Exhibit
10.89


 


ABGENIX,
INC.


 


CHANGE OF CONTROL SEVERANCE AGREEMENT


 


This Change of Control
Severance Agreement (the “Agreement”) is made and entered into effective as of August 30,
2004 (the “Effective Date”), by and between William R. Ringo (the “Employee”)
and Abgenix, Inc., a Delaware corporation (the “Company”).  Certain capitalized terms used in this
Agreement are defined in Section 1 below.


 


RECITALS


 


A.                                   It
is expected that the Company from time to time will consider the possibility of
a Change of Control.  The Board of
Directors of the Company (the “Board”) recognizes that such consideration can
be a distraction to the Employee and can cause the Employee to consider
alternative employment opportunities.


 


B.                                     The
Board believes that it is in the best interests of the Company and its
shareholders to provide the Employee with an incentive to continue his
employment and to maximize the value of the Company upon a Change of Control
for the benefit of its shareholders.


 


C.                                     In
order to provide the Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the possibility of a
Change of Control, the Board believes that it is imperative to provide the
Employee with certain severance benefits upon the Employee’s termination of
employment following a Change of Control.


 


AGREEMENT


 


In consideration of the
mutual covenants herein contained and the continued employment of Employee by
the Company, the parties agree as follows:


 


1.             Definition of Terms.  The following terms referred to in this
Agreement shall have the following meanings:


 


(a)                                  Cause.  “Cause” shall mean (i) any act of
personal dishonesty taken by the Employee in connection with his
responsibilities as an employee which is intended to result in substantial
personal enrichment of the Employee, (ii) Employee’s conviction of a
felony which the Board reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business, (iii) a
willful act by the Employee which constitutes misconduct and is injurious to
the Company, and (iv) continued willful violations by the Employee of the
Employee’s obligations to the Company after there has been delivered to the
Employee a written demand for performance from the Company which describes the
basis for the Company’s belief that the Employee has not substantially
performed his duties.


 


(b)                                 Change
of Control.  “Change of Control”
shall mean the occurrence of any of the following events:


 





















 


(i)                                                        the
approval by shareholders of the Company of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger or
consolidation;


 


(ii)                                                     any
approval by the shareholders of the Company of a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets;


 


(iii)                                                  any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined
in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities; or


 


(iv)                                                 a
change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors
who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transaction described in
subsections (i), (ii) or (iii) or in connection with an actual or
threatened proxy contest relating to the election of directors of the Company.


 


(c)                                  Compensation
Continuation Period.  “Compensation
Continuation Period” shall mean the period of time commencing with termination
of the Employee’s employment as a result of Involuntary Termination at any time
within twenty four (24) months after a Change of Control and ending with the
date twenty-four (24) months following the date of the Employee’s termination.


 


(d)                                 Involuntary
Termination.  “Involuntary
Termination” shall mean (i) without the Employee’s express written
consent, a significant reduction of the Employee’s duties, position or
responsibilities relative to the Employee’s duties, position or
responsibilities in effect immediately prior to such reduction, or the removal
of the Employee from such position, duties and responsibilities, unless the
Employee is provided with comparable duties, position and responsibilities;
(ii) without the Employee’s express written consent, a substantial
reduction, without good business reasons, of the facilities and perquisites
(including office space and location) available to the Employee immediately
prior to such reduction; (iii) a reduction by the Company of the Employee’s
base salary or target bonus as in effect immediately prior to such reduction;
(iv) a material reduction by the Company in the kind or level of employee
benefits to which the Employee is entitled immediately prior to such reduction
with the result that the Employee’s overall benefits package is significantly
reduced; (v) without the Employee’s express written consent, the
relocation of the Employee to a facility or a location more than thirty-five
(35) miles from his current location; (vi) any purported termination of
the Employee by the Company which is not effected for Cause or


 


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for which the
grounds relied upon are not valid; or (vii) the failure of the Company to
obtain the assumption of this Agreement by any successors contemplated in Section 6
below.


 


2.                                       Term
of Agreement.  This Agreement shall
terminate upon the date that all obligations of the parties hereto under this
Agreement have been satisfied.


 


3.                                       At-Will
Employment.  The Company and the
Employee acknowledge that the Employee’s employment is and shall continue to be
at-will, as defined under applicable law. 
If the Employee’s employment terminates for any reason, the Employee
shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
established under the Company’s then existing employee benefit plans or
policies at the time of termination.


 


4.                                       Change
of Control and Severance Benefits.


 


(a)                                  Termination
Following A Change of Control.


 


(i)                                          Severance
Payments.  If the Employee’s
employment with the Company terminates as a result of an Involuntary
Termination at any time within twenty four (24) months after a Change of Control,
then the Employee shall be entitled to receive continuing payments of severance
pay during the Compensation Continuation Period at a rate equal to one hundred
(100)% of the Employee’s base salary and target bonus (as in effect immediately
prior to the Change of Control).  Such
severance payments shall be paid bi-weekly in accordance with the Company’s
normal payroll practices. In addition, during the Compensation Continuation
Period, the Company shall continue to make available to the Employee and Employee’s
spouse and dependents covered under any group health plans or life insurance
plans of the Company on the date of such termination of employment, all group
health, life and other similar insurance plans in which Employee or such
Covered Dependents participate on the date of the Employee’s termination.


 


(ii)                                       Option
Acceleration.  If the Employee’s
employment with the Company terminates as a result of an Involuntary
Termination at any time within twenty four (24) months after a Change of
Control, then each option granted to the Employee by the Company (the “Options”)
shall immediately become vested and exercisable in full.


 


(iii)                                    Other
Termination.  If the Employee’s
employment with the Company terminates other than as a result of an Involuntary
Termination at any time within twenty four (24) months after a Change of
Control, then the Employee shall not be entitled to receive severance or other
benefits hereunder, but may be eligible for those benefits (if any) as may then
be established under the Company’s then existing severance and benefits plans
and policies at the time of such termination.


 


(b)                                 Termination
Apart from a Change of Control.  If
the Employee’s employment with the Company terminates for any or no reason
other than within twenty four (24) months following a Change of Control, then
the Employee shall not be entitled to receive severance or other benefits
hereunder, but may be eligible for those benefits (if any) as may then be
established under


 


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the Company’s then
existing severance and benefits plans and policies at the time of such
termination.


 


(c)                                  Accrued
Wages and Vacation; Expenses. 
Without regard to the reason for, or the timing of, Employee’s
termination of employment:  (i) the
Company shall pay the Employee any unpaid base salary due for periods prior to
the date of termination; (ii) the Company shall pay the Employee all of
the Employee’s accrued and unused vacation through the date of termination; and
(iii) following submission of proper expense reports by the Employee, the
Company shall reimburse the Employee for all expenses reasonably and
necessarily incurred by the Employee in connection with the business of the
Company prior to the date of termination. 
These payments shall be made promptly upon termination and within the
period of time mandated by law.


 


5.                                       Golden
Parachute Excise Tax Gross-Up.  In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to Employee constitute “excess parachute payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”), and will be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then Employee shall receive (i) a payment
from the Company sufficient to pay the Excise Tax, and (ii) an additional
payment from the Company sufficient to pay the Excise Tax arising from the
payments made by the Company to Employee pursuant to this sentence.  Unless the Company and Employee otherwise agree
in writing, the determination of Employee’s Excise Tax liability and the amount
required to be paid under this Section 5 shall be made in writing by the
Company’s independent public accountants (the “Accountants”).  In the event that the Excise Tax incurred by
Employee is determined by the Internal Revenue Service to be greater or lesser
than the amount determined by the Accountants, the Company and Employee agree
to promptly make such additional payment, including interest and any tax
penalties, to the other party as the Accountants reasonably determine is
appropriate to ensure that the net economic effect to Employee under this Section 5,
on an after-tax basis, is as if the Excise Tax did not apply to Employee.  For purposes of making the calculations required
by this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations of the Code.  The
Company and Employee shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section.  The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 5.


 


The
gross-up payment to which Employee is entitled hereunder shall be paid by the
Company to Employee, in cash and in full, not later than thirty (30) calendar
days following the date Employee becomes subject to the Excise Tax.


 


6.                                       Successors.


 


(a)                                  Company’s
Successors.  Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets shall assume the Company’s obligations under
this Agreement and agree expressly to perform the Company’s obligations under
this Agreement in the same manner and to the same extent as the Company would
be required to perform


 


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such obligations
in the absence of a succession.  For all
purposes under this Agreement, the term “Company” shall include any successor
to the Company’s business and/or assets which executes and delivers the
assumption agreement described in this subsection (a) or which becomes
bound by the terms of this Agreement by operation of law.


 


(b)                                 Employee’s
Successors.    Without the written
consent of the Company, Employee shall not assign or transfer this Agreement or
any right or obligation under this Agreement to any other person or entity.
Notwithstanding the foregoing, the terms of this Agreement and all rights of
Employee hereunder shall inure to the benefit of, and be enforceable by,
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.


 


7.                                       Notices.


 


(a)                                  General.  Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid.  In the case of the Employee, mailed notices
shall be addressed to him at the home address that he most recently
communicated to the Company in writing. 
In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Secretary.


 


(b)                                 Notice
of Termination.  Any termination by
the Company for Cause or by the Employee as a result of a voluntary resignation
or an Involuntary Termination shall be communicated by a notice of termination
to the other party hereto given in accordance with this Section.  Such notice shall indicate the specific
termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated. 
The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall
not waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing his rights hereunder.


 


8.                                       Arbitration.


 


(a)                                  Except
as provided in Section 8(d) below, any dispute or controversy arising out
of, relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof, shall be
settled by binding arbitration to be held in Palo Alto, California, in
accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association (the “Rules”).  The arbitrator may grant injunctions or other
relief in such dispute or controversy. 
The decision of the arbitrator shall be final, conclusive and binding on
the parties to the arbitration.  Judgment
may be entered on the arbitrator’s decision in any court having jurisdiction.


 


(b)                                 The
arbitrator(s) shall apply California law to the merits of any dispute or claim,
without reference to conflicts of law rules. 
The arbitration proceedings shall be governed by


 


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federal
arbitration law and by the Rules, without reference to state arbitration
law.  Employee hereby consents to the
personal jurisdiction of the state and federal courts located in California for
any action or proceeding arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.


 


(c)                                  Employee
understands that nothing in this Section modifies Employee’s at-will
employment status.  Either Employee or
the Company can terminate the employment relationship at any time, with or
without cause.


 


(d)                                 EMPLOYEE
HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION.  EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY
CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR
THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:


 


(i)                                          ANY
AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.


 


(ii)                                       ANY
AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE
CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;


 


(iii)                                    ANY AND ALL CLAIMS
ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR
EMPLOYMENT DISCRIMINATION.


 


9.                                       Miscellaneous
Provisions.


 


(a)                                  No
Duty to Mitigate.  The Employee shall
not be required to mitigate the amount of any payment contemplated by this
Agreement, nor shall any such payment be reduced by any earnings that the
Employee may receive from any other source.


 


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(b)                                 Waiver.  No provision of this Agreement may be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). 
No waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party shall be considered
a waiver of any other condition or provision or of the same condition or
provision at another time.


 


(c)                                  Integration.  This Agreement and the stock option agreements
representing the Options represent the entire agreement and understanding
between the parties as to the subject matter herein and supersede all prior or
contemporaneous agreements, whether written or oral.


 


(d)                                 Choice
of Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the
internal substantive laws, but not the conflicts of law rules, of the State of
California.


 


(e)                                  Severability.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.


 


(f)                                    Employment
Taxes.  All payments made pursuant to
this Agreement shall be subject to withholding of applicable income and
employment taxes.


 


(g)                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.


 


IN WITNESS WHEREOF, each
of the parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the day and year first above written.


 


	
  COMPANY:

  	
   

  	
  ABGENIX, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ R. Scott Greer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
  /s/ William R. Ringo

  	
   

  
	
   

  	
   

  	
   

  	
  William R. Ringo

  
										



 


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