Accordingly, Maxygen expects that NASDAQ will set the ex-dividend date for the distribution of cash as September 7, 2012, the first business day following the September 6, 2012 distribution date. This will mean that trades in Maxygen common stock entered into after the record date of August 21, 2012 and before September 7, 2012 (the “due bill period”) will have a due bill attached for the distribution of cash payable on September 6, 2012. Persons who purchase Maxygen common stock during the due bill period (even if the trade will settle after that due bill period) are entitled to receive the cash distribution, and persons who sell Maxygen common stock during the due bill period (even if the trade will settle after the due bill period) are not entitled to the cash distribution. Current stockholders who hold and do not sell their shares of Maxygen common stock prior to September 7, 2012 will be entitled to receive the cash distribution. Investors who enter into trades to purchase Maxygen common stock on or after September 7, 2012 will not be entitled to the cash distribution payable on September 6, 2012.For U.S. Federal income tax purposes, the distribution will be a dividend to the extent it is paid out of Maxygen’s current or accumulated earnings and profits, as determined under U.S. Federal income tax principles. Based on these rules, Maxygen currently estimates that less than 10% of the payment will be treated as a dividend for tax purposes, with the balance being a return of capital. This estimate is preliminary and subject to change based upon a comprehensive review and analysis of the company’s historical results as well as actual results for the entire 2012 taxable year. Stockholders will receive a Form 1099-DIV in early 2013 notifying them of the portion of the special cash distribution that is treated as a dividend for U.S. Federal income tax purposes. Stockholders are encouraged to consult with their own tax and financial advisors regarding the implications of this special distribution.