Exhibit 10.1 

	**SEPARATION AGREEMENT
	This Separation Agreement (the "Agreement") is made effective as of September 10, 2008, by and betweenRichard A. Miller, M.D. ("Executive") and Pharmacyclics, Inc. (the "Company").

RECITALS

A.	Executive has resigned as the President and Chief Executive Officer of the Company effective September 10, 2008, and Executivehas tendered his resignation of employment to the Company, which shall be effective upon the Termination Date (as defined below).

B.	Executive and the Company wish to enter into this Agreement to set forth the terms and conditions related to Executive'stermination of employment with the Company.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows:
Termination Date
.  Executive acknowledges that his employment with the Company will end due to his voluntary resignationeffective September 30, 2008 (the "
Termination Date
").  On the Termination Date, the Company shall pay Executive allaccrued but unpaid salary, and all accrued and unused vacation earned through the Termination Date, subject to any applicable withholdingrequired under federal, state or local law.  Executive is entitled to these amounts regardless of whether Executive revokes this Agreement (asdescribed in Section 6(e) below).  

Separation Payments and Benefits
.  The Company hereby agrees, subject to the execution hereof by both parties andExecutive's continued service with the Company through the Termination Date, to provide Executive the severance benefits set forth below,provided that Executive does not revoke the Agreement as described in Section 6(e) below.  

		(a)	Severance Payments.  The Company shall provide Executive with severance payments which in aggregateequal Executive's annual base salary of $438,973.00, which payments shall be made as follows:  (i) a lump sum payment of $36,581.08 on theCompany's first regular payroll date occurring in each of October 2008, November 2008 and December 2008, and (ii) a lump sum payment of$329,229.76 on January 2, 2009.    

		(b)	Stock Options.  As of the Termination Date, Executive shall become fully vested with respect to any previouslyunvested portion of any outstanding option to purchase shares of the Company's common stock which was previously granted to Executive(each, a "Stock Option").  In addition, as of the Termination Date, each Stock Option shall remain exercisable until theearlier of (i) the date occurring three years after the Termination Date, or (ii) the date on which the right to exercise the Stock Option wouldhave expired had Executive continued to be employed by the Company for the full term of such Stock Option.

                                                    1
		(c)	Healthcare.  In the event that Executive elects, following the Termination Date, to receive continued coverageunder the Company's medical and dental benefit plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended("COBRA") for himself and/or his eligible dependents, the Company shall pay the monthly COBRA premium for Executivefor the twelve (12) month period following the Termination Date.   
		(d)	Taxes.  Executive understands and agrees that all payments under this Agreement will be subject to anyapplicable withholding required under federal, state or local law.  
Transition Services
.  Executive agrees that upon reasonable request of the Company, during the period commencing on theTermination Date and ending on December 31, 2008, Executive shall cooperate with the Company in accomplishing a smooth and orderlytransition of Executive's former job responsibilities to other employees of the Company.  In this regard, Executive agrees to respond in a timelyfashion to the questions which may reasonably be presented by the Company.  Such cooperation and responses shall not entitle Employee toany additional compensation beyond the severance payments and benefits described above.  In addition, any transition services requested bythe Company pursuant to this Section 3 shall not unreasonably interfere with Executive's other gainful employment or efforts to secure gainfulemployment during such period and in no event shall the level of bona-fide services required by this Section 3 exceed 20% of the averagelevel of bona-fide services performed by Executive during the 36-month period preceding the Termination Date.    

Full Payment
.  Executive acknowledges that the payment and arrangements herein shall constitute full and complete satisfactionof any and all amounts properly due and owing to Executive as a result of his employment with the Company and the termination thereof.

General Release
.  In exchange for the severance payments and benefits  provided for in Section 2, Executive releases andforever discharges the Company and each of its subsidiaries, affiliates, officers, directors, employees, and agents and all of their predecessorsand successors ("
Releasees
") from any and all claims that legally can be released that Executive may have against theReleasees, whether known or unknown, arising out of Executive's employment with the Company or the termination of that employment.  Thiswaiver and release of claims is full and complete, and includes, without limitation, any claim of constructive discharge, harassment, or wrongfultermination, any claims under Title VII of the 1964 Civil Rights Act, the Americans With Disabilities Act, the Age Discrimination in EmploymentAct, the Family and Medical Leave Act, the California Fair Employment and Housing Act, the California Family Rights Act, the EmployeeRetirement Income Security Act, the state and federal Worker Adjustment Retraining and Notification Acts, or any other applicable federal,state, or local law, rule, regulation or order, claims for breach of contract or covenant, whether express or implied, negligent or intentionalinfliction of emotional distress, misrepresentation, fraud, breach of statute or public policy, defamation, or any claims alleging tort or otherwrongful conduct under common law, as well as any claim for additional compensation in any form, including salary, bonus or incentivecompensation, sick leave benefits, vacation benefits, compensatory time, severance pay,  or otherwise and all other
                                                    2
claims of any kind arisingout of my employment, including claims for attorney's fees and costs.  The matters that are the subject of the release referred to in this Sectionshall be referred to collectively as the "Released Matters".  
Notwithstanding the foregoing, Executive does not release the following claims and rights:  (a) Executive'srights under this Agreement; (b) any claims for unemployment compensation or any state disability insurance benefits pursuant to the terms ofapplicable state law; (c) Executive's right, if any, to indemnity pursuant to theCalifornia Labor Code; or (d) any other claims determined by law to be non-waivable.  

Acknowledgements Related to ADEA
.  Executive understands and acknowledges that:
- This Agreement constitutes a voluntary waiver of any and all rights and claims he has against the Company as of the date of the executionof this Agreement, including rights or claims arising under the federal Age Discrimination in Employment Act, 29 U.S.C. 621,  et  seq .
- He has waived rights or claims pursuant to this Agreement and in exchange for consideration, the value of which exceeds payment orremuneration to which Executive was already entitled.
- He is hereby advised that he may consult with an attorney of his choosing concerning this Agreement prior to executing it.
- He has been afforded a period of at least twenty one (21) days to consider the terms of this Agreement, and in the event he should decideto execute this Agreement in fewer than twenty one (21) days, he has done so with the express understanding that he has been given anddeclined the opportunity to consider this Agreement for a full twenty one (21) days, and waives the balance of the twenty-one (21) dayperiod.
- He may revoke this Agreement at any time during the seven (7) days following the date of execution of this Agreement by providingwritten notice to an authorized representative of the Company, and this Agreement shall not become effective or enforceable until suchrevocation period has expired.  Executive understands that if he revokes this Agreement, he shall not be entitled to any of the benefitsprovided by this Section 2 of this Agreement.

California Section 1542 Waiver
.  Executive acknowledges that he has read the provisions of California Civil Code Section 1542,which provides as follows:
**A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time ofexecuting the release, which if known to him or her must have materially affected his or her settlement with the debtor.**
                                                    3
and that he expressly waives, relinquishes and forfeits all rights and benefits accorded by the provisions of California Civil CodeSection 1542 with respect to the Released Matters.
Executive Representations
.  Executive warrants and represents that (a) he has not initiated any adversarial proceedings of anykind against the Company or any other Releasee, (b) he has been paid all compensation, wages, bonuses, commissions, and/or benefits towhich he may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to him, except as described inthis Agreement, (c) he has no known workplace injuries or occupational diseases and has been provided and/or has not been denied anyleave requested under the Family and Medical Leave Act or the California Family Rights Act, and (d) on or before the Termination Date,Executive will return to the Company all Company property in his possession.  

No Assignment
.  Executive warrants and represents that no portion of any of the Released Matters, and no portion of anyrecovery or settlement to which Executive might be entitled, has been assigned or transferred to any other person, firm or corporation not aparty to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suitshould be made or instituted against the Company or any affiliate of the Company because of any such purported assignment, subrogation ortransfer, Executive agrees to indemnify and hold harmless the Company or any affiliate of the Company against such claim, action, suit ordemand, including necessary expenses of investigation, attorneys' fees and costs.

Miscellaneous
.  This Agreement is the entire agreement between the parties with regard to the subject matter hereof.The Company and Executive acknowledge that the termination of the Executive's employment with the Company is intended to constitute aseparation from service for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the related treasury regulationspromulgated thereunder.  Executive acknowledges that there are no other agreements, written, oral or implied, and that he may not rely on anyprior negotiations, discussions, representations or agreements.  This Agreement may be modified only in writing, and such writing must besigned by both parties and recited that it is intended to modify this Agreement.  This Agreement will bind the heirs, personal representatives,successors and assigns of both Executive and the Company, and inure to the benefit of both Executive and the Company and their heirs,successors and assigns.  If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determinationwill not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be renderedenforceable insofar as possible under applicable law.  This Agreement will be deemed to have been entered into and will be construed andenforced in accordance with the laws of the State of California without regard to conflicts of law principles.  This Agreement may be executedin separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

		

(Signature page follows)

                                                    4

	IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date indicated next totheir respective signatures below.

 
  
EXECUTIVE
Date: September 12, 2008 
/s/ Richard A. Miller**