Exhibit
10.88


 


EMPLOYMENT
AGREEMENT


 


On behalf of Abgenix, Inc., a Delaware corporation,
(the “Company”) and the Company’s Board of Directors (“Board”), we are pleased
to offer you the position of President and Chief Executive Officer reporting to
the Board.  You will work at the Company’s
headquarters in Fremont, California. 
Except as otherwise expressly provided below, this Agreement, by and
between the Company and William R. Ringo, will become effective on your start
date of employment as the Company’s President and Chief Executive Officer, August 30,
2004 (the “Effective Date”), and sets forth the terms and conditions of your
employment with the Company.


 


The terms of your employment are as follows:


 


	
  1.

  	
  Salary:

  	
  Your base salary is $20,834 semi-monthly ($500,000
  annualized) for fiscal year 2004 and is subject to all standard withholding
  of taxes. Fiscal year 2004 ends on December 31, 2004. In subsequent
  years, your base salary will be reviewed by the Compensation Committee of the
  Board (the “Committee”) on an annual basis. The annualized base salary to be
  paid, together with any subsequent adjustments thereto, shall be referred to
  herein as the “Base Salary.”

   

  
	
  2.

  	
  Equity:

  	
  Subject to the approval of the Committee, the
  Company will grant you as of the first date on which you become an employee
  of Abgenix as set forth in paragraph 12 below (“Commencement of Employment”),
  nonstatutory stock options under the Company’s 1999 Nonstatutory Stock Option
  Plan, as amended (the “Plan”) to purchase 500,000 shares of Abgenix
  common stock. The per-share exercise price will be equal to the “Fair Market
  Value” (as defined in the Plan) of a Company common share as of your
  Commencement of Employment. The stock option vesting schedule is as
  follows: Vesting will begin on the Effective Date. At the end of twelve
  months following the Effective Date, 12/48 (25%) will vest and thereafter
  1/48 of the total grant will vest per month (so that if you remain
  continuously in the Company’s employ, at the end of four years your option
  would be fully vested). In the event of termination of your employment with
  the Company for any reason, all vested options must be exercised within
  90 days of your termination date and all unvested options shall be
  canceled and forfeited without consideration. Subject to such stockholder
  approval of additional shares to be used for stock option awards under the
  Plan (or other Company stock option plans) as may be required by law, the
  Committee will review your Company stock position annually for the purposes of
  granting future stock options to you on a basis no less favorable than those
  granted to other senior executives of the Company. Such a review normally
  takes place in January of each year. The terms and conditions of any
  stock option grants shall be governed by a separate agreement you will be
  required to sign as a condition of the grant (a “Stock Option Agreement”). A
  copy of the form of that Agreement is attached for your review.

  



 





















 


	
  3.

  	
  Sign-On Bonus:

  	
  You will receive a sign-on bonus of $280,000. This
  payment is considered compensation and as such is subject to all standard
  withholding taxes. Should you terminate employment other than through an
  Involuntary Termination (as defined below) within 12 months of the
  Effective Date, this payment will be repayable to the Company on a pro-rated
  basis. The amount of such repayment is determined by multiplying $280,000
  times a percentage; where such percentage is equal to: (i) one minus (ii) the
  number of days you were employed by the Company divided by 365.

   

  
	
  4.

  	
  Bonus:

  	
  For fiscal year 2004, you will be eligible to
  participate in the Company’s annual management incentive bonus program. Under
  this program, which is based on the Company attaining certain annual
  corporate goals and you attaining personal objectives approved by the
  Committee, you will be eligible, subject to Committee approval, for an annual
  target bonus of 50% of your fiscal year-end Base Salary which is based upon
  attaining 100% of plan achievement (the “Target Bonus”). Based on the
  Effective Date, your Target Bonus for fiscal 2004 is pro-rated to $83,333.
  Thereafter, you will be eligible for an annual bonus based on the attainment
  of corporate and personal goals established by the Committee with input from
  you. The Committee shall, in its sole and absolute discretion, determine the
  amount of bonus, if any, that is actually paid to you.

   

  
	
  5.

  	
  Review Period:

  	
  Your formal performance review by the Committee will
  take place in January of 2005 and annually thereafter.

   

  
	
  6.

  	
  Benefits:

  	
  The Company provides benefit programs for all
  regular full-time employees including senior executives. The details of these
  programs, as well as enrollment forms and other pertinent literature, will be
  available during your orientation with Human Resources. Enclosed for your
  review is a summary of the plans. Term life insurance up to $500,000 is
  provided to you. Supplemental life insurance for you or your family is
  available according to the plan documents.

   

  
	
  7.

  	
  Relocation:

  	
  The Company will reimburse you for (1) the cost of
  moving your household goods to your new residence in the Bay Area;
  (2) hotel and car rental expenses for up to one month; (3) expenses
  incurred for your final move air travel; up to a maximum of $100,000 for (1)
  through (3) combined. The Company will make arrangements for items (1) and
  (2) directly through the vendor(s) of its choice, and may do so as well for
  item (3). Under no circumstances will substitutions be made for any of the
  above-mentioned covered items.

   

  In connection with these costs, the Company will
  provide you with additional compensation in the form of a one-time “tax gross
  up” in accordance with standard Company policy. This is intended to offset
  the majority of your non-deductible, tax-related costs for the

  



 


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  above-mentioned relocation package.

   

  This relocation expense coverage is intended to
  assist in getting you established in your new residence in the local area as
  quickly as possible. Therefore, it is required that all relocation assistance
  provided for in this Agreement and all expense reimbursements for this
  assistance be completed within one year from the Effective Date. Should you
  terminate your employment within 12 months of the Effective Date other
  than through an Involuntary Termination (as defined below), all relocation
  expenses already reimbursed will be repayable to the Company on a pro-rated
  basis (pursuant to the repayment methodology described in Section 3
  above).

   

  
	
  8.

  	
  Mortgage Differential:

  	
  In addition to the aforementioned relocation
  assistance, the Company is prepared to offer you a mortgage differential
  allowance. From September 2004 through August 2006 the amount of
  this allowance will be $9,000 per month; from September 2006 through August 2009
  the amount of this allowance will be $6,000 per month. This mortgage
  differential allowance will be subject to standard tax withholding and will
  terminate no later than August 31, 2009. These payments will be made on
  a monthly basis. Should your employment with the Company terminate at any
  time and for any reason prior to August 31, 2009, the mortgage
  differential payments will also then immediately terminate.

   

  
	
  9.

  	
  Termination of
  Employment and Severance Payments

  	
  A.           In
  addition to the terms set forth herein, severance of your employment in the
  event of a change of control is subject to the terms of the Change of Control
  Severance Agreement, incorporated here by reference, and attached hereto as
  Appendix A. Appendix A must also be signed by you for this Agreement to
  become Effective.

   

  B.             Your
  employment at the Company shall be “At Will,” which means your employment
  with the Company may be terminated at any time either by you or the Company,
  with or without cause and with or without notice. Upon your termination of
  employment for any reason, you shall be deemed to have resigned from all
  offices and positions with the Company or any of its affiliates and you shall
  execute any documentation requested by the Company to confirm such
  resignation(s). If your employment is terminated by the Company without
  cause, or if your resignation is due to an Involuntary Termination (as
  defined below) you will be paid two years of continuation payments of your
  then Base Salary and Target Bonus, provided you timely execute a full release
  of all claims in a form prescribed by the Company and further provided you
  fully comply with any other terms and conditions established by the Company.

   

  C.             Termination
  Without Cause. For purposes of this Agreement, a “termination without
  cause” by the Company is defined as an

  



 


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  “Involuntary
  Termination” as set forth in paragraph 1(d) of the Change of Control
  Severance Agreement and is incorporated here by reference. This paragraph
  provides as follows: 

   

  1(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 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.

   

  D.            Termination
  With Cause. Termination with “Cause” shall have the same meaning as
  defined in paragraph 1(a) of the Change of Control Agreement and is
  incorporated here by reference.This

  



 


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  paragraph provides as
  follows:

   

  1(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.

   

  E.              If
  you should resign your employment with the Company for any reason other than
  as a result of an Involuntary Termination or should your employment be
  terminated as a result of your death or your disability, you shall only be
  paid for unpaid Base Salary accrued as of your date of termination and you
  shall be entitled to no other payments from the Company, provided, however,
  that in the event of your disability or death, you or your estate shall be
  paid a pro rata share of your Target bonus for that year at the time that
  Target Bonuses are paid to other senior executives of the Company..

   

  
	
  10.

  	
  Proof of Right to Work

  	
  Our offer to hire you is contingent upon your
  submission of satisfactory proof of your identity and your legal
  authorization to work in the United States. If you fail to timely submit this
  proof, federal law prohibits us from hiring you and this Agreement shall be
  null and void.

   

  
	
  11.

  	
  Confidential

  Information

  	
  As a condition of this Agreement and your
  employment, you agree to sign an Employment, Confidential Information and
  Invention Assignment Agreement on or before the Effective Date of this
  Agreement. A copy is attached as Appendix B to this Agreement.

   

  
	
  12.

  	
  Commencement of Employment

  	
  You will commence employment initially on a
  part-time basis, as a Transition Advisor, on July 20, 2004, and shall
  perform transition-related duties in the office of the Company’s chief
  Executive Officer, and shall assist the Chief Executive Officer as
  appropriate and necessary

  



 


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  to facilitate transition. You shall be paid at the
  rate of $20,834 per month for working part-time between July 20 and August 29,
  2004, inclusive. “Part-time” shall be sufficient to qualify you for participation
  in the Plan.

  



 


This Agreement constitutes the full agreement of the
parties as to the terms and subject matter covered.  This Agreement shall be governed by the laws
of the State of California without reference to rules relating to conflicts of
law.  Except as to matters related to
future compensation, no changes may be made to this Agreement except in writing
signed by both parties.


 


ACCEPTED:


 


 


	
  /s/ William R. Ringo 

  	
   

  	
  July 20, 2004

  
	
    William R. Ringo

  	
   

  	
   Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ R. Scott Greer 

  	
   

  	
  July 20, 2004

  
	
    R. Scott Greer, Chairman of the
  Board

    On behalf of the Company

  	
   

  	
   Date

  



 


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