1999 Employee Stock Purchase Plan - Maxygen Inc.


                                 MAXYGEN INC.

                       1999 EMPLOYEE STOCK PURCHASE PLAN

                     (as amended effective April 1, 2001)

          1.  Purpose.  This Plan is intended to provide Employees of the
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Company and its Designated Subsidiaries an opportunity to purchase Common Stock
through accumulated payroll deductions.

          2.  Definitions.
              ----------- 

              (a) "Administrator" means the Board or the persons appointed by
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the Board to administer this Plan pursuant to Section 13.

              (b) "Board" means the Board of Directors of the Company.
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              (c) "Code" means the Internal Revenue Code of 1986, as amended.
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              (d) "Common Stock" means the Common Stock of the Company.
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              (e) "Company" means Maxygen, Inc., a Delaware corporation.
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              (f) "Compensation" means all regular, straight-time gross
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earnings, including commissions but exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, and bonuses.

              (g) "Continuous Employment" means the absence of any interruption
                   ---------------------
or termination of service as an Employee. Continuous Employment shall not be
considered interrupted in the case of a leave of absence agreed to in writing by
the Company, provided that either (i) the leave does not exceed 90 days or (ii)
re-employment upon expiration of the leave is mandated by contract or statute.

              (h) "Designated Subsidiaries" means the Subsidiaries that have
                   -----------------------
been designated by the Board from time to time in its sole
discretion to participate in this Plan.

              (i) "Employee" means any person, including an officer, who is
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customarily employed for at least 15 hours per week by the Company or one of its
Designated Subsidiaries. Whether an individual qualifies as an Employee shall be
determined by the Administrator, in its sole discretion, by reference to Section
3401(c) of the Code and the regulations promulgated thereunder; unless the
Administrator makes a contrary determination, the Employees of the Company
shall, for all purposes of this Plan, be those individuals who satisfy the
customary employment criteria set forth above and are carried as employees by
the Company or a Designated Subsidiary for regular payroll purposes.

 
              (j) "Purchase Date" means such business days during each Offering
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Period of this Plan as may be identified by the Administrator pursuant to
Section 8.

              (k) "Interim Offering Date" means the first business day of each
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month in an Offering Period after the Offering Date.

              (l) "Offering Date" means the first business day of an Offering
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Period.

              (m) "Offering Period" means a period established by the
Administrator pursuant to Section 4 during which payroll deductions are
accumulated from Participants and applied to the purchase of Common Stock.

              (n) "Participant" means an Employee who has elected to participate
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in this Plan pursuant to Section 5.

              (o) "Plan" means this Maxygen, Inc. 1999 Employee Stock Purchase
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Plan.
              
              (p) "Purchase Right" means a right to purchase Common Stock
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granted pursuant to Section 7.

              (q) "Subsidiary" means, from time to time, any corporation,
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domestic or foreign, of which not less than 50% of the voting shares are held by
the Company or another Subsidiary of the Company.

          3.  Eligibility.
              ----------- 

              (a) Regular Participation. Any person who is, or will be, an
                  ---------------------
Employee on an Offering Date shall be eligible to participate in this Plan
during the corresponding Offering Period, subject to the requirements of Section
5(a).

              (b) Interim Participation. Any person who becomes an Employee
                  ---------------------
after an Offering Date shall be eligible to participate in this Plan during the
corresponding Offering Period, but only on and beginning with the first Interim
Offering Date.

              (c) No Participation by Five-Percent Stockholders. Notwithstanding
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paragraphs (a) and (b) of this Section 3, an Employee shall not participate in
this Plan during an Offering Period if immediately after the grant of a Purchase
Right on the Offering Date or Interim Offering Date, the Employee (or any other
person whose stock would be attributed to the Employee under Section 424(d) of
the Code) would own stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or of any
Subsidiary. For this purpose, an Employee is treated as owning stock that he or
she could purchase by exercise of Purchase Rights or other options.

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          4.  Offering Periods.
              ---------------- 

              Unless otherwise determined by the Administrator:

              (a) the first Offering Period under this Plan shall begin on the
first business day before the effective date of a firmly underwritten initial
public offering of Common Stock and shall end on the last business day of March
2001;

              (b) the duration of each Offering Period (other than the first
Offering Period) shall be 12 months (measured from the first business day of the
first month to the last business day of the 12th month);

              (c) a new Offering Period shall begin on the first business day
after the last Purchase Date of an Offering Period; and

              (d) an Offering Period shall terminate on the first date that no
Participants are enrolled in it.

          5.  Participation.
              ------------- 

              (a) An Employee may become a Participant in this Plan by
completing a subscription agreement, in such form or forms as the Administrator
may approve from time to time, and delivering it to the Administrator at least
15 days before the applicable Offering Date or at any time prior to the Interim
Offering Date, unless another time for filing the subscription agreement is set
by the Administrator for all Employees with respect to a given Offering Period.
The subscription agreement shall authorize payroll deductions pursuant to this
Plan and shall have such other terms as the Administrator may specify from time
to time.

              (b) At the end of an Offering Period, each Participant in the
Offering Period who remains an Employee shall be automatically enrolled in the
next succeeding Offering Period (a "Re-enrollment") unless, in a manner and at a
time specified by the Administrator, but in no event later than the day before
the Offering Date of such succeeding Offering Period, the Participant notifies
the Administrator in writing that the Participant does not wish to be re-
enrolled. Re-enrollment shall be at the withholding percentage specified in the
Participant's most recent subscription agreement unless the Participant changes
that percentage by timely written notice. No Participant shall be automatically
re-enrolled whose participation has terminated by operation of Section 10.

          6.  Payroll Deductions.
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              (a) Each Participant shall have withheld a percentage of his or
her Compensation received during an Offering Period. Withholding shall be in
whole percentages, up to a maximum (not to exceed 15%) established by the
Administrator from time to time, as specified by the Participant in his or her
subscription agreement. Payroll deductions for a Participant during an Offering
Period shall begin with the first payroll following the Offering 

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Date or Interim Offering Date and shall end on the last Purchase Date of the
Offering Period, unless sooner terminated by the Participant as provided in
Section 10.

              (b)   All payroll deductions for a Participant shall be credited
to the Participant's account under this Plan. A Participant may not make any
additional payments into such account.

              (c)   A Participant may reduce the rate of his or her payroll
deductions to 0% at any time during an Offering Period, effective 15 days after
the Participant files with the Administrator a new subscription agreement
authorizing the change. A Participant may make other changes to the rate of his
or her payroll deductions during an Offering Period effective the business day
after the first Purchase Date that is at least 15 days after the Administrator's
receipt of a new subscription agreement authorizing the change.

          7.  Purchase Rights.
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              (a)   Grant of Purchase Rights.  On the Offering Date, or (if
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applicable) Interim Offering Date of an Offering Period, each Participant shall
be granted a Purchase Right to purchase during the Offering Period the number of
shares of Common Stock determined by dividing (i) $25,000 multiplied by the
number of (whole or part) calendar years in the Offering Period by (ii) the fair
market value of a share of Common Stock on the Offering Date or Interim Offering
Date.

              (b)   Terms of Purchase Rights. Except as otherwise determined by
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the Administrator, each Purchase Right shall have the following terms :

              (i)   The per-share price of the shares subject to a Purchase
                    Right shall be 85% of the lower of the fair market values of
                    a share of Common Stock on (a) the Offering Date, or Interim
                    Offering Date, on which the Purchase Right was granted and
                    (b) the Purchase Date. The fair market value of the Common
                    Stock on a given date shall be the closing price as reported
                    in the Wall Street Journal; provided, however, that if there
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                    is no public trading of the Common Stock on that date, then
                    fair market value shall be determined by the Administrator
                    in its discretion.

              (ii)  Payment for shares purchased by exercise of Purchase Rights
                    shall be made only through payroll deductions under 
                    Section 6.

              (iii) Upon purchase or disposition of shares acquired by exercise
                    of a Purchase Right, the Participant shall pay, or make
                    provision adequate to the Administrator for payment of, all
                    tax (and similar) withholdings that the Administrator
                    determines, in its discretion, are required due to the
                    acquisition or disposition, including without limitation any
                    such withholding that the Administrator determines in its
                    discretion is necessary to allow the Company and its

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                    Subsidiaries to claim tax deductions or other benefits in
                    connection with the acquisition or disposition.

              (iv)  During his or her lifetime, a Participant's Purchase Right
                    is exercisable only by the Participant.

              (v)   The Purchase Rights will in all respects be subject to the
                    terms and conditions of this Plan, as interpreted by the
                    Administrator from time to time.

          8.  Purchase Dates; Purchase of Shares; Refund of Excess Cash.
              --------------------------------------------------------- 

              (a)   The Administrator shall establish one or more Purchase Dates
for each Offering Period. Unless other wise determined by the Administrator,

              (i)   the last trading days of September 2000 and March 2001 shall
be the Purchase Dates of the initial Offering Period under this Plan, and

              (ii)  the last trading day of each February and August during a
subsequent Offering Period shall be a Purchase Date.

              (b)   Each Participant's Purchase Right shall be exercised
automatically on each Purchase Date during the Offering Period, to purchase the
maximum number of full shares at the applicable price using the Participant's
accumulated payroll deductions.

              (c)   The shares purchased upon exercise of a Purchase Right shall
be deemed to be transferred to the Participant on the Purchase Date.

              (d)   Any cash remaining in a Participant's payroll deduction
account after the purchase of shares on a Purchase Date shall be carried forward
in that account for application on the next Purchase Date; provided that upon
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termination of an Offering Period, any such cash shall be promptly refunded to
the Participant.

          9.  Registration and Delivery of Share Certificates.
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              (a)   Shares purchased by a Participant under this Plan will be
registered in the name of the Participant, or in the name of the Participant and
his or her spouse, or in the name of the Participant and joint tenant(s) (with
right of survivorship), as designated by the Participant.

              (b)   As soon as administratively feasible after each Purchase
Date, the Company shall deliver to the Participant a certificate representing
the shares purchased upon exercise of a Purchase Right. If approved by the
Administrator in its discretion, the Company may instead (i) deliver a
certificate (or equivalent) to a broker for crediting to the Participant's
account or (ii) make a notation in the Participant's favor of non-certificated
shares on the Company's stock records.

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          10. Withdrawal; Termination of Employment.
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              (a)    A Participant may withdraw all, but not less than all, the
payroll deductions credited to his account under this Plan at any time before a
Purchase Date by giving written notice to the Administrator in a form the
Administrator prescribes from time to time. The Participant's Purchase Right
will automatically terminate on the date of receipt of the notice, all payroll
deductions credited to the Participant's account will be refunded promptly
thereafter, and no further payroll deductions will be made during the Offering
Period.

              (b)    Upon termination of a Participant's Continuous Employment
for any reason, including retirement or death, the payroll deductions credited
to the Participant's account will be promptly refunded to the Participant or, in
the case of death, to the person or persons entitled thereto under Section 14 of
this Plan, and the Participant's Purchase Right will automatically terminate.

              (c)    A Participant's withdrawal from an offering will not affect
the Participant's eligibility to participate in a succeeding offering or in any
similar plan that may be adopted by the Company.

          11. Use of Funds; No Interest.
              ------------------------- 

              Amounts withheld from Participants' Compensation under this Plan
shall constitute general funds of the Company, may be used for any corporate
purpose, and need not be segregated from other funds. No interest shall accrue
on a Participant's payroll deductions.

          12. Number of Shares Reserved.
              ------------------------- 

              (a)    The following numbers of shares of Common Stock are
reserved for issuance under this Plan, and such number may be issued at any time
before termination of this Plan:

              (i)    Beginning the date of approval of this Plan by the
                     stockholders of the Company, 400,000 shares of Common
                     Stock; and

              (ii)   Beginning the first business day of each calendar year
                     starting January 1, 2001, the lesser of an additional (A)
                     200,000 shares of Common Stock, (B) 0.75% of the
                     outstanding shares of capital stock on such date or (C) an
                     amount determined by the Board.

              (b)    If the total number of shares that would otherwise be
subject to Purchase Rights granted on an Offering Date exceeds the number of
shares then available under this Plan (after deduction of all shares for which
Purchase Rights have been exercised or are then outstanding), the Administrator
shall make a pro-rata allocation of the available shares in a manner that it
determines to be as uniform and equitable as practicable. In such event, the
Administrator shall give written notice of the reduction and allocation to each
Participant.

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              (c)    The Administrator may, in its discretion, transfer shares
reserved for issuance under this Plan into a plan or plans of similar terms, as
approved by the Board, providing for the purchase of shares of Common Stock to
employees of Subsidiaries designated by the Board that do not (or do not
thereafter) participate in this Plan. Such additional plans may, without
limitation, provide for variances from the terms of this Plan to take into
account special circumstances (such as foreign legal restrictions) affecting the
employees of the designated Subsidiaries.

          13. Administration.
              -------------- 

              This Plan shall be administered by the Board or by such directors,
officers, and employees of the Company as the Board may select from time to time
(the "Administrator").  All costs and expenses incurred in administering this
Plan shall be paid by the Company, provided that any taxes applicable to an
Employee's participation in this Plan may be charged to the Employee by the
Company.  The Administrator may make such rules and regulations as it deems
necessary to administer this Plan and to interpret any provision of this Plan.
Any determination, decision, or action of the Administrator in connection with
the construction, interpretation, administration, or application of this Plan or
any right granted under this Plan shall be final, conclusive, and binding upon
all persons, and no member of the Administrator shall be liable for any such
determination, decision, or action.

          14. Designation of Beneficiary.
              -------------------------- 

              (a)    A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under this Plan in the event of the Participant's death.

              (b)    A designation of beneficiary may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant, and in the absence of a beneficiary validly designated under this
Plan who is living at the time of the Participant's death, the Administrator
shall deliver such shares and/or cash to the executor or administrator of the
Participant's estate, or if no such executor or administrator has been appointed
(to the Administrator's knowledge), the Administrator, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the Participant or, if no spouse, dependent, or relative is
known to the Administrator, then to such other person as the Administrator may
designate.

          15. Transferability.
              --------------- 

              Neither payroll deductions credited to a Participant's account nor
any rights with regard to the exercise of a Purchase Right or to receive shares
under this Plan may be assigned, transferred, pledged, or otherwise disposed of
in any way (other than by will, the laws of descent and distribution or as
provided in Section 14) by the Participant. Any such attempt at assignment,
transfer, pledge, or other disposition shall be without effect, except that the
Administrator may treat such act as an election to withdraw funds in accordance
with Section 10.

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          16.  Reports.
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               Individual accounts will be maintained for each Participant in
this Plan. Statements of account will be given to Participants promptly
following each Purchase Date, setting forth the amounts of payroll deductions,
per-share purchase price, number of shares purchased, and the remaining cash
balance, if any.

          17.  Adjustments upon Changes in Capitalization.
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               (a)   Subject to any required action by the stockholders of the
Company, the number of shares of Common Stock covered by each Purchase Right
that has not yet been exercised and the number of shares of Common Stock that
have been authorized for issuance under this Plan but have not yet been placed
under a Purchase Right (collectively, the "Reserves"), as well as the price per
share of Common Stock covered by each Purchase Right that has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
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that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Administrator, whose determination shall be final, binding, and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to a Purchase
Right.

               (b)   In the event of the proposed dissolution or liquidation of
the Company, the then-current Offering Period will terminate immediately before
the consummation of such proposed action, unless otherwise provided by the Board
or the Administrator (if the Administrator is not the Board). In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation (if stockholders of the
Company own less than 50% of the total outstanding voting power in the surviving
entity or a parent of the surviving entity after the merger), each Purchase
Right shall be assumed or an equivalent purchase right shall be substituted by
the successor corporation or a parent or subsidiary of the successor
corporation, unless the successor corporation does not agree to assume the
Purchase Right or to substitute an equivalent purchase right, in which case the
Administrator may, in lieu of such assumption or substitution, accelerate the
exercisability of Purchase Rights and allow Purchase Rights to be exercisable
(if the Board approves) as to shares as to which the Purchase Right would not
otherwise be exercisable, on terms and for a period that the Administrator
determines in its discretion. To the extent that the Administrator accelerates
exercisability of Purchase Rights as described above, it shall promptly so
notify all Participants in writing.

               (c)   The Administrator may, in its discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common
Stock covered by each outstanding Purchase Right, if the Company effects one or
more reorganizations, recapitalizations, rights 

                                       8

 
offerings, or other increases or reductions of shares of its outstanding Common
Stock, or if the Company consolidates with or merges into any other corporation.

          18.  Amendment or Termination.
               ------------------------ 

               (a)   The Board may at any time terminate or amend this Plan.  No
amendment may be made without prior approval of the stockholders of the Company
(obtained in the manner described in paragraph 20) if it would:

               (i)   Increase the number of shares that may be issued under this
                     Plan; or

               (ii)  Change the designation of the employees (or class of
                     employees) eligible for participation in this Plan.

               (b)   The Board may elect to terminate any or all outstanding
Purchase Rights at any time, except to the extent that exercisability of such
Purchase Rights has been accelerated pursuant to Section 17(b). If this Plan is
terminated, the Board may also elect to terminate Purchase Rights upon
completion of the next purchase of shares on the next Purchase Date or to permit
Purchase Rights to expire in accordance with their terms (with participation to
continue through such expiration dates). If Purchase Rights are terminated
before expiration, any funds contributed to this Plan that have not been used to
purchase shares shall be refunded to Participants as soon as administratively
feasible.

          19.  Notices.
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               All notices or other communications by a Participant to the
Company or the Administrator under or in connection with this Plan shall be
deemed to have been duly given when received in the form specified by the
Administrator at the location, or by the person, designated by the Administrator
for that purpose.

          20.  Stockholder Approval.
               -------------------- 

               This Plan shall be submitted to the stockholders of the Company
for their approval within 12 months after the date this Plan is adopted by the
Board.

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          21.  Conditions upon Issuance of Shares.
               ---------------------------------- 

               (a)   Shares shall not be issued with respect to a Purchase Right
unless the exercise of such Purchase Right and the issuance and delivery of such
shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

               (b)   As a condition to the exercise of a Purchase Right, the
Company may require the person exercising such Purchase Right to represent and
warrant at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of law.

          22.  Term of Plan.
               ------------ 

               This Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the stockholders of the
Company as described in Section 20.  It shall continue in effect for a term of
20 years unless sooner terminated under Section 18.


Plan adopted by the Board of Directors on September 29, 1999

Plan approved by the Stockholders on December 14, 1999

Plan amended by the Board of Directors on March 1, 2001

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