Chief Financial Officer Employment Agreement

EXHIBIT 10.10

AFFYMAX INC.
EXECUTIVE EMPLOYMENT AGREEMENT
for
Paul B. Cleveland

This Employment Agreement ("Agreement") is entered into by and between Paul B. Cleveland ("Executive") and Affymax Inc., (the "Company"), effective as of November 17, 2005.

Whereas, the Company desires to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for his services; and

Whereas, Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits;

Now, Therefore, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

1. EMPLOYMENT BY THE COMPANY.

1.1 Position. Subject to terms set forth herein, the Company agrees to employ Executive in the position of Chief Financial Officer and Executive Vice President, Corporate Development and Executive hereby accepts such employment effective as of January 2, 2006 (the "Employment Date"). During the term of his employment with the Company, Executive will devote his best efforts and substantially all of his business time and attention to the business of the Company, except for vacation periods as set forth herein and reasonable periods of illness or other incapacities permitted by the Company's general employment policies.

1.2 Duties and Location. Executive shall serve in an executive capacity and shall perform such duties as are customarily associated with his then current title, consistent with the Bylaws of the Company and as required by the Company's Board of Directors (the "Board"). Executive will report to the Chief Executive Officer. Executive's primary office location shall be the Company's corporate headquarters, currently located in Palo Alto, California. The Company reserves the right to reasonably require Executive to perform his duties at places other than its corporate headquarters from time to time, and to require reasonable business travel.

1.3 Policies and Procedures. The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control.

2. COMPENSATION.

2.1 Salary. Executive shall receive for services to be rendered hereunder an annualized base salary of $300,000, payable on a semi-monthly basis, subject to payroll withholding and deductions and payable in accordance with the Company's regular payroll schedule. Such salary shall be reviewed annually and may be increased as approved by the Board.

2.2 Bonus. Executive will be eligible to earn an annual bonus of up to 25% of base salary as determined by the Board of Directors upon the recommendations of its Compensation Committee and Chief Executive Officer and provided that Executive remains employed by the Company as of the date the bonus is calculated. Seventy-five percent (75%) of the bonus amount will be based on the Company's performance in meeting its planned operating objectives and twenty-five percent (25%) of

1


the bonus amount will be based on the Executive's performance against expectations of his position, as determined by the Company in its sole discretion.

2.3 Standard Company Benefits. Executive shall be entitled to all rights and benefits for which he is eligible under the terms and conditions of the standard Company benefits and compensation practices which may be in effect from time to time and provided by the Company to its employees generally.

2.4 Equity/Bonus Plan Compensation. Executive shall be granted rights to receive "Participating Units" equivalent to the cash value of 451,091 shares of Company Common Stock minus $0.40, pursuant to and as defined in the Company's Change of Control Bonus Plan (the "Unit Bonus"). Effective only upon the Company's "Change of Control" under a specific transaction and within a specific time frame, as further defined and provided in the Change of Control Bonus Plan, such Unit Bonus would become immediately vested and payable to Executive. In the event such "Change of Control" transaction does not occur and Executive accordingly does not receive such Unit Bonus payment, and subject to the approval of the Board, Executive shall be granted an option to purchase 451,091 shares of Company Common Stock (the "Option"), at fair market value as determined by the Board as of the date of grant, pursuant to the Company's 2001 Stock Option/Stock Issuance Plan (the "Plan"), such amount of shares being equal to approximately one percent (1%) of the Company's fully diluted shares as of the date of this Agreement. If Executive is granted the Option, upon the Company's receipt of the requisite cash payment by Executive, the Option shall be immediately exercisable for all or any portion of the option shares. Any such shares under the Option shall be subject to repurchase by the Company, at the option exercise price paid per share, until Executive vests in those shares. The Option shares will vest, and the Company's repurchase rights shall lapse, as follows: with twenty-five percent (25%) of the shares covered by the Option vesting on the first year anniversary of the vesting commencement date and the remaining seventy-five percent (75%) of the shares covered by the Option vesting in thirty-six (36) equal monthly installments thereafter, in accordance with the Company's standard vesting and exercisability policy, as long as the Executive remains in continuous service with the Company. The Option shall be governed by the terms and conditions set forth in the Plan, and in the applicable stock option agreement and grant document.

3. PROPRIETARY INFORMATION OBLIGATIONS.

3.1 Agreement. As a condition of employment, Executive agrees to execute and abide by the Proprietary Information and Inventions Agreement attached hereto as Exhibit A.

3.2 Remedies. Executive's duties under the Employee Proprietary Information and Inventions Agreement shall survive termination of his employment with the Company. Executive acknowledges that a remedy at law for any breach or threatened breach by him of the provisions of the Proprietary Information and Inventions Agreement would be inadequate, and he therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.

3.3 Third Party Agreements and Information. Executive represents and warrants that Executive's employment by the Company will not conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform his duties to the Company without violating any such agreement. Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, which would be used in connection with Executive's employment by the Company, except as expressly authorized by that third party. During Executive's employment by the Company, Executive will use in the performance of Executive's duties only information which is generally known and used by persons with training and experience comparable to Executive's own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive's work for the Company.

2


4. OUTSIDE ACTIVITIES DURING EMPLOYMENT.

4.1 Non-Company Business. Except with the prior written consent of the Company's Board of Directors, Executive will not during the term of this Agreement, undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor, provided that Executive agrees not to become engaged in any other business activity which, in the reasonable judgment of the Board, is likely to interfere with Executive's ability to discharge his duties and responsibilities to the Company. Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties hereunder.

4.2 No Adverse Interests. Except as permitted by Section 4.3, Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by him to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.

4.3 Noncompetition. During the term of his employment by the Company, except on behalf of the Company, Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which were known by him to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that anything above to the contrary notwithstanding, he may own, as a passive investor, securities of any competitor corporation, so long as his direct holdings in any one such corporation shall not in the aggregate constitute more than one percent (1%) of the voting stock of such corporation.

5. TERMINATION OF EMPLOYMENT.

5.1 At-Will Relationship. Executive's employment relationship is at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without cause or advance notice.

5.2 Termination Without Cause.

(a) The Company may terminate Executive's employment with the Company at any time without Cause, upon notice to Executive.

(b) In the event Executive's employment is terminated without Cause, the Company shall provide Executive the following severance benefits: (i) a lump sum cash severance payment equal to six (6) months of Executive's then current annual base salary, less applicable withholdings and deductions; (ii) if Executive timely elects continued Company provided group health insurance coverage pursuant to federal COBRA law, the Company will pay Executive's COBRA premiums sufficient to maintain his group health insurance coverage in effect as of the date of the termination for twelve (12) months following the termination, provided that the Company's obligation to continue to pay Executive's COBRA premiums hereunder will cease immediately upon Executive's eligibility for equivalent group health insurance coverage through a new employer; (iii) Executive will have the ability to exercise any vested stock option shares granted to Executive by the Company until one (1) year following the date of the termination or the expiration of the term of any such options, whichever occurs earlier.

5.3 Termination for Cause.

(a) The Company may terminate Executive's employment with the Company at any time for Cause, upon notice to Executive.

(b) "Cause" for termination shall mean: indictment or conviction of any felony or of any crime involving dishonesty; participation in any fraud against the Company; breach of Executive's duties to the Company, including persistent unsatisfactory performance of job duties; intentional damage to any property of the Company; conduct by Executive which in the good faith and

3


reasonable determination of the Board demonstrates gross unfitness to serve; incapacity to perform the essential functions of Executive's job for a period of ninety (90) consecutive days; or death.

(c) In the event Executive's employment is terminated at any time with Cause, he shall be entitled to receive his base salary, and his accrued but unused paid time off earned through the date of termination; Executive will not be entitled to severance pay, pay in lieu of notice or any other such compensation, except as may be provided in the Company's severance benefit plan, if any, in effect on the termination date, or except as required by law.

5.4 Termination for Good Reason.

(a) Executive may voluntarily terminate his employment for "Good Reason" by notifying the Company in writing, within ten (10) days after the occurrence of one of the following events, that Executive intends to terminate his employment for Good Reason in thirty (30) days:

(i) the assignment to Executive of any duties or responsibilities which result in the material diminution of Executive's position; provided, however, that the acquisition of the Company and subsequent conversion of the Company to a division or unit of the acquiring corporation will not by itself result in a diminution of Executive's position;

(ii) a reduction by the Company in Executive's annual base salary by greater than fifteen percent (15%), except to the extent the base salaries of other executive officers of the Company are accordingly reduced;

(iii) a relocation of Executive, or the Company's principal executive offices by more than forty (40) miles, except for required travel by Executive on the Company's business;

(b) In the event Executive terminates his employment for Good Reason, the Company shall provide Executive as severance the benefits as described above in Section 5.2(b).

5.5 Voluntary or Mutual Termination.

(a) Executive may voluntarily terminate his employment with the Company at any time, after which no further compensation will be paid to Executive.

(b) In the event Executive voluntarily terminates his employment other than for "Good Reason", he will not be entitled to severance pay, pay in lieu of notice or any other such compensation.

5.6 Change in Control.

(a) Definition. For the purposes of this Agreement, a "Change in Control" shall mean a merger or consolidation of the Company with, or any sale of all or substantially all of the assets of the Company, to any other person, corporation or entity, unless as a result of such merger, consolidation or sale of assets the holders of the Company's voting securities prior thereto hold at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving or successor corporation after such transaction.

(b) Accelerated Vesting. Executive shall receive accelerated vesting of all then unvested shares of the Company's Common Stock referred to in Section 2.4 of this Agreement that he then may have, if any, if a Change in Control of the Company directly results in the involuntary termination without Cause of Executive's employment, within six (6) months after the close of the Change in Control transaction.

6. RELEASE. Upon the termination of Executive's employment, Executive shall provide the Company with an executed and effective general release substantially in the form attached hereto as Exhibit B (the "Release"), as a condition of receipt of any severance benefits, extended exercise period, or accelerated vesting under Section 5 of this Agreement.

4


7. NONINTERFERENCE.

While employed by the Company, and for two (2) years immediately following the Termination Date, Executive agrees not to interfere with the business of the Company by:

(a) soliciting, attempting to solicit, inducing, or otherwise causing any employee of the Company to terminate employment in order to become an employee, consultant or independent contractor to or for any other person or entity of the Company; or

(b) directly or indirectly soliciting the business of any customer of the Company which at the time of termination or one year immediately prior thereto was listed on the Company's customer list.

8. COOPERATION WITH COMPANY.

8.1 Cooperation Obligation. During and after the term of Executive's employment, Executive will cooperate with the Company in responding to the reasonable requests of the Company's Chairman of the Board, CEO or General Counsel, in connecti ...