On October 30, 2008, the Compensation Committee of the Board of Directors of Avigen, Inc. approved an amendment and restatement of Avigen's Management Transition Plan. The Management Transition Plan is intended to attract and retain key executive talent for Avigen. An employee of Avigen becomes a participant in the Management Transition Plan only if Avigen delivers to that employee a Management Transition Plan Eligibility Notice. The amended and restated Management Transition Plan incorporates changes to comply with Section 409A of the Internal Revenue Code of 1986, as amended, as well as the amendments described below.

Benefits

A Participant in the Management Transition Plan will receive, if the Participant's employment with Avigen terminates due to an "involuntary termination" or a "constructive termination," as those terms are defined in the Management Transition Plan, the following benefits:

(a) salary continuation for the number of months designated in the Management Transition Plan Eligibility Notice given to the Participant;

(b) accelerated stock option vesting and extended exercisability as provided in the Management Transition Plan Eligibility Notice given to the Participant; and

(c) Avigen will pay the COBRA premiums for the Participant for the number of months designated in the Management Transition Plan Eligibility Notice given to the Participant, up to 18 months, or until such earlier date as the Participant becomes covered by a health plan of a subsequent employer.

Under the Management Transition Plan, as amended, the amount of a Participant's specific benefits may vary, depending on whether the Participant's employment with Avigen terminates within two months prior to or 12 months following a "change in control," as defined in the Management Transition Plan, or whether it occurs outside of a change in control. Prior to the amendment, Participants received the above benefits only if the Participant's employment with Avigen terminated due to an involuntary termination or a constructive termination within two months prior to or 18 months following a change in control.

The current named executive officers of Avigen who are Participants in the Management Transition Plan, and the terms of their participation, are:

                                 Within 2 months prior to or 12 months following a                      Outside of a
                                                 change in control                                   change in control
                                                               Option                                             Option
                                   Salary        Option        Extended      COBRA      Salary      Option        Extended      COBRA
         Name/Position          Continuation  Acceleration  Exercisability Payments  Continuation Acceleration Exercisability Payments
Kenneth G. Chahine, J.D., Ph.D.   21 months        Full        2 years     18 months  21 months       Full        2 years     18 months
President,
Chief Executive Officer

Andrew A. Sauter                  15 months        Full        2 years     15 months  15 months       Full        2 years     15 months
Chief Financial Officer

Michael D. Coffee                 15 months        Full        2 years     15 months  15 months       Full        2 years     15 months
Chief Business Officer

Kirk Johnson, Ph.D.               15 months        Full        2 years     15 months  15 months       Full        2 years     15 months
Vice President,
Research and Development

M. Christina Thomson, J.D.        15 months        Full        2 years     15 months  15 months       Full        2 years     15 months
Vice President,
Corporate Counsel

Plan Administrator and Review Panel

The Management Transition Plan has been amended to provide that Avigen will not be the Plan Administrator, as defined in the Management Transition Plan, following a change in control. Specifically, following a change in control, the Plan Administrator will be the individual serving as Chairman of the Board or as chairman of one of the committees of the Board immediately prior to the change in control, unless no such individual is willing to serve, in which case the Board will appoint a member of the Board to serve as the Plan Administrator. One of the duties of the Plan Administrator is to decide whether to pay benefits to Participants.

In addition, following a change in control, the Review Panel, as defined in the Management Transition Plan, will be the individual serving as Chairman of the Board or as chairman of one of the committees of the Board immediately prior to the change in control, as well as one or more individuals appointed by such individual. However, if neither the Chairman of the Board nor any chairman of any of the committees of the Board is willing to serve, the Board will appoint two or more members of the Board to serve as the Review Panel. One of the duties of the Review Panel is to review the decisions of the Plan Administrator.

Dispute Resolution

The Management Transition Plan has been amended to require arbitration of claims that remain unresolved by the Review Panel process outlined in the Management Transition Plan. In addition, in most cases Avigen is required to pay all costs and reasonable expenses, including reasonable attorneys' fees, relating to claims brought by Participants under the Management Transition Plan.

Trust Deposit

The Management Transition Plan has been amended to require that, within 10 days prior to a change in control, Avigen must deposit into a grantor trust an amount of cash sufficient to pay all benefits under the Management Transition Plan to which the Participants are entitled or may become entitled, as well as an amount sufficient to pay all costs and reasonable expenses that are anticipated to be paid to Participants relating to claims brought under the Management Transition Plan. Amounts relating to a particular Participant may revert from the trust back to Avigen if the Participant enters into a written employment agreement with a successor entity in the change in control. A similar deposit into a grantor trust is required with respect to benefits payable to a particular Participant, in the event of that Participant's involuntary termination or constructive termination prior to a change in control. In either case, amounts deposited in the trust remain subject to Avigen's creditors in the event of Avigen's bankruptcy or insolvency until paid to Participants or their beneficiaries.