Vice President of Preclinical Development Reporting To Rodney Pearlman Employment Agreement

Exhibit 10.23


[MEGABIOS CORP. LOGO] Rodney Pearlman, Ph.D.
V.P. Research & Development


July 16, 1998 Revised


H. Denny Liggitt, DVM, Ph.D. 17905 Talbot Rd. Edmonds, WA 98026


Dear Denny:


This letter is an offer from Megabios Corp. (the "Company") to you for the position of Vice President of Preclinical Development reporting to Rodney Pearlman, Vice President Research & Development. The offer consists of the following. Additional details of the position are outlined in Appendix A, attached to this letter.


1. Annual salary of $165,000.


2. Incentive stock option grant: 65,000 options, each entitling you to
purchase one share of the Company's common stock. The exercise price of
this option is set by the Board of Directors based on the price at which
equity was most recently sold. The option will vest over a four-year
period beginning with the effective date of your employment.


3. Recognizing your desire to remain in the Seattle area, the Company will
pay reasonable expenses you incur in travel to the Bay Area, and we will
jointly work out a schedule for your visits here. We will help with
appropriate housing accommodations in the Bay Area.


4. The Company will provide support toward access to a laboratory in
Seattle, at a level to be negotiated. You may also maintain an
affiliate (or comparable) appointment at the University of Washington.


5. The Company will provide one headcount to support your laboratory in
Seattle.


6. You will be designated an Officer of the Company pending approval by the
Board of Directors.


7. You will be enrolled in the Company's corporate health care plan and are
entitled to all the corporate benefits for a Vice President level
position.


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