**Exhibit 10.69**

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# **CONFIDENTIAL—VIA HAND DELIVERY**

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# February 25, 2005

 

 

PatrickMurphy

c/oAbgenix, Inc.

6701Kaiser Drive

Fremont,CA 94555

 

 

**Re:****                            ****Separation Agreement**

 

DearPat:

 

This letter will constitute theagreement between you and Abgenix, Inc. (“Abgenix” or the “Company”) onthe terms of your separation from employment with the Company.  As set forth in paragraph 14 below, thisagreement will become a binding legal agreement, effective on the eighth dayafter you have signed it and returned it to me. I encourage you to obtain legal advice before signing it if you desireto do so.

 

1.                                       Transition and Termination Date.  Theterm of this agreement is from March 1, 2005 through February 28,2006.  We have previously discussed thetermination of your employment at Abgenix. As discussed, your employment with Abgenix will continue and willterminate six (6) months from March 1, 2005, i.e., August 31,2005 (the “Termination Date”), unless by mutual written consent the consultingperiod begins sooner, as discussed below, in which case the Termination Datewill be the date that the consulting period actually begins.  From now until the Termination Date, youagree that you will assist in performing your job functions, facilitating thetransfer of your duties to other employees or consultants and engaging in anyspecial projects in keeping with your prior role as may be reasonably requiredby Abgenix management.  I will be yourprimary contact at Abgenix to coordinate communication regarding yourtransition services.  You and I willagree on when you will be required to be present on site for these services,and we will certainly be flexible in accommodating your efforts in pursuing newopportunities.  In that regard, Iunderstand that you will generally be on-site through March 23, withreduced time on site thereafter.  You maybe required to provide customary reports or other work product appropriate forthe work undertaken.  From the date ofthis letter until the Termination Date, your title will be Senior Vice President,but your signature on this letter will constitute your resignation as acorporate officer, effective immediately.

 

2.                                       Continued Pay; Consulting Period.  Youwill continue to be paid your salary at the rate of $21,250 per month throughthe Termination Date, and will also be paid any accrued and unused vacation payor personal time off as of that date, less usual withholding anddeductions.  You will not be eligible forany further salary action during that period. Vacation will not accrue after February 28, 2005.  You will not be eligible for a bonus awardunder the Company’s bonus plan for the year 2005.  Following the Termination Date, you will bepaid for consulting services to Abgenix for an additional period beginning onthe Termination Date and ending on February 28, 2006 (the “ConsultingTermination Date”), for services to be provided on mutually agreeable dates,times and places.  We will continue topay you at the rate stated above, regardless of the amount of time spent on anyconsulting projects for Abgenix.  We willmutually agree with you in advance on any expected deliverables or workproduct, supporting invoices and the like, which are appropriate for the workundertaken.  We understand that you mayhave other full-time employment during that period and will be very flexible inany requests for your time and efforts.

 

3.                                       Benefits—Health Insurance.  Wewill continue to make benefits payments on your behalf until the earlier of (i) theConsulting Termination Date, or (ii) the date you start receiving healthinsurance benefits under another plan, after which date, you may continue toreceive COBRA benefits at your own expense, to the extent you areeligible.  During that time we willdeduct benefits payments in your current 

 

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amountsand as currently selected by you from the payments we make to you, unless youinstruct us otherwise in writing.  Anymedical, vision and dental plan coverage (herein referred to as healthinsurance) you have will end as of the Termination Date, subject to COBRA continuationrights from that date. Following the date specified in the first sentence ofthis paragraph, you will be responsible for the full amount of any COBRAcontinuation premiums for any coverage you may elect.  Nothing in this agreement will impair yourCOBRA rights in that regard.  Pleasenotify us promptly, and we will inquire with you periodically, if you obtainother employment so that we can coordinate benefit coverage termination if youdesire.  Youwill receive by separate cover information regarding your rights to healthinsurance continuation (COBRA benefits).

 

4.                                       Other benefits.  Anylife, long-term disability and accidental death and dismemberment or otherinsurance provided by Abgenix will also end on the Termination Date. You maygenerally apply to convert this coverage at your expense to an individualpolicy within a certain period as described in the first sentence of thisparagraph, subject to requirements of the individual insurers.  If you are presently contributing a portionof your salary to the Company flex benefit program, you will be permitted tocontinue to do so through the Termination Date, at which time yourparticipation in that program would end. The total account value of your vested interest, if any, in the Abgenix401(k) plan will be available for withdrawal, but does not have to be withdrawnimmediately, after the Termination Date (subject to the requirements of theplan).  Executive outplacement serviceswill be made available to you at our expense, not to exceed $10,000.00, throughthe DBM Executive Program upon your request. Additional information can be obtained through Kristen Metza Anderson inHuman Resources.

 

5.                                       Stock Options.  Asof the date of this letter you will not receive further grants of stockoptions.  Your rights with regard to yourexisting Abgenix stock options, including those described in the compensationchanges based on your 2004 performance letter, will be determined under theapplicable option agreement.  Please notethat you have a specified period of time to exercise any vested stockoptions.  For purposes of the vesting,exercise and other provisions of those agreements, your employment isterminated as of the Consulting Termination Date, and your options willcontinue to vest through that date, and not thereafter.  You will have the period stated in theapplicable option agreement, typically ninety (90) days after the ConsultingTermination Date, to exercise vested options. Nothing in this letter is intended to or shall extend the actual dates forvesting beyond the Consulting Termination Date, or extend the date for exerciseof any stock options, except to the extent stated in this paragraph.

 

6.                                       CompanyItems.  Upon theTermination Date, you will return to the Company any building keys, securitypass, or other access or identification cards (including any business cards)and any Company property that is currently in your possession, including anydocuments, credit cards, computer equipment and mobile phones. By no later thanthe Termination Date, you will also clear all expense accounts and pay allpersonal expense amounts, if any, owed on any corporate credit card(s) whichthe Company previously issued to you. For purposes of making payments to you under Paragraph 7 below, and sothat we may communicate with you if needed, please provide us with notice ifyour personal residence changes.

 

7.                                       Waiverand Release.  In consideration ofyour services under this separation agreement, and the release provided below,Abgenix will provide you with the continued salary, consulting and COBRApayments and other benefits contained in this letter.  Each of these benefits is contingent on yourcompliance with this agreement.   Therefore,on behalf of yourself and your representatives, agents, heirs and assigns, youwaive, release, discharge and promise never to assert any and all claims,liabilities or obligations of every kind and nature, whether known or unknown,suspected or unsuspected that you ever had, now have or might have as of thedate you sign this agreement, against the Company and its predecessors,subsidiaries, related entities, and their officers, directors, shareholders,agents, attorneys, employees, successors, assigns, representatives and heirs.

 

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The released claims include, withoutlimitation, any claims arising from or related to your employment with theCompany, the separation of your employment with the Company, and/or theexecution of this agreement. The claims also specifically include, withoutlimitation, any claims arising under any federal, state and local statutory orcommon law, such as Title VII of the Civil Rights Act, the Age Discriminationin Employment Act, the Older Workers’ Benefit Protection Act, the CaliforniaFair Employment and Housing Act, the Americans With Disabilities Act, theEmployee Retirement Income Security Act, the Fair Labor Standards Act, theCalifornia Labor Code (all as amended), the law of contract and tort, and anyclaim for attorneys’ fees.

 

You also waive and release andpromise never to assert any such claims, even if you do not know or believethat you have such claims. You therefore waive your rights under section 1542of the California Civil Code, which states:

 

**A general release does not extend to claims that the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known to him must have materially affected his settlement with the debtor.**

 

In short, you agree that you willnot bring any lawsuits or claims of any kind against any of the releasedparties identified above and will not accept the benefits of any lawsuits orclaims of any kind brought on your behalf against them.

 

To my knowledge, there are no knownclaims by the Company against you, and we have no present intention of pursuingany claims.

 

8.                                       Non-disparagement.  You agree to refrain from making anyderogatory or disparaging statements to any person or third parties about theCompany or any of its officers, directors, products or services.  The Company agrees to direct each of thecurrent members of its Board of Directors, its current named executiveofficers, and its human resources and legal departments, to refrain from makingany derogatory or disparaging statements to any person or third parties aboutyou, and the Company takes responsibility for their compliance with thisnon-disparagement promise.

 

9.                                       Confidentiality;non-solicitation.  Unless required bycourt order or law, you will not disclose to anyone any information regardingthe terms of this agreement, the benefits being paid to you under it or thefact that a payment was made to you, except that you may disclose thisinformation to your spouse, attorney, accountant or other professional advisorto whom you must make the disclosure in order for them to render professionalservices to you.  You may also disclosethis information to the State of California’s Employment DevelopmentDepartment, Workers’ Compensation Appeals Board, and Fair Employment andHousing Commission or Department of Fair Employment and Housing, and/or to theUnited States Equal Employment Opportunity Commission.  In such circumstances, however, you willinstruct them to maintain the confidentiality of this information just as youmust.  You may also disclose the existenceof the employment and/or consulting arrangement to any prospective employer orclient. Abgenix will not disclose any information regarding terms of thisagreement to anyone other than required by law (or to obtain professionaladvice on this agreement).  Further, youwill not disclose to anyone any confidential or proprietary informationregarding the Company’s practices, procedures, trade secrets, customer lists ormarketing strategies, without prior written permission from the CEO of theCompany or unless required by court order. You acknowledge the highly confidential nature of confidential orproprietary information regarding the Company’s customers, affiliates andemployees. You agree that, for a period of one year following the Effective Date,you will not solicit for employment, divert or take away, or attempt to solicitfor employment, divert or take away, any employees of the Company with whom youbecame acquainted as a result of your employment with the Company.

 

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10.                                 Changeof Control and Company’s Successors.  In the event of a Change of Control of theCompany or the coming into existence of a Successor to the Company’s business,the Company agrees that all terms of this agreement shall remain in full forceand effect and shall continue to bind the Company as well as binding any entityexisting after a Change of Control and/or any Successor entity, which entitiesshall be required by the Company to execute and deliver an assumption agreementagreeing to assume the obligations in this agreement to the extent that thesuccessor does not become bound by operation of law; notwithstanding any suchassumption agreement by any entity existing after a Change of Control or anySuccessor entity, the obligations under this agreement shall remain the Company’sobligations and the Company guarantees compliance with those obligations in theevent of any failure to comply by any entity existing after a Change of Controlor any Successor entity.  For purposes ofthis agreement, the terms “Change of Control”, “Successor” and “assumptionagreement” shall be defined as defined or described in paragraphs 1(b) and6(a) of the Abgenix, Inc. Change of Control Severance Agreemententered into as of May 15, 2000 between Patrick M. Murphy and Abgenix.

 

11.                                 EmploymentVerification: Upon receiving a request for employment verification or areference check, in addition to typical information provided by the Company(dates of employment, position/title held, confirmation of compensation), theinformation in Attachment A will be offered by the Company to the inquiringparty. All such requests or reference checks will be directed to Kristen MetzaAnderson, Senior Vice President of Human Resources.

 

12.                                 Remedies.  In the event that you or the Company breachany of your or its obligations under this agreement or as otherwise imposed bylaw and you or the Company are/is adjudged by an arbitrator or court ofcompetent jurisdiction to have so breached, the Company (in the event of youradjudged breach) will be entitled to discontinue your separation pay and you(in the event of the Company’s adjudged breach) will be entitled to ceasecomplying with your obligations under this agreement, and the Parties may eachobtain injunctive relief and all other relief provided by law or equity.  Any dispute over a breach of this agreementwill not affect the validity and enforceability of your releases and waiverscontained herein.

 

13.                                 Choiceof law.  This agreement willin all respects be interpreted and governed under the laws of the State ofCalifornia.

 

14.                                 RevocationRight.  **Pursuant to the Older Workers Benefit Protection Act,you acknowledge that you have up to 21 days from the date of this letter toconsider and accept the terms of this agreement (although you may accept it atany time within those 21 days) and that you were advised to consult with anattorney about this agreement before signing it. To accept the agreement,please date and sign this letter and return it to me.  Once you do so, you will have an additionalseven days in which to revoke your acceptance. To revoke, you must send me a written statement of revocation by asigned notice by fax or overnight courier, in either case received within thatseven-day period. If you do not timely revoke, the eighth day after the date ofyour signature will be the “Effective Date” of this agreement**.

 

15.                                 Integration.  Except as set forth in this agreement, thereare no representations, promises or understandings between you and the Companyabout or pertaining to the termination of your employment with the Company, orthe Company’s obligations to you with respect to your employment or any othermatter mentioned above.  This agreementtherefore supersedes any prior written or oral representations, promises,agreements and understandings regarding any of the matters discussed above,except for any agreements that expressly have continuing effect following theTermination Date as set forth in this agreement (including your Employment, Confidential Information and InventionsAgreement with the Company, a copy of which will be provided on your request,the Indemnification Agreement dated May 15, 2000, and any stock optionagreements between the Company and you). This agreement, once effective, cannot be amended or modified by you without the prior written consent of theundersigned or 

 

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Abgenix’sGeneral Counsel, which consent must refer specifically to this paragraph ofthis agreement.

 

16.                                 Disputes.  We agree that any futuredisputes between you and the Abgenix Parties, including but not limited to,disputes arising out of or related to this agreement, shall be identified inwriting by the complaining party to the other party, and if not resolved aftergood faith discussion between us, shall be resolved exclusively by bindingarbitration to be conducted in San Francisco, California before the AmericanArbitration Association under the California Employment Dispute ResolutionRules.  The arbitrator(s) shall not havethe authority to modify, change or refuse to enforce the terms of thisagreement.   The Company shall pay allarbitrator fees relating to any such arbitration.  However, each party shall pay its own costs,including reasonable attorneys’ fees and costs, of any such arbitration,regardless of the outcome.

 

17.                                 Interpretation.  Section headingsare included for convenience only, and shall not be used in the interpretationof this agreement.  If any part of thisagreement is held to be invalid, void or unenforceable, then the rest of theagreement shall remain in full force and effect, and the parties shall usetheir best efforts to reach a mutually acceptable alternative to achieve thenearest possible result.

 

18.                                 Expiration.  This letter will remain openfor the twenty-one day period stated above, i.e., through March 18, 2005,unless revoked by Abgenix in writing ahead of that time.  Your return of a signed original to me (orfax to my attention received at 510-608-6547, followed by original hard copy byovernight courier for next day delivery) no later than 5:00 p.m. on thatdate will constitute acceptance of this agreement.  If we have not received your signedacceptance by that time, this offer of an agreement will expire without furthernotice or action.

 

The Company and Iappreciate your cooperation during this transition, Pat, and wish you everysuccess in your future endeavors.

 

Sincerely,

 
| /s/ William R. Ringo |   |   |
|----------------------|--------|--------|
| William R. Ringo     |   |
| President and CEO    |   |

 

 

My signature below signifiesmy agreement with the above terms. Further, I acknowledge that I have read and understand this agreementand that I sign this release of all claims voluntarily, with full understandingthat at no time in the future may I pursue any of the rights I have waived inthis agreement.

 

 
| /s/ Patrick M. Murphy |   |   | March 18, 2005 |   |
|-----------------------|--------|--------|---------------------|--------|
| Patrick M. Murphy     |   | Date   |

 

c/oAbgenix, Inc.

6701Kaiser Drive

Fremont,CA 94555

 

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