Sample Business Contracts

Severance Agreement and Release of Claims - Nanogen Inc. and Senior Vice President, General Counsel and Secretary

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         THIS AGREEMENT (the "Agreement") is entered into effective as of
December 1, 2000, by                       ("         ") and NANOGEN, INC., a
Delaware corporation (the "Company").

         WHEREAS,           and Nanogen, Inc. have had a business relationship
wherein           has been an officer and employee of, and attorney for, the
Company; and

         WHEREAS,           will no longer be employed as an officer, employee
or in-house counsel of the Company effective as of November 1, 2000 (the
"Severance Date"), but will act as a consultant to the Company for an
eight-month period commencing on December 1, 2000; and

         WHEREAS,           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 covenants contained
herein, and in consideration of the amounts to be paid by the Company to
          under this Agreement, which amounts           is not otherwise
entitled to receive,           and the Company agree as follows:

         1.       SEVERANCE PAY.

                  (a)      LUMP SUM PAYMENT. The Company will make a lump sum
payment of $87,500 to           on the date this Agreement is executed.

                  (b)      SEVEN MONTHLY PAYMENTS. Beginning on or about January
2, 2001 and for six (6) months thereafter, the Company will pay           a
monthly consulting fee of $12,500, for a total of $87,500.

                  (c)      OTHER BENEFITS. From and after the Severance Date,
          shall not be eligible to participate in any of the Company's employee
benefit plans (including, without limitation, the 401(k) plan), fringe benefit
programs, group insurance arrangements, stock option agreements, stock vesting
programs or similar programs.

                  (d)      TAX LIABILITY.           shall be responsible for all
tax liability associated with any payments made pursuant to this Section 1.


                  (a)      In order to aid the Company during the transition to
new in-house representation and management,           agrees to consult with the
Company by phone or in


person for a period of eight (8) months after December 1, 2000, at no additional
compensation. In the event travel is required in connection with the provision
of such consulting services, Company shall reimburse           for all
reasonable travel and hotel expenses.           will devote an average of ten
(10) hours per week to the performance of such services at the Company's
request. In making its request for services, the Company will take          's
time commitments outside of this consulting relationship into account. The
Company recognizes and agrees that          's consulting services are not
exclusive and he may perform services for other persons, provided that such
services do not breach the Company's Proprietary Information and Inventions and
Dispute Resolution Agreement, and provided that they do not create professional
conflicts of interest relating to legal representation between or among such
other persons and the Company, and/or           and the Company.

                  (b).     INDEPENDENT CONTRACTOR. In performing services for
the Company pursuant to this consulting arrangement,           shall act in the
capacity of an independent contractor with respect to the Company and not as an
employee of the Company. For purposes of all employee benefit plans maintained
by the Company,           shall continue to be treated as an independent
contractor, and shall not be eligible to participate in any of said plans, even
if he is subsequently determined to be a common law employee by the Internal
Revenue Service or other state or federal agency, or by a court. Service
hereunder as a consultant shall not count as service for purposes of vesting any
options or Company stock after the Severance Date.

         3.       VESTING OF STOCK OPTIONS AND STOCK . As of the Severance Date,
          will have vested in 149,941 shares of the Company's common stock that
was previously granted or awarded to him under the Company's stock option plans
(including performance shares and restricted shares) according to their terms,
and that have been exercised. As of the Severance Date,           also will have
vested in 27,708 shares of the Company's common stock that were previously
granted or awarded to him, but that have not been exercised. All options will
cease to be exercisable according to their terms either within ninety (90) days
or three (3) months of the Severance Date, as applicable. Any options which are
Incentive Stock Options will cease to qualify for favorable tax treatment as an
Incentive Stock Option to the extent that they are exercised more than three (3)
months after the Severance Date, but they will continue to be exercisable as
nonqualified stock options under the terms of the applicable option agreements.
          shall be responsible for all tax liability associated with this
Section 3. Any shares of stock granted pursuant to a stock option plan which
have been paid for by           and which have been exercised, but which are not
vested on the Severance Date (31,925 shares), will be repurchased by the Company
for the per share price           paid for such stock.           agrees that,
while he is acting as a consultant for the Company, he will abide by the Nanogen
Insider Trading Policy and observe trading blackouts imposed by the Company from
time to time in connection with the Company's issuance of press releases. The
automatic "Earning Trading Blackout" period imposed on the Company's directors,
officers and certain finance and legal department employees shall not be
applicable to          .

         4.       COMPANY LOANS. The outstanding balance on the Company loan to


November 7, 1997 in the current (as of the Severance Date) amount of $78,142.68
for the purchase of 72,775 pledged shares of Nanogen common stock (the "Pledged
Shares") shall become due and payable in full on July 31, 2001. Until repayment
of the loan in full, Nanogen will keep approximately 7,814 of the Pledged Shares
as collateral for the loan.

         5.       NONDISCLOSURE. During the term of this Agreement and
thereafter,           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 or proprietary 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 or published information (other than as a result of
unauthorized disclosure by          ) 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.           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 the Company which he may then
possess or have under his control.          's obligations to the Company under
the Proprietary Information, Inventions and Dispute Resolution Agreement shall
remain in full force and effect, notwithstanding the release contained herein.

         6.       RELEASE.           acknowledges that the severance package
described herein is given in exchange for his signing this Agreement, and he is
not otherwise entitled to receive such benefits from the Company.         
agrees that the severance package is in full satisfaction of any claims,
liabilities, demands or causes of action, known or unknown, and he 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 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 Company,
including, but not limited to claims relating 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          's employment or nonemployment by the Company,
to the conclusion 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, including without limitation:

                  (a)      Any and all claims under the federal Age
         Discrimination in Employment Act;

                  (b)      Any and all claims under federal or California
         statutory or decisional law pertaining to wrongful discharge,
         discrimination, or breach of public policy, physical or mental harm or
         distress; and


                  (c)      Any and all claims relating to the tax obligation for
         which           may become liable as a result of this Release or the
         payment of consideration referred to above.

         The Company agrees that this Severance Agreement and Release of Claims
is in full satisfaction of any and all claims, liabilities, demands or causes of
action of any nature, known or unknown, and Company hereby releases and forever
discharges           from any and all claims, liens, demands, causes of action,
obligations, damages and liabilities of any nature whatsoever, known or unknown,
that it ever had, now has or may hereafter claim to have against          ,
including, without limitation, claims relating to or arising from his employment
by, and representation of, the Company and such other claims as are specified in
this Section 6.

         Execution of this Agreement does not bar any claims for breach of this
Agreement. This Agreement recognizes the rights and responsibilities of the
Equal Employment Opportunity Commission ("EEOC") to enforce the statutes which
come under its jurisdiction and is not intended to prevent           from filing
a charge or participating in any investigation or proceeding conducted 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 6, the waiver
provided in Section 7 or the agreement to submit claims to final and binding

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


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

         8.       COVENANT NOT TO SUE. The parties covenant and agree that they
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 or prosecuted, 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 of any action or proceeding contrary to this
Agreement.           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 received pursuant to this


         In the event of any breach of this Section 8, the aggrieved releasee
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 8 and in
prosecuting any claim, counterclaim or cross-claim based hereon.

         9.       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 6 above; that they have the sole right and exclusive authority to
execute this 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 Agreement.

         10.      NO ADMISSION. The parties acknowledge that the payment of
consideration, referred to herein, is made solely for the purpose of purchasing
peace and 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 expressly denied by all releasees.

         11.      CONFIDENTIALITY. The parties 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, except as may be necessary for the
purposes of audit, taxation returns or other disclosures required by law.


                  (a)      NOTICE. 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. certified mail,
return receipt requested and postage prepaid. In the case of          , mailed
notices shall be addressed to him at the home address which 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 Assistant Secretary.

                  (b)      WAIVER. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by           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, 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 with respect to the subject matter hereof.

                  (d)      CHOICE OF LAW. The validity, interpretation,
construction and performance of this Agreement shall 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 breach termination 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 Employment Mediation Rules
of the American Arbitration Association. If mediation is not successful, then
the dispute shall be resolved by a single 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 award rendered by the arbitrator
may be entered by any court having jurisdiction thereof. The Company shall bear
the costs of arbitration if           prevails. If the Company prevails,
          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.

                  (f)      CONSULTATION WITH COUNSEL.           acknowledges
that he has been 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 provision of 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 obligation hereunder 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 the Company and its successors and          ,
his heirs, executors, administrators and legal representatives.

                         [SEE NEXT PAGE FOR SIGNATURES]


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


                              NANOGEN, INC.

                                     /s/Vera P. Pardee
                                       Vera P. Pardee, Esq.
                                       Vice President, Assistant General Counsel
                                       and Secretary