forth herein and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:

          Section 1.  Scope of Amendment; Defined Terms.  Except as expressly
          ---------   ---------------------------------
provided in this Amendment, the Existing Lease shall remain in full force and
effect. Should any inconsistency arise between this Amendment and the Existing
Lease as to the specific matters which are the subject of this Amendment, the
terms and conditions of this Amendment shall control. The term "Existing Lease"
shall refer to the Original Lease, as amended by the First Amendment, before
giving effect to the modifications set forth in this Amendment, and the term
"Lease" as used herein and in the Existing Lease shall refer to the Existing
Lease as modified by this Amendment. The 515 Galveston Premises together with
the 220 Penobscot Premises may collectively be referred to herein as the
"Existing Premises". All capitalized terms used in this Amendment and not
defined herein shall have the meanings set forth in the Existing Lease unless
the context clearly requires otherwise.

          Section 2.  Condition Precedent.  This Amendment and the obligations
          ---------   -------------------
of each party hereunder are expressly subject to the condition precedent of
Landlord successfully entering into and obtaining a legally binding written
agreement with Confer Software (formerly Araxys, Inc., and referred to herein as
"Confer") which is the existing tenant of Expansion Space B (defined below)
modifying Confer's pre-existing lease of Expansion Space B to provide for
Confer's surrender of possession and termination of Confer's rights to Expansion
Space B satisfactory in all respects in form and substance to Landlord, in
Landlord's sole discretion (the "Confer Termination Agreement"). If such
condition precedent is not satisfied by November 1, 2000, unless waived in
writing by Landlord in its sole discretion by November 1, 2000, this Amendment
shall be null and void, and of no force or effect, and Landlord shall refund the
payments submitted by Tenant at the time Tenant signs this Amendment for the
increased amount of the Security Deposit and advance payment of the initial
installment of Monthly Base Rent and Rent Adjustment Deposit allocable to
Expansion Space B. Landlord shall notify Tenant of the satisfaction of this
condition precedent either by (a) written notice to Tenant or (b) by tendering
to Tenant possession of Expansion Space B as described in Section 5 below.

          Section 3.  Extension of Term of Lease of the 220 Penobscot Premises
          ---------   --------------------------------------------------------
(a/k/a Expansion Space A); Amendment of Options to Extend.  Notwithstanding any
---------------------------------------------------------
provision of the First Amendment or the Original Lease to the contrary:

          (a)  Landlord and Tenant acknowledge and agree that as contemplated by
Section 4(c) of the First Amendment, the Expansion Space Term Expiration Date is
March 31, 2002, and that such Expansion Space Term is hereby extended for the
"Expansion Space Extended Term" commencing on April 1, 2002 and expiring
February 24, 2005 (the "Expansion Space Extended Expiration Date" or "ESEED"),
unless

                                     Page 1
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sooner terminated pursuant to the terms of the Existing Lease. This extension is
only for the 220 Penobscot Premises. This extension is further upon and subject
to the same conditions, terms, covenants and agreements contained in the
Existing Lease except as otherwise provided in this Amendment. Landlord and
Tenant acknowledge and agree that this Amendment provides all rights and
obligations of the parties with respect to extension of the current Expansion
Space Term, whether or not in accordance with any other provisions, if any, of
the First Amendment or the Original Lease regarding such renewal or extension,
and any such provisions, options or rights for renewal or extension shall be of
no force or effect as to the 220 Penobscot Premises, and without limiting the
generality of the foregoing, Tenant and Landlord acknowledge and agree that the
Expansion Option to Extend set forth in Section 5 of the First Amendment is
hereby deleted as of the Execution Date. Notwithstanding any provision above or
of Section 3 of Rider 2 of the Original Lease or of the Existing Lease to the
contrary, as of the Execution Date, the Option to Extend pursuant to Section 3
shall apply to the entire Premises (and not less than the entire Premises),
including the 515 Galveston Premises and the 220 Penobscot Premises and
Expansion Space B (defined below), and such Section 3 (including all references
therein to the "entire Premises as it may then exist") and the Existing Lease
are hereby amended accordingly.

          (b)  Tenant hereby leases for the Expansion Space Extended Term and
accepts the 220 Penobscot Premises in its AS IS condition, without any express
or implied representations or warranties of any kind by Landlord, its brokers,
manager or agents, or the employees of any of them regarding the 220 Penobscot
Premises; and Landlord shall not have any obligation to construct or install any
tenant improvements or alterations or to pay for any such construction or
installation.  Tenant acknowledges that Tenant presently occupies and has
occupied the 220 Penobscot Premises since March 1, 1999.

          (c)  In addition to rent payable for the Original Premises, the amount
of Monthly Base Rent due and payable by Tenant for the 220 Penobscot Premises on
and after April 1, 2002 and monthly in advance on the first day of each month
thereafter through the Expansion Space Extended Expiration Date shall be the
amount equal to the product of the 16,714 square feet of Rentable Area of the
220 Penobscot Premises multiplied by the Monthly Base Rent rate per square foot
of Rentable Area in effect for the corresponding month for Expansion Space B as
set forth in the last column of the table of Section 5(g) below (which for the
first month of April, 2002 is at the monthly rate of $5.98 per square foot of
Rentable Area).

          Section 4.  Increase in the Security Deposit.  Notwithstanding any
          ---------   --------------------------------
provision of the Existing Lease to the contrary, upon execution of this
Amendment Tenant shall pay Landlord Three Hundred and Seventy-four Thousand
Dollars ($374,000.00) to be held by Landlord to increase the amount of the
Security Deposit required in Section 1.01(14) of the Original Lease, as amended
by Section 3 of the First Amendment, from the amount of Four Hundred and Twenty-
six Thousand Dollars ($426,000.00) to the amount of Eight Hundred Thousand
Dollars ($800,000.00), which greater amount is the Security Deposit hereafter
required under the Lease.

          Section 5.  Lease of Expansion Space B.
          ---------   --------------------------

          (a)  Lease of Space.  Landlord hereby leases to Tenant and Tenant
               --------------
hereby hires from Landlord Expansion Space B (defined below) upon and subject to
all of the terms, covenants and conditions of the Lease except as expressly
provided herein.  "Expansion Space B" is known as 200 Penobscot Drive, Redwood
City, California, a part of Building 4 of Phase I of the Project known as
Seaport Centre, which Expansion Space B is shown on Exhibit A to this Amendment.
                                                    ---------
Landlord and Tenant hereby agree that Expansion Space B is conclusively presumed
to be 11,510 square feet of Rentable Area.

          (b)  AS-IS.  Landlord shall deliver Expansion Space B to Tenant in its
               -----
AS IS condition, without any express or implied representations or warranties of
any kind by Landlord, its brokers, manager or agents, or the employees of any of
them regarding Expansion Space B; and Landlord shall not have any obligation to
construct or install any tenant improvements or alterations or to pay for any
such construction or installation except to the extent of the Landlord's Maximum
Contribution as provided below in this Section 5(b).  Landlord's Maximum
Contribution means an amount to reimburse Tenant for fifty percent (50%) of the
reasonable costs actually incurred by Tenant for the Ramp Work (defined below),
and shall be payable as provided below.  Landlord's Maximum Contribution shall
be paid to Tenant within 30 days after the later of

                                     Page 2
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final completion of the Ramp Work and Landlord's receipt of (i) reasonable
evidence that such work was required by, and is in compliance with, the ADA (as
defined in the Lease) and other Laws, including all applicable governmental
approvals of the plans for and completion of such work, (ii) final as-built
plans and specifications, (iii) full, final, unconditional lien releases, and
(iv) reasonable substantiation of costs incurred by Tenant with respect to the
Ramp Work. Tenant must prior to expiration of nine (9) months after the
Commencement Date submit written application with the items required above for
disbursement or reimbursement for any reimbursable costs out of the Landlord's
Maximum Contribution, and Landlord will not be obligated to consider any
application or submission not made or not complete prior to that date, or to
disburse any amount as to any such late or incomplete application or submission.
For purposes of this Amendment, the term "Ramp Work" shall mean the following:
(1) modifications or upgrades to the out-of-doors walkways and/or ramps to the
existing exterior entry doors to Expansion Space B only (and Tenant shall be
solely responsible for any such work, and the cost thereof, with respect to the
existing entry doors to the 220 Penobscot Premises), if and to the extent
required as of the Execution Date to comply with the ADA and other Laws, subject
to any applicable variance(s), as enforced and interpreted by applicable
governmental authorities as of the Execution Date; and (2) incidental
landscaping necessitated by such work. The Ramp Work shall be part of, and
subject to all requirements applicable to, Tenant Work described in Sections
5(e) and (f) below.

          (c)  Delivery; Commencement Date & Term.  Landlord shall tender to
               ----------------------------------
Tenant possession of Expansion Space B promptly after Landlord recovers
possession of such space, which date may be earlier or later than November 1,
2000 (the "Projected Commencement Date").  Possession will be adequately
tendered to Tenant by Landlord either delivering the keys (or other means of
access) to Tenant or Tenant's Broker, or by Landlord giving written notice that
the keys (or other means of access) to Expansion Space B are available for
Tenant or its representative to pick up at the office of Landlord or of the
Property Manager of Seaport Centre.  The term of the lease of Expansion Space B
(the "Expansion Space B Term") shall commence on the date Landlord tenders to
Tenant possession of Expansion Space B (which date may be referred to as the
"Expansion Space B Commencement Date" or "ESBCD") and continue through February
24, 2005 (the "Expansion Space B Term Expiration Date"), and on and after the
ESBCD Tenant's possession of the space shall be subject to all of the terms,
covenants and conditions of this Lease, including payment of all Rent and other
amounts payable under the Lease, except as otherwise provided in this Amendment.

          (d)  Delay in Delivery.  If Landlord does not obtain and tender
               -----------------
possession of Expansion Space B on or before the Projected Commencement Date, by
reason of the following: (i) the holding over or retention of possession of any
tenant, tenants or occupants, or (ii) for any other reason, then Landlord shall
not be subject to any liability for the failure to give possession on said date.
Under such circumstances the ESBCD shall be delayed by a number of days equal to
the days of delay in Landlord's delivery of possession to Tenant.  No such
failure to give possession shall affect the validity of this Lease or the
obligations of the Tenant hereunder.  Within thirty (30) days following the
occurrence of the ESBCD, Landlord and Tenant shall enter into an agreement
(which is attached to this Amendment as Exhibit B) confirming the ESBCD.  If
                                        ---------
Tenant fails to enter into such agreement, then the ESBCD shall be the date
designated by Landlord in such agreement.

          (e)  Tenant Work Generally.  Landlord and Tenant acknowledge and agree
               ---------------------
that notwithstanding any provisions of the Existing Lease to the contrary:  (i)
Tenant may desire to do certain remodeling, repair, improvement or alteration in
connection with its initial occupancy, which for purposes of this Lease is
referred to as the Tenant Work; (ii) all Tenant Work, if any, shall be done as
Tenant Alterations within the meaning of Article Nine of the Lease, subject to
and in compliance with all conditions and provisions of the Lease applicable to
Tenant Alterations, except as otherwise expressly provided in this Amendment;
(iii) without limiting the generality of any provisions of Article Nine,
Tenant's selection of Tenant's space planner and/or architect and Tenant's
selection of contractor(s) shall be subject to Landlord's prior written
approval, which shall not unreasonably be withheld; (iv) Tenant shall not be
required to obtain a completion and lien indemnity bond for the Tenant Work; (v)
such work, including all design, plan review, obtaining all approvals and
permits, and construction shall be at Tenant's sole cost and expense, including
delivery to Landlord of plans and specifications of such Tenant Work (including
2 sets of as-built mylars and digitized plans and specifications upon completion
to the extent such work is more than recarpeting and/or repainting), and (vi)

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Tenant shall pay any expenses of Landlord in accordance with Article Nine,
including, but not limited to, a fee for review or monitoring of the design or
construction of the Tenant Work, which fee shall not exceed two percent (2%) of
all "hard costs" of the Tenant Work.

          (f)  Design & Construction Responsibility for any Tenant Work.  Tenant
               --------------------------------------------------------
shall be responsible for the suitability for the Tenant's needs and business of
the design and function of all Tenant Work and for its construction in
compliance with all Law as applicable and as interpreted at the time of
construction of the Tenant Work, including all building codes and the ADA (as
defined in the Lease).  Tenant, through its architects and/or space planners
("Tenant's Architect"), shall prepare all architectural plans and
specifications, and engineering plans and specifications, for the real property
improvements to be constructed by Tenant in Expansion Space B in sufficient
detail to be submitted for approval by Landlord to the extent required pursuant
to Article Nine of the Lease and to be submitted by Tenant for governmental
approvals and building permits and to serve as the detailed construction
drawings and specifications for the contractor, and shall include, among other
things, all partitions, doors, heating, ventilating and air conditioning
installation and distribution, ceiling systems, light fixtures, plumbing
installations, electrical installations and outlets, telephone installations and
outlets, any other installations required by Tenant, fire and life-safety
systems, wall finishes and floor coverings, whether to be newly installed or
requiring changes from the as-is condition of Expansion Space B as of the
Execution Date.  Tenant shall be responsible for the oversight, supervision and
construction of all Tenant Work in compliance with this Lease, including
compliance with all Law as applicable and as interpreted at the time of
construction, including all building codes and the ADA, subject to the
Landlord's Maximum Contribution as provided in Section 5(b).

          (g)  Monthly Base Rent for Expansion Space B.  Notwithstanding any
               ---------------------------------------
provision of the Existing Lease to the contrary, in addition to rent payable for
the Existing Premises, the amount of Monthly Base Rent due and payable by Tenant
for Expansion Space B on and after the ESBCD and monthly in advance on the first
day of each month thereafter for the Expansion Space B Term shall be as follows:

          Period from/through       Monthly   Monthly Rate/SF of Rentable Area
          -------------------       -------   --------------------------------

          Month 01 - 12             $66,182.50                 $5.75
          Month 13 - 24             $68,829.80                 $5.98
          Month 25 - 36             $71,582.99                 $6.22
          Month 37 - 48             $74,446.31                 $6.47
          Month 49 - 2/24/2005      $77,424.16                 $6.73

Provided however, the first installment of Monthly Base Rent for Expansion Space
B shall be paid in advance by Tenant to Landlord concurrently with execution of
this Amendment.

          (h)  Tenant's Share of Operating Expenses & of Tax Expenses.
               ------------------------------------------------------
Notwithstanding any provision of the Existing Lease to the contrary, with
respect to Expansion Space B, Tenant shall additionally pay Building Operating
Expenses, Phase Operating Expenses and Project Operating Expenses accruing on
and after the ESBCD in the shares set forth below:

               Tenant's Building Share:   40.781%
               Tenant's Phase Share:       3.814%
               Tenant's Project Share:     2.142%

          (i)  Parking. On and after the ESBCD during the Expansion Space B
               -------
Term, Tenant shall have the right to use, in accordance with Section 2.06(c) and
other applicable terms of the Existing Lease, on an unassigned basis thirty-
eight (38) Parking Spaces in addition to the number permitted in the Existing
Lease.

          (j)  Signage.  Any signage with respect to Expansion Space B shall
               -------
be in accordance with Section 6.06 and other applicable terms of the Existing
Lease.

          Section 6.  Time of Essence.  Without limiting the generality of any
          ---------   ---------------
other provision of the Lease, time is of the essence to each and every term and
condition of this Amendment.

                                     Page 4
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     Section 7.  Payment of Commission.  Tenant represents that, except for
     ---------   ---------------------
CRESA Partners ("Tenant's Broker") it has not dealt with any real estate broker,
sales person, or finder in connection with this Amendment, and no such person
initiated or participated in the negotiation of this Lease, or showed Expansion
Space B to Tenant.  Tenant hereby agrees to pay any commission to which Tenant's
Broker is entitled and to indemnify, protect, defend and hold Landlord and the
Indemnitees harmless from and against any and all liabilities, demands and
claims for commissions and fees arising out of a breach of the foregoing
representation or agreement by Tenant, and costs and expenses in connection
therewith, including attorneys fees and costs of defense.  Landlord represents
that, except for Cornish & Carey Commercial ("Landlord's Broker"), it has not
dealt with any real estate broker, sales person, or finder in connection with
this Amendment, and no such person initiated or participated in the negotiation
of this Amendment.  Landlord agrees to pay any commission to which Landlord's
Broker is entitled in connection with this Amendment pursuant to Landlord's
written agreement with Landlord's Broker.

     Section 8.  Attorneys' Fees.  Each party to this Amendment shall bear its
     ---------   ---------------
own attorneys' fees and costs incurred in connection with the discussions
preceding, negotiations for and documentation of this Amendment.  In the event
any party brings any suit or other proceeding with respect to the subject matter
or enforcement of this Amendment, the prevailing party (as determined by the
court, agency or other authority before which such suit or proceeding is
commenced) shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of investigation as
actually incurred, including court costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding (including in any action or participation in or in
connection with any case or proceeding under the Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statutes, in establishing or
                         ------
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).

     Section 9.  Effect of Headings; Recitals: Exhibits.  The titles or headings
     ---------   --------------------------------------
of the various parts or sections hereof are intended solely for convenience and
are not intended and shall not be deemed to or in any way be used to modify,
explain or place any construction upon any of the provisions of this Amendment.
Any and all Recitals set forth at the beginning of this Amendment are true and
correct and constitute a part of this Amendment as if they had been set forth as
covenants herein.  Exhibits, schedules, plats and riders hereto which are
referred to herein are a part of this Amendment.

     Section 10. Force and Effect.  Except as modified by this Amendment, the
     ----------  ----------------
terms and provisions of the Lease are hereby ratified and confirmed and shall
remain in full force and effect.  Should any inconsistency arise between this
Amendment and the Existing Lease as to the specific matters which are the
subject of this Amendment, the terms and conditions of this Amendment shall
control.  This Amendment shall be construed to be a part of the Lease and shall
be deemed incorporated in the Lease by this reference.

     Section 11. Entire Agreement; Amendment.  This Amendment taken together
     ----------  ---------------------------
with the Existing Lease, together with all exhibits, schedules, riders and
addenda to each, constitutes the full and complete agreement and understanding
between the parties hereto and shall supersede all prior communications,
representations, understandings or agreements, if any, whether oral or written,
concerning the subject matter contained in this Amendment and the Existing
Lease, as so amended, and no provision of the Lease as so amended may be
modified, amended, waived or discharged, in whole or in part, except by a
written instrument executed by all of the parties hereto.

     Section 12. Authority.  Each party represents and warrants to the other
     ----------  ---------
that it has full authority and power to enter into and perform its obligations
under this Amendment, that the person executing this Amendment is fully
empowered to do so, and that no consent or authorization is necessary from any
third party.  Landlord may request that Tenant provide Landlord evidence of
Tenant's authority.

                                     Page 5
<PAGE>

     Section 13. Counterparts.  This Amendment may be executed in duplicates or
     ----------  ------------
counterparts, or both, and such duplicates or counterparts together shall
constitute but one original of the Amendment.  Each duplicate and counterpart
shall be equally admissible in evidence, and each original shall fully bind each
party who has executed it.

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

     TENANT:        MAXYGEN, INC.,
                    a Delaware corporation

                    By:  /s/ B.S. Gill
                        -------------------------------------------

                         Print Name:  Balkrishan "Simba" Gill
                                      -----------------------------

                         Title:  President
                                -----------------------------------
                         (Chairman of Board, President or Vice President)

                    By:  /s/ Michael Rabson
                        -------------------------------------------

                         Print Name:  Michael Rabson
                                     ------------------------------

                         Title:  Assistant Secretary
                                -----------------------------------
                         (Secretary, Assistant Secretary, CFO or Assistant
                          Treasurer)

     LANDLORD:      METROPOLITAN LIFE INSURANCE COMPANY,
                    a New York corporation

                    By:  /s/ Donald Devine
                        -------------------------------------------

                         Print Name:  Donald Devine
                                     ------------------------------

                         Title:  Vice-President
                                -----------------------------------

                                     Page 6
<PAGE>

                                   EXHIBIT A

                               EXPANSION SPACE B

[pictorial representation of the floor plan at 200-220 Penobscot Drive, Redwood
City, CA showing a large rectangle subdivided into two rectangles of roughly
equal size labeled "Expansion Space B" and "Expansion Space A". Within each
smaller rectangle are pictorial representations of the subdivision of each space
into rooms, including the locations of doorways.]

                               Exhibit A - Page 1
<PAGE>

                                   EXHIBIT B
                 EXPANSION SPACE B COMMENCEMENT DATE AGREEMENT

METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"), and
MAXYGEN, INC., a Delaware corporation ("Tenant"), have entered into a certain
Second Amendment to Lease, dated as of October 24, 2000 (the "Amendment").  The
original Lease, as previously amended by that certain First Amendment to Lease
dated as of February 26, 1999, and as further amended by the Amendment, may be
referred to as the "Lease".

WHEREAS, Landlord and Tenant wish to confirm and memorialize the Expansion Space
B Commencement Date (ESBCD) as provided for in the Amendment;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Amendment, Landlord and Tenant agree as follows:

     1.   Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the Amendment and the Lease.

     2.   The Expansion Space B Commencement Date, as defined in the Amendment,
is ________________________________.

     3.   Intentionally omitted.

     4.   Tenant hereby confirms the following:

          (a)  that it has accepted possession of Expansion Space B pursuant to
               the terms of the Amendment;

          (b)  (intentionally omitted); and

          (c)  that the Lease is in full force and effect.

     5.   Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.

                               Exhibit B Page 1
<PAGE>

     6.   The Lease and this Expansion Space B Commencement Date Agreement
contain all of the terms, covenants, conditions and agreements between the
Landlord and the Tenant relating to the subject matter herein. No prior other
agreements or understandings pertaining to such matters are valid or of any
force and effect.

     TENANT:        MAXYGEN, INC.,
                    a Delaware corporation

                    By:  /s/ Howard Simon
                        ----------------------------------------

                         Print Name:  Howard Simon
                                     ---------------------------
                         Title:       Vice President
                                --------------------------------
                         (Chairman of Board, President or Vice President)
                         Date: _________________________________

                    By:  /s/ Michael Rabson
                         ---------------------------------------

                         Print Name:  Michael Rabson
                                      --------------------------
                         Title:       Assistant Secretary
                                --------------------------------
                         (Secretary, Assistant Secretary, CFO or Assistant
                          Treasurer)
                         Date: _________________________________

     LANDLORD:      METROPOLITAN LIFE INSURANCE COMPANY,
                    a New York corporation

                    By:  /s/ Donald Devine
                        ----------------------------------------

                         Print Name:   Donald Devine
                                     ---------------------------
                         Title:        Vice President
                                 -------------------------------
                         Date:         11/20/00
                               ---------------------------------

                               Exhibit B Page 2<PAGE>

                                                                   Exhibit 10.10
                                                                   -------------

                 1999 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
                                      OF
                                 MAXYGEN, INC.

                         (amended as of March 1, 2001)

     1.   PURPOSES OF THE PLAN
          --------------------

          The purposes of the 1999 Nonemployee Directors Stock Option Plan of
Maxygen, Inc., a Delaware corporation, are: (a) to encourage Nonemployee
Directors to accept or continue their association with the Company; and (b) to
increase the interest of Nonemployee Directors in the Company's operations and
increased profits through participation in the growth in value of the Common
Stock of the Company.

     2.   DEFINITIONS
          -----------

          As used herein, the following definitions shall apply:

          (a)  "Administrator" shall mean the entity, either the Board or a
                -------------
committee appointed by the Board, responsible for administering this Plan, as
provided in Section 5.

          (b)  "Affiliate" shall mean a parent or subsidiary corporation as
                ---------
defined in the applicable provisions of the Code.

          (c)  "Annual Option" shall have the meaning set forth in Section 6(b).
                -------------

          (d)  "Board" shall mean the Board of Directors of the Company, as
                -----
constituted from time to time.

          (e)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
                ----

          (f)  "Common Stock" shall mean the Common Stock of the Company.
                ------------

          (g)  "Company" shall mean Maxygen, Inc., a Delaware corporation.
                -------

          (h)  "Director Fee" shall mean the cash amount, if any, a Nonemployee
                ------------
Director shall be entitled to receive for serving as a director of the Company
in any fiscal year.
<PAGE>

     (i)  "Fair Market Value" shall mean, as of the date in question, the last
           -----------------
transaction price quoted by the NASDAQ National Market System on the date of
grant; provided, however, that if the Common Stock is not traded on such market
       --------  -------
system or the foregoing shall otherwise be inappropriate, then the Fair Market
Value shall be determined by the Administrator in good faith at its sole
discretion and on such basis as it shall deem appropriate. Such determination
shall be conclusive and binding on all persons.

     (j)  "Initial Option" shall have the meaning set forth in Section 6(a).
           --------------

     (k)  "Nonemployee Director" shall mean any person who is a member of the
           --------------------
Board but is not an employee of the Company or any Parent or Subsidiary of the
Company and has not been an employee of the Company or any Parent or Subsidiary
of the Company at any time during the preceding 12 months.

     (l)  "Option" shall mean a stock option granted pursuant to this Plan.
           ------

     (m)  "Option Agreement" shall mean the written agreement described in
           ----------------
Section 6(c) evidencing the grant of an Option to a Nonemployee Director and
containing the terms, conditions and restrictions pertaining to such Option.
"Written agreement" shall include electronic acceptance of an electronic form of
agreement.

     (n)  "Option Shares" shall mean the Shares subject to an Option granted
           -------------
under this Plan.

     (o)  "Optionee" shall mean a Nonemployee Director who holds an Option.
           --------

     (p)  "Parent" shall mean a "parent corporation," whether now or hereafter
           ------
existing, as defined in Section 424(e) of the Code.

     (q)  "Plan" shall mean this 1999 Nonemployee Directors Stock Option Plan of
           ----
Maxygen, Inc., as it may be amended from time to time.

     (r)  "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
           ----------
Exchange Commission, or any successor rule thereto.

     (s)  "Section" unless the context clearly indicates otherwise, shall refer
           -------
to a Section of this Plan.

     (t)  "Share" shall mean a share of Common Stock, as adjusted in accordance
           -----
with Section 7(a).

                                       2
<PAGE>

          (u)  "Subsidiary" shall mean a "subsidiary corporation" of the
                ----------
Company, whether now or hereafter existing, within the meaning of Section 424(f)
of the Code, but only for so long as it is a "subsidiary corporation".

     3.   ELIGIBLE PERSONS
          ----------------

          Every person who at the date of grant of an Option is a Nonemployee
Director is eligible to receive Options under this Plan.

     4.   STOCK SUBJECT TO THIS PLAN
          --------------------------

          Subject to Section 7(a) of this Plan, the maximum aggregate number of
Shares which may be issued on exercise of Options granted pursuant to this Plan
is 300,000 Shares. The Shares covered by the portion of any grant under the Plan
that expires unexercised shall become available again for grants under the Plan.

     5.   ADMINISTRATION
          --------------

          (a)  This Plan shall be administered by the Board, or by a committee
(the "Committee") of at least two Board members to which administration of the
Plan is delegated (in either case, the "Administrator"), in accordance with the
requirements of Rule 16b-3.

          (b)  Subject to the other provisions of this Plan, the Administrator
shall have the authority, in its sole discretion: (i) to determine the Fair
Market Value of the Shares subject to Option; (ii) to interpret this Plan; (iii)
to prescribe, amend and rescind rules and regulations relating to this Plan;
(iv) to defer (with the consent of the Optionee) or accelerate the exercise date
of any Option; (v) to authorize any person to execute on behalf of the Company
any instrument evidencing the grant of an Option; and (vi) to make all other
determinations deemed necessary or advisable for the administration of this
Plan. The Administrator may delegate nondiscretionary administrative duties to
such employees of the Company as it deems proper.

          (c)  All questions of interpretation, implementation and application
of this Plan shall be determined by the Administrator. Such determination shall
be final and binding on all persons.

     6.   GRANT OF OPTIONS
          ----------------

          (a)  Grant for Initial Election or Appointment to Board. Subject to
               --------------------------------------------------
the terms and conditions of this Plan, if any person who is not an officer or
employee of the Company is first elected or appointed as a member of the Board
and is otherwise

                                       3
<PAGE>

considered a "Nonemployee Director" as defined herein, then the Company shall
grant to such Nonemployee Director on such day an Option to purchase 20,000
Shares ("Initial Option") at an exercise price equal to the Fair Market Value of
such Shares on the date of such Initial Option grant, subject to the limitation
of Section 7(i).

          (b)  Grant for Re-election to Board. Subject to the terms and
               ------------------------------
conditions of this Plan, on the date of the first meeting of the Board
immediately following each annual meeting of stockholders of the Company (even
if held on the same day as the meeting of stockholders) the Company shall grant
to each Nonemployee Director then in office for longer than six months, an
Option to purchase 5,000 shares (the "Annual Option") at an exercise price equal
to the Fair Market Value of such Shares.

          (c)  No Option shall be granted under this Plan after ten years from
the date of adoption of this Plan by the Board. Each Option shall be evidenced
by a written Option Agreement, in form and substance satisfactory to the
Company, executed by the Company and the Optionee. Failure by the Company, the
Nonemployee Director, or both to execute an Option Agreement shall not
invalidate the granting of an Option; however, the Option may not be exercised
until the Option Agreement has been executed by both parties. For the purposes
of this Section 6(c), execution of an Option Agreement shall include electronic
acceptance of an electronic version of the Option Agreement.

     7.   TERMS AND CONDITIONS OF OPTIONS
          -------------------------------

          Each Option granted under this Plan shall be subject to the terms and
conditions set forth in this Section 7.

          (a)  Changes in Capital Structure. Subject to subsection 7(b), if the
               ----------------------------
Common Stock is changed by reason of a stock split, reverse stock split, stock
dividend, or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation, or reorganization,
appropriate adjustments shall be made in: (i) the number and class of shares of
Common Stock subject to this Plan and each Option outstanding under this Plan;
and (ii) the exercise price of each outstanding Option; provided, however, that
                                                        --------  -------
the Company shall not be required to issue fractional shares as a result of any
such adjustment. Each such adjustment shall be subject to approval by the
Administrator in its sole discretion.

          (b)  Time of Option Exercise. Subject to the other provisions of this
               -----------------------
Plan, each Option shall be for a term of ten years. Each Option shall be
exercisable in full on the date of grant. At the discretion of the
Administrator, the Company shall have a right of repurchase of Option Shares.
The Administrator shall have the discretion to specify the times at which such
right of repurchase shall lapse; provided, however, that
                                 --------  -------

                                       4
<PAGE>

the right of repurchase must lapse at the rate of at least 20% per year over
five years from the date the option was granted.

          (c)  Limitation on Other Grants. The Administrator shall have no
               --------------------------
discretion to grant Options under this Plan other than as set forth in Sections
6(a) and 6(b).

          (d)  Nonassignability of Option Rights. No Option shall be assignable
               ---------------------------------
or otherwise transferable by the Optionee, except by will or the laws of descent
and distribution. During the life of an Optionee, an Option shall be exercisable
only by the Optionee.

          (e)  Payment. Except as provided below, payment in full, in cash,
               -------
shall be made for all Option Shares purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company. Payment may also be made pursuant to a
cashless exercise/sale procedure. At the time an Option is granted or exercised,
the Administrator, in its absolute discretion, may authorize any one or more of
the following additional methods of payment: (i) acceptance of the Optionee's
full recourse promissory note for all or part of the Option price, less any par
value per share, which must be paid in cash, payable on such terms and bearing
such interest rate as determined by the Administrator (but in no event less than
the minimum interest rate required for the Company to avoid incurring a
financial accounting charge with respect to the Option and in no event more than
the maximum interest rate allowed under applicable usury laws), which promissory
note may be either secured or unsecured in such manner as the Administrator
shall approve (including, without limitation, by a security interest in the
Shares); (ii) delivery by the Optionee of Common Stock already owned by the
Optionee for all or part of the Option price, provided the Fair Market Value of
such Common Stock is equal on the date of exercise to the Option price, or such
portion thereof as the Optionee is authorized to pay by delivery of such stock;
provided, however, that if an Optionee has exercised any portion of any Option
granted by the Company by delivery of Common Stock, the Optionee may not, within
six months following such exercise, exercise any Option granted under this Plan
by delivery of Common Stock; and (iii) any other consideration and method of
payment to the extent permitted under the Delaware General Corporation Law.

          (f)  Termination as Director. Unless determined otherwise by the
               -----------------------
Administrator in its absolute discretion, to the extent not already expired or
exercised, an Option shall terminate at the earlier of: (i) the expiration of
the term of the Option; or (ii) three months after the last day served by the
Optionee as a director of the Company; provided, that an Option shall be
                                       --------
exercisable after the date of termination of service as a

                                       5
<PAGE>

director only to the extent exercisable on the date of termination; and provided
                                                                        --------
further, that if termination of service as a director is due to the Optionee's
-------
death or "disability" (as determined in accordance with Section 22(e)(3) of the
Code), the Optionee, or the Optionee's personal representative (or any other
person who acquires the Option from the Optionee by will or the applicable laws
of descent and distribution), may at any time within 12 months after the
termination of service as a director (or such lesser period as is specified in
the Option Agreement but in no event after the expiration of the term of the
Option), exercise the rights to the extent they were exercisable on the date of
the termination.

          (g)  Withholding and Employment Taxes. At the time of exercise of an
               --------------------------------
Option (or at such later time(s) as the Administrator may prescribe), the
Optionee shall remit to the Company in cash all applicable federal and state
withholding and employment taxes. If authorized by the Administrator in its sole
discretion, an Optionee shall be permitted to elect, by means of a form of
election to be prescribed by the Administrator, to have shares of Common Stock
that are acquired upon exercise of the Option withheld by the Company (but in
such event, only up to the minimum required withholding amount and in no event
any more) or to tender to the Company other shares of Common Stock or other
securities of the Company owned by the Optionee on the date of determination of
the amount of tax to be withheld as a result of the exercise of such Option (the
"Tax Date") to pay the amount of withholding taxes due. Any securities so
withheld or tendered shall be valued by the Company as of the Tax Date.

          (h)  Option Term. Each Option shall expire ten years after the date of
               -----------
grant.

          (i)  Exercise Price. The exercise price of any Option granted to any
               --------------
person who owns, directly or by attribution under the Code currently Section
424(d), stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any Affiliate (a "Ten Percent
Stockholder") shall in no event be less than 110% of the fair market value
(determined in accordance with 2(i)) of the stock covered by the Option at the
time the Option is granted.

     8.   MANNER OF EXERCISE
          ------------------

          (a)  An Optionee wishing to exercise an Option shall give written
notice to the Company at its principal executive office, to the attention of the
officer of the Company designated by the Administrator, accompanied by payment
of the exercise price as provided in Section 7(e) and, if required, by payment
of any federal or state withholding or employment taxes required to be withheld
due to exercise of the Option. The date the Company receives written notice of
an exercise accompanied by payment of

                                       6
<PAGE>

the exercise price and any required federal or state withholding or employment
taxes will be considered as the date such Option was exercised. Unless otherwise
provided by the Administrator, Options may be exercised only twice in any
calendar year.

          (b)  Promptly after the date an Option is exercised, the Company
shall, without stock issue or transfer taxes to the Optionee or other person
entitled to exercise the Option, deliver to the Optionee or such other person a
certificate or certificates for the requisite number of shares of Common Stock
or, in lieu of a certificate, electronic or paper notification of share
ownership in a brokerage account. An Optionee or transferee of an Optionee shall
not have any privileges as a stockholder with respect to any Common Stock
covered by the Option until the date of issuance of a stock certificate or
notification or ownership in a brokerage account.

     9.   NO RIGHT TO DIRECTORSHIP
          ------------------------

          Neither this Plan nor any Option shall confer upon any Optionee any
right with respect to continuation of the Optionee's membership on the Board or
shall interfere in any way with provisions in the Company's Certificate of
Incorporation, as amended, and Bylaws, as amended, relating to the election,
appointment, terms of office, and removal of members of the Board.

     10.  FINANCIAL INFORMATION
          ---------------------

          The Company shall provide to each Optionee during the period the
Optionee holds an outstanding Option a copy of the financial statements of the
Company as prepared either by the Company or independent certified public
accountants of the Company. Such financial statements shall be delivered as soon
as practicable following the end of the Company's fiscal year during the period
Options are outstanding.

     11.  LEGAL REQUIREMENTS
          ------------------

          The Company shall not be obligated to offer or sell any Shares upon
exercise of any Option unless the Shares are at that time effectively registered
or exempt from registration under the federal securities laws and the offer and
sale of the Shares are otherwise in compliance with all applicable securities
laws and the regulations of any stock exchange on which the Company's securities
may then be listed. The Company shall have no obligation to register the Shares
covered by this Plan under the federal securities laws or take any other steps
as may be necessary to enable the Shares covered by this Plan to be offered and
sold under federal or other securities laws. Upon exercising all or any portion
of an Option, an Optionee may be required to furnish representations or
undertakings deemed appropriate by the Company to enable the offer and sale of
the

                                       7
<PAGE>

Shares or subsequent transfers of any interest in the Shares to comply with
applicable securities laws. Certificates evidencing Shares acquired upon
exercise of Options shall bear any legend required by, or useful for purposes of
compliance with, applicable securities laws, this Plan or the Option Agreements.

     12.  AMENDMENTS TO PLAN
          ------------------

          The Board may amend this Plan at any time. Without the consent of an
optionee, no amendment may adversely affect outstanding Options. No amendment
shall require stockholder approval unless:

          (a)  stockholder approval is required to meet the exemptions provided
by Rule 16b-3, or any successor rule thereto or under applicable state statutes;
or

          (b)  the Board otherwise concludes that stockholder approval is
advisable.

     13.  STOCKHOLDER APPROVAL; TERM
          --------------------------

          This Plan shall become effective upon adoption by the Board of
Directors; provided, however, that no Option shall be exercisable unless and
           --------  -------
until written consent of holders of a majority of the outstanding shares of
capital stock of the Company, or approval by holders of a majority of shares of
capital stock of the Company present, or represented, and entitled to vote at a
validly called stockholders' meeting (or such greater number as may be required
by law or applicable governmental regulations or orders) is obtained within 12
months after adoption by the Board. This Plan shall terminate ten years after
adoption by the Board unless terminated earlier by the Board. The Board may
terminate this Plan at any time without stockholder approval. No Options shall
be granted after termination of this Plan, but termination shall not affect
rights and obligations under then-outstanding Options.

          Adopted by the Board of Directors: September 29, 1999

          Approved by the Stockholders: December 14, 1999

          Amended by the Board of Directors: March 1, 2001

                                       8
<PAGE>

                                 MAXYGEN, INC.
                 1999 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
                            STOCK OPTION AGREEMENT

          This document (the "Agreement") sets forth the terms of a Stock Option
(the "Option") granted by Maxygen, Inc., a Delaware corporation (the "Company"),
pursuant to a Certificate of Stock Option Grant (the "Certificate") displayed at
the website of AST StockPlan, Inc. The Certificate, which specifies the person
to whom the Option is granted ("Optionee") and other specific details of the
grant, and the electronic acceptance of the Certificate at the website of AST
StockPlan, Inc., are incorporated herein by reference.

          THE PARTIES AGREE AS FOLLOWS:

          1.  Grant of Option; Vesting Base Date.
              ----------------------------------

              1.1.  Grant. The Company hereby grants to Optionee an opportunity
                    -----
to purchase shares of its Common Stock in accordance with the Company's 1999
Non-Employee Directors Stock Option Plan (the "Plan"), as hereinafter provided.

              1.2.  Vesting Base Date. The parties hereby establish the date set
                    -----------------
forth in the Certificate as the Vesting Base Date (as defined below).

              1.3.  Type of Option. The Option shall be a "nonstatutory option."
                    --------------

              1.4.  Number of Option Shares. The number of shares of Company
                    -----------------------
Common Stock underlying the Option (the "Option Shares") is as set forth in the
Certificate.

          2.  Exercise Price. The exercise price for purchase of each share of
              --------------
Common Stock covered by this Option shall be the price set forth in the
Certificate.

          3.  Term. Unless otherwise specified in the Certificate or this
              ----
Agreement, this Option shall expire as provided in Section 7(b) of the Plan.

          4.  Corporate Transactions. In the event of the proposed dissolution
              ----------------------
or liquidation of the Company, the Administrator (as defined in the Plan) shall
notify Optionee at least 15 days before consummation of the proposed action. To
the extent not previously exercised, the Option will terminate immediately
before the consummation of the proposed action. In the event of a merger or
consolidation of the Company with or into another entity in which the Company is
not a surviving entity or in which the stockholders of the Company just before
that transaction do not, by virtue of those holdings, own securities
representing at least 50 percent of the ordinary voting power of the Company
immediately after that transaction, or in the event of a sale of all or
substantially all the assets of the Company in which the stockholders of the
Company receive securities of the acquiring entity or an affiliate thereof: (a)
if the successor entity so chooses, it shall assume the Option or issue
equivalent options when the transaction is consummated or (b) if the successor
entity chooses not to do that, then the Option shall be fully vested and
exercisable for a period of 15 days after the date notice is given under this
Section 4 and shall terminate upon expiration of that 15-day period.

                                       1
<PAGE>

          5.  Adjustment of Options. The Company shall adjust the number and
              ---------------------
kind of shares and the exercise price thereof in certain circumstances in
accordance with the provisions of Section 7(a) of the Plan and Section 4 hereof.

          6.  Exercise of Options.
              -------------------

              6.1  Vesting; Time of Exercise. This Option shall be exercisable
                   -------------------------
in full on the date of grant but shall be subject to a right of repurchase in
favor of the Company, at the exercise price per share, as to any unvested Option
Shares. This Option shall vest according to the schedule set forth in the
Certificate. Such schedule shall commence as of the date set forth in the
Certificate (the "Vesting Base Date").

              6.2  Termination as Director. Unless determined otherwise by the
                   -----------------------
Administrator in its absolute discretion, to the extent not already expired, the
Option shall terminate at the earlier of: (i) the expiration of the term of the
Option; or (ii) three months after the last day served by Optionee as a director
of the Company (the "Date of Termination"); provided, that the Option shall stop
                                            --------
vesting on the Date of Termination and exercises thereafter shall be only for
vested Option Shares; and provided further, that if termination of service as a
                          -------- -------
director is due to the Optionee's death or "disability" (as determined in
accordance with Section 22(e)(3) of the Internal Revenue Code), Optionee, or
Optionee's personal representative (or any other person who acquires the Option
from Optionee by will or the applicable laws of descent and distribution), may
at any time within 12 months after the Date of Termination (but in no event
after the expiration of the term of the Option), exercise the Option to the
extent Option Shares were vested on the Date of Termination. The Company shall
have three months after the Date of Termination to give notice of its intent to
repurchase Option Shares that were unvested on the Date of Termination. The
repurchase shall take place as soon as practicable after the date of such
notice.

              6.3  Manner of Exercise. Optionee may exercise this Option, or any
                   ------------------
portion of this Option, by giving written notice to the Company at its principal
executive office, to the attention of the officer of the Company designated by
the Plan Administrator, accompanied by payment of the exercise price and payment
of any applicable withholding or employment taxes. The date the Company receives
written notice of an exercise hereunder accompanied by payment will be
considered as the date this Option was exercised.

              6.4  Payment. Except as otherwise provided in the Certificate,
                   -------
payment of the exercise price per share is due in full upon exercise of all or
any part of the Option. Optionee may elect, to the extent permitted by
applicable statutes and regulations, to make payment of the exercise price under
one of the following alternatives: (i) payment of the exercise price per share
in cash (including check) at the time of exercise, (ii) payment pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of the Option Shares, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds, (iii)
provided that at the time of exercise the Company's Common Stock is publicly
traded and quoted regularly in the Wall Street Journal, payment by delivery of
already-owned shares of Common Stock, held for the period required to avoid a
charge to the Company's reported earnings, and owned free and clear of any
liens, claims, encumbrances or security

                                       2
<PAGE>

interests, which Common Stock shall be valued at its fair market value on the
date of exercise, or (iv) payment by a combination of the methods of payment
permitted by subparagraphs 6.4(i) through 6.4(iii) above. The proceeds of any
payment shall constitute general funds of the Company.

              6.5  Delivery of Certificate/Notice of Share Ownership. Promptly
                   -------------------------------------------------
after receipt of written notice of exercise of the Option, the Company shall
instruct its transfer agent to deliver to Optionee a certificate or certificates
for the requisite number of Option Shares or, in lieu thereof, paper or
electronic notification of share ownership in Optionee's brokerage account. The
Optionee shall not have any privileges as a stockholder of the Company with
respect to any Option Shares covered by the Option until the date of issuance of
the stock certificate or notice of share ownership for those Option Shares.

     7.       Nonassignability of Option. This Option is not, and unvested
              --------------------------
Option Shares are not, assignable or transferable by Optionee except by will or
by the laws of descent and distribution. During the life of Optionee, the Option
is exercisable only by Optionee. Any attempt to assign, pledge, transfer,
hypothecate or otherwise dispose of this Option or unvested Option Shares in a
manner not herein permitted, and any levy of execution, attachment, or similar
process on this Option or on unvested Option Shares, shall be null and void.

     8.       Restriction on Issuance of Shares.
              ---------------------------------

              8.1  Legality of Issuance. The Company shall not be obligated to
                   --------------------
sell or issue any Option Shares pursuant to this Agreement if such sale or
issuance, in the opinion of the Company or its counsel, might constitute a
violation by the Company of any provision of law, including without limitation
the provisions of the Securities Act of 1933, as amended (the "Securities Act").

              8.2  Compliance with Law. The Company shall not be obligated to
                   -------------------
take any affirmative action in order to cause the grant or exercise of this
Option or the issuance or sale of any Option Shares pursuant thereto to comply
with any law.

     9.       Restriction on Transfer. Regardless of whether the sale of the
              -----------------------
Option Shares has been registered under the Securities Act or has been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of Option Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company's counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of the
Securities Act, the securities laws of any state or any other law.

     10.      Stock Certificate. Stock certificates evidencing Option Shares may
              -----------------
bear such restrictive legends as the Company and the Company's counsel deem
necessary or advisable under applicable law or pursuant to this Agreement.

     11.      Assignment; Binding Effect. Subject to the limitations on
              --------------------------
assignment set forth in this Agreement, this Agreement shall be binding upon and
inure to the benefit of the executors, administrators, heirs, legal
representatives, and successors of the parties hereto.

                                       3
<PAGE>

     12.      Damages. Optionee shall be liable to the Company for all costs and
              -------
damages, including incidental and consequential damages, resulting from a
disposition of Option Shares that is not in conformity with the provisions of
this Agreement .

     13.      Governing Law. This Agreement shall be governed by, and construed
              -------------
in accordance with, the laws of the State of California excluding those laws
that direct the application of the laws of another jurisdiction.

     14.      Notices. All notices and other communications under this Agreement
              -------
shall be in writing or posted electronically on the AST Stockplan website.
Unless and until Optionee is notified in writing to the contrary, all notices,
communications, and documents directed to the Company and related to the
Agreement shall be delivered to:

              Maxygen, Inc.
              515 Galveston Drive
              Redwood City, CA  94063
              Attention: General Counsel

Unless and until the Company is notified in writing to the contrary, all
notices, communications, and documents directed to Optionee and related to this
Agreement shall be mailed to Optionee's last known address as shown on the
Company's books or posted electronically on the AST Stockplan website. Notices
and communications shall be delivered by hand, mailed by first class mail,
postage prepaid, sent by reputable overnight courier or posted electronically on
the AST Stockplan website. All mailings and deliveries related to this Agreement
shall be deemed received when actually received, if by hand delivery, two
business days after mailing, if by mail, the next business day after being sent
by reputable overnight courier, or 30 days after the date of posting for notices
posted electronically on the AST Stockplan website.

     IN WITNESS WHEREOF, the parties have entered into this Stock Option
Agreement as of the grant date set forth in the Certificate.

                              MAXYGEN, INC.

     Optionee accepts and agrees to be bound by all the terms and conditions of
this Agreement and the Plan.

                                       4

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