Description of Executive Officer Cash Bonus Plan

Exhibit 10.1

Description of Executive Officer Cash Bonus Plan

     Maxygen, Inc. (the “Company”) maintains an annual cash bonus plan for executive officers of the Company that is designed to ensure that a significant portion of each executive officer’s compensation is placed at risk and linked to the accomplishment of specific results that are expected to lead to the creation of value for stockholders from both a short-term and long-term perspective.

     Under the cash bonus plan, annual bonus amounts are based on a percentage of the executive officer’s base salary, subject to a specific bonus range and bonus target, and are determined based on the achievement of certain performance objectives. The specific bonus ranges, bonus targets and performance objectives are generally reviewed by the Compensation Committee on an annual basis. Bonus payments are paid in one annual payment shortly after the end of each calendar