**Exhibit 10.30**

 

**CONFIDENTIAL**

 

**SEPARATION AGREEMENT AND RELEASE OF CLAIMS**

 

THIS SEPARATION AND RELEASE AGREEMENT (the “Agreement”), dated May 21, 2003 is entered into by GERARD A. WILLS (“Executive”) andNANOGEN, INC., a Delaware corporation (the “Company”). 

 

WHEREAS, Executive and the Company have had a business relationship wherein Executive has been an officer, and employee of the Company; and 

 

WHEREAS, Executive and the Company wish to end their relationship with all actual and potential disputes between them completely and amicably resolved:

 

NOW, THEREFORE, in consideration of the mutual covenantscontained herein, and in consideration of the amounts to be paid by the Company to Executive under this Agreement, amounts which Executive is not otherwise entitled to receive, Executive and the Company hereby agree as follows: 

 

1. Resignation from Company. Until August 1, 2003 Executive shallcontinue to be an employee of the Company and be entitled the all of the benefits and obligations connected therewith. Executive shall resign as an officer of the Company effective June 5, 2003 (“Effective Date”) and shall no longer beemployed as an employee of the Company effective August 1, 2003 (“Severance Date”). Executive agrees that at all times he is employed with the Company, he will fully and faithfully discharge the duties and responsibilities of his positionwith the Company, as requested by the Company’s Executive Vice President, David Ludvigson, provided, however, that from and after June 5, 2003, Executive shall only be asked to answer reasonable inquiries from David Ludvigson, Executive VicePresident as available via telephone. 

 

2. SeveranceCompensation. 

 

        (a) Cash Payments. The Company will continue to pay Executive a salary of $19,500 per month through the Severance Date. Such payments shall be made according to the customary andregular payroll policies then in effect for the Company. On the Effective Date, the Company shall pre-pay Executive all accrued vacation pay due through the Severance Date amounting to $12,537.27 and on July 31, 2003, the Company shall make a lumpsum payment of $120,900 to Executive (in addition to the normal paycheck paid on July 31, 2003) via automatic deposit, all such payments shall be less standard tax withholdings and any other required deductions. 

 

        (b) Stock Grant. TheCompany shall grant Executive 20,000 shares of stock pursuant to the Company’s 1997 Stock Incentive Plan, as amended. Executive shall be required to pay the par value for such shares prior to their issuance. Executive shall be restricted fromselling any shares granted pursuant to this paragraph (b) for a period of ninety (90) days from the Effective Date. 

 

-1- 

**CONFIDENTIAL**

 

        (c) Extend Exercise Date for Certain Stock Options. On the EffectiveDate, all of the incentive stock options, nonqualified stock options and restricted stock received by Executive pursuant to either the Company’s 1997 Stock Incentive Plan, as amended, or the 1993 Stock Option/Stock Issuance Plan, as amended,shall immediately vest in their entirety. Notwithstanding the foregoing, Executive’s incentive stock options and nonqualified stock options for an aggregate of 100,000 options of the Company’s Common Stock with an exercise price of $6.96shall be exercisable for only up until three months after the Severance Date and thereafter shall not be exercisable. Such options shall be subject to the U.S. tax laws and depending on such laws and the number of shares that are exercisable byExecutive in any given year, incentive stock options may lose their favorable tax treatment and become nonqualified stock options. Executive’s incentive stock options and nonqualified stock options for an aggregate 60,000 shares of theCompany’s Common Stock with exercise prices at either $1.901 or $5.11 shall remain exercisable for a period of five (5) years from the Severance Date, subject to the restrictions described below in Section 5. Any incentive stock options held byExecutive with an exercise price below the closing price of the Company’s Common Stock on the Severance Date shall become nonqualified stock options on the Severance Date and any incentive stock options with an exercise price above the closingprice of the Company’s Common Stock on the Severance Date shall remain incentive stock options for up to three (3) months after the Severance Date and thereafter shall become nonqualified stock options. Executive acknowledges and agrees that hemust consult with his own tax advisor or attorney regarding the appropriate tax treatment for all of his incentive stock options, nonqualified stock options and restricted stock options and that he is not depending on any employee of the Company toprovide such advice. The Company agrees that in the event of a reorganization, merger, acquisition or similar transaction, that the Executive’s stock options shall remain as options in the new entity (subject to dilution) and Executive shallnot be required to exercise such options in order to participate in such reorganization (it being the intent of the parties that such options shall remain as options in the new entity); provided, however that this sentence shall not apply to anysuch transaction that is ordered by a Federal or state Court or any such transaction which would be prohibited by law or regulation if such options were offered in the new entity. 

 

        (d) Equipment. Executive shall retain his laptop computer, dockingstation, monitor, keyboard, mouse, external CD writer and cellular telephone. Executive shall change the cellular service so that the billing will be in his own name effective June 5, 2003. 

 

3. Other Benefits. For a period which ends on the earlier of: (a) yourobtaining new employment after the date of this Agreement or (b) six months following the Severance Date, the Company shall pay the Executive’s COBRA costs for such benefit plans as may be offered during that time. Currently those plans areBlue Cross PPO or HMO, Guardian Dental, VSP Vision Plan and an EAP program. Other than as provided for in this Section 3, following the Severance Date, Executive shall not be eligible to participate in any of the Company’s employee benefitplans (including, without limitation, the 401(k) plan), fringe benefit programs, and group insurance arrangements, except under COBRA, the stock option agreements and stock vesting programs described in Section 2 (c) for the periods describedtherein. 

 

-2- 

**CONFIDENTIAL**

 

4. Tax Liability. Executive shall be responsible for all tax liability associated with any payments made pursuant toSection 2 or Section 3, except as described herein. 

 

5.Non-Competition. As consideration for the severance compensation described in Section 2 and in order to protect the Company’s trade secret and other “confidential information” of the Company as described below in Section 7,during a period of nine (9) months from the Severance Date, Executive shall not, other than with the prior written consent of the Board of Directors of the Company, engage, directly or indirectly, in any other business activity (whether or notpursued for pecuniary advantage) with a company currently commercializing microarray technology for use in clinical molecular diagnostics, provided that Executive may own less than two percent of the outstanding securities of any such publiclytraded competing corporation. Any violation by Executive of this Section 5 shall result in the immediate cancellation of the extended exercise period for all options described in Section 2 and the Company may thereafter take whatever other legalsteps it deems necessary to enforce this provision and protect the Company’s confidential information. 

 

6. Nonsolicitation. During a period of two (2) years after the Severance Date, Executive will not directly or indirectly engage, encourage orparticipate in the solicitations of any employee or consultant of the Company to leave the Company for any reason or to devote less than all of any such employee’s efforts to the affairs of the Company. 

 

7. Nondisclosure. During the term of this Agreement and thereafter,Executive shall not, without the prior written consent of management, disclose or use for any purpose (except in the course of his service under this Agreement and in furtherance of the business of the Company) confidential information orproprietary data of the Company, except as required by applicable law or legal process; provided, however, that “confidential information” shall not include any information known generally to the public or ascertainable from public orpublished information (other than as a result of unauthorized disclosure by Executive) or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that conducted by the Company.Executive agrees to deliver to the Company at the termination of his service, or at any other time that the Company may request, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of theCompany which he may then possess or have under his control. Executive’s obligations to the Company under the Proprietary Information, Inventions and Dispute Resolution Agreement, dated April 26, 2001 by and between the Company and Executive(the “Proprietary Inventions Agreement”) shall remain in full force and effect, notwithstanding the release contained herein, except that Section 2(f) of the Proprietary Inventions Agreement shall be replaced by Section 6 herein.

 

8. Release. Executive acknowledges that the severancepackage described herein is given in exchange for his signing this Agreement, and he is not otherwise entitled to receive such benefits from the Company. Executive agrees that the severance package is in full satisfaction of any claims, liabilities,demands or causes of action, known or unknown and he 

 

-3- 

**CONFIDENTIAL**

 

hereby releases and forever discharges the Company and each of its past and present directors, managers, officers, shareholders, agents,consultants, advisers, employees, attorneys, servants, parents, subsidiaries, employee benefit plans, predecessors, successors and assigns, and each of them separately and collectively (the “Releasees”) from any and all claims, liens,demands, causes of action, obligations, damages and liabilities of any nature whatsoever, known or unknown, that he ever had, now has or may hereafter claim to have against the Releasees. The release includes, but is not limited to: 

 

        (a) any and all claimsrelating to mental, physical or emotional injuries sustained from invasion of privacy, to defamation, to interference with prospective economic advantage, to intentional or negligent infliction of emotional distress, to Executive’s employmentor nonemployment by the Company, to the termination of his employment, to any status, term or condition in such employment, or to any physical or mental harm or distress from such employment or from termination of such employment;: 

 

        (b) any and all claims underCalifornia statutory or decisional law pertaining to wrongful discharge, discrimination, retaliation or breach of contract or breach of public policy; 

 

        (c) any and all claims under the Fair Employment and Housing Act, Title VII of the Civil Rights Act of1964 or the Americans with Disabilities Act; 

 

        (d) any and all claims for costs, expenses or attorneys’ fees; 

 

        (e) any claims to rehire rights; provided, however, that claims for vested benefits and claims forworkers’ compensation and unemployment insurance benefits are not waived; and 

 

        (f) any and all claims relating to the tax obligation for which Executive may become liable as a result of this release or the payment of consideration referred toabove. 

 

Execution of this Agreement does not bar any claims forbreach of this Agreement. The Company releases Executive from any claims it may have against Executive prior to the date of this Agreement, including (but not limited to) such claims as are specified in this Section 8. This Agreement recognizes therights and responsibilities of the Equal Employment Opportunity Commission (“EEOC”) to enforce the statutes which come under its jurisdiction and is not intended to prevent Executive from participating in any investigation or proceedingconducted by the EEOC; provided, however, that nothing in this section limits or affects the finality or the scope of the release provided in this Section 8, the waiver provided in Section 9 or the agreement to submit claims to final and bindingarbitration. 

 

        (g) Opportunity to Revoke. Executive acknowledges that he is aware that he has twenty-one (21) calendar days to decide whether to enter into this agreement and release of claims, andreturn this executed agreement to the Company. Executive agrees that he was offered twenty-one (21) calendar days to consider this agreement and release. This period is 

 

-4- 

**CONFIDENTIAL**

 

designed to allow Executive to consult with a financial advisor, accountant, attorney or anyone else whose advice Executive needs. Executiveshould consult appropriate advisors, including an attorney, during this period. 

 

Executive further acknowledges that he is aware that he may revoke this agreement and release of claims within seven (7) business days after it is signed and received by the Company. He further agrees that he is awarethat in the event he timely exercises his right of rescission he will have no rights to the severance payment or other rights under this Agreement offered by the Company. . 

 

9. Waiver. The parties expressly waive all rights under Section 1542 of the Civil Code of California which provides:

 

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

 

The parties agree that the possibility that such unknown claims exist was taken into account in determining the amount ofconsideration to be paid for the giving of this Agreement. 

 

10.Covenant Not To Sue. Executive covenants and agrees that he will never, individually or with any person or in any way, commence or aid in any way, except as required by due legal process, prosecute or cause or permit to be commenced orprosecuted, any action or other proceeding based upon any claim which is the subject of this Agreement. This Agreement shall be deemed breached and a cause of action shall be deemed to have accrued immediately upon the commencement or prosecution ofany action or proceeding contrary to this Agreement. Executive agrees that if he brings an action to challenge the enforceability of this Agreement, he will tender to a neutral escrow, as designated by the Company, all consideration that he receivedpursuant to this Agreement. 

 

In the event of any breach of thisSection 10, the Company shall be entitled to recover not only the amount of judgment which may be awarded against such releasee, but also all such other damages, costs and expenses as may be incurred by such releasee, including court costs,attorneys’ fees and all costs and expenses, taxable or otherwise, in preparing the defense of or defending against, or seeking or obtaining an abatement of or injunction against, any action or proceeding brought in violation of this Section 10and in prosecuting any claim, counterclaim or cross-claim based hereon. 

 

11. No Assignment; Authority. The parties represent and warrant that no other person had or has or claims any interest in the claims referred to in Section 8 above; that they have the sole right and exclusive authority to executethis Agreement; that they have the sole right to receive the consideration paid therefor; and that they have not sold, assigned, transferred, conveyed or otherwise disposed of any claim or demand relating to any matter covered by this 

 

-5- 

**CONFIDENTIAL**

 

Agreement. 

 

12. No Admission. The parties acknowledge that the payment of consideration, referred to herein, is made solely for the purpose of purchasing peaceand eliminating possible involvement in protracted litigation based upon disputed claims that the other could make and does not constitute an admission or concession of any liability on account of any of said claims, liability for which is expresslydenied by all releasees. 

 

13. Confidentiality. Theparties covenant and agree to maintain the confidentiality of the existence and terms of this Agreement, including (without limitation) the nature and payment of consideration referred to in this Agreement and to make no voluntary statement, exceptas may be necessary for the purposes of audit, taxation returns or other disclosures required by law. 

 

14. Miscellaneous Provisions.

 

        (a) Notice. Notices and all other communications contemplated by this Agreement shall be in writingand shall be deemed to have been duly given when personally delivered or when mailed by U.S. certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices shall be addressed to him at the home address whichhe 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 Assistant Secretary. 

 

        (b) Waiver. Noprovision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company. 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) Whole Agreement.No agreements (including any employment agreement), representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party withrespect to the subject matter hereof, except that the Proprietary Inventions Agreement shall remain in full force and effect. 

 

        (d) Choice of Law. The validity, interpretation, construction and performance of this Agreementshall be governed by the laws of the State of California (other than choice-of-law provisions). 

 

        (e) Arbitration. Any dispute arising out of or relating to this Agreement, or the breachtermination or validity thereof (including the determination of the interpretation or scope of this agreement to arbitrate), shall be resolved first by mediation pursuant to the 

 

-6- 

**CONFIDENTIAL**

 

Employment Mediation Rules of the American Arbitration Association. If mediation is not successful, then the dispute shall be resolved by asingle neutral arbitrator in binding arbitration administered by the American Arbitration Association under its Rules for the Resolution of Employment Disputes. The arbitration shall take place in San Diego, California, and judgment upon the awardrendered by the arbitrator may be entered by any court having jurisdiction thereof. The Company shall bear the costs of arbitration if Executive prevails. If the Company prevails, Executive shall pay half the cost of the arbitration or $500.00,whichever is less. Each party shall pay its own attorneys’ fees, unless the arbitrator orders otherwise, pursuant to applicable law, except as provided in Section 10. 

 

        (f) Consultation with Counsel. Executive acknowledges that he hasbeen advised and had the opportunity to consult legal counsel prior to signing this Agreement and that he is entering into this Agreement knowingly and voluntarily. 

 

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

 

        (h) Assignment and Successors. Neither party shall assign any right or delegate any obligationhereunder without the other party’s written consent, and any purported assignment or delegation by a party hereto without the other party’s written consent shall be void. This Agreement shall be binding upon and inure to the benefit of theCompany and its successors and Executive, his heirs, executors, administrators and legal representatives. 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer. 

 

By:
 
/s/    GERARD A.WILLS            
  **Gerard A. Wills**
**NANOGEN, INC.**

By:
 
/s/    HOWARD C. BIRNDORF            
  **Howard C. Birndorf**  **Chief Executive Officer**
 

-7-