EXHIBIT (C)(3)
MOLECULAR DYNAMICS INC.
August 9, 1998
Xx. Xxx Xxxxxxx
00000 Xxxxxxxx Xxxxxxxx Xx.
Xxxxxxxx, XX 00000
Dear Xxx,
In light of the agreement by Molecular Dynamics, Inc. (the "Company") to
merge with APB Acquisition Corp. in accordance with the terms set forth in the
Agreement and Plan of Merger dated as of the date hereof among the Company,
Amersham Pharmacia Biotech Inc. ("APB") and APB Acquisition Corp. (the "Merger
Agreement"), the following sets forth our understanding concerning your
continued employment. The effectiveness of this letter is conditioned on
consummation of the merger contemplated by the Merger Agreement (the
"Merger"). (References in this letter to the Company shall, after the
effective date of the Merger, be interpreted as references to the Surviving
Corporation (as defined in the Merger Agreement.)
You will retain your position as Chief Executive Officer of the Company
for a period of up to one year from the consummation of the Merger, for the
purpose of managing the Company's integration with APB. The integration of the
two organizations' structures, alignment of the terms and conditions
applicable to their employees, and establishment of an environment in which
the Company can recruit, develop, and retain staff of the highest caliber,
remain priorities to which both the Company and APB are fully committed.
During the period of your continued employment, you agree to carry out your
duties to the Company, including the pursuit of these priorities, in good
faith and to the best of your ability.
During the period of your continued employment, you will receive salary
at an annual rate of $252,000 through December 31, 1998 and at an annual rate
of $265,000 from January 1, 1999 to the Payment Date (as defined below), and
benefits at the level currently applicable to you (excluding stock options and
bonuses (other than your 1998 bonus) or any other incentive awards).
In addition, in partial consideration of: (i) your continued employment
and contribution towards the objectives described above; (ii) the fact that
you will no longer be entitled to awards of options or other incentive
compensation; and (iii) your agreeing to the confidentiality, noncompetition
and nonsolicitation provisions referred to below, the Company will pay you an
additional award of $1,000,000 (the "Transition Incentive Compensation") in a
single lump sum in cash (net of any required withholding) on the first
anniversary of the effective date of the Merger (the "Payment Date"), provided
you have not voluntarily terminated your employment with the Company (or its
successor) prior to the Payment Date. You shall not have been deemed to have
voluntarily terminated your employment with the Company (or its successor) if
you terminate your employment following a constructive termination. A
"constructive termination" shall have occurred in the event that (i) your
position and responsibility shall have been materially altered from that
contemplated by this agreement without your consent, (ii) the terms and
conditions of this agreement are materially breached through no action of
yours; or (iii) the principal place of business of the Company (or its
successor) is relocated more than 50 miles without your consent.
Notwithstanding the foregoing, if your employment is terminated before the
Payment Date by reason of either disability or death, you (or your estate)
will be entitled to receive a pro rata portion of the Transition Incentive
Compensation, reduced to reflect the period between the termination of your
employment and the Payment Date. For this purpose, termination by reason of
"disability" means termination of employment after your inability, as a result
of physical or mental incapacity, to work for a period of at least six months
in any 12-month period.
As of the Payment Date, your employment will be terminated and you will
not be entitled to any further compensation from the Company (except benefits
previously accrued and payable in accordance with the terms of any applicable
employee benefit plan), provided that the Company agrees that repayment of the
note delivered by you to the Company for a principal amount of $330,000 will
not be accelerated by reason of your termination of employment hereunder, and
that such note will remain outstanding with the same repayment and other terms
and conditions as in effect immediately before such termination (it being
understood that such loan will be repaid in full no later than January 28,
2001).
If the Company should determine, in its discretion, that the integration
of organizational structures pursuant to the Merger has been successfully
completed before the Payment Date, the Transition Incentive Compensation may
be paid to you by the Company in advance of the Payment Date. In such case,
your employment will be terminated as of the date of payment of the Transition
Incentive Compensation, but you will continue to receive salary and benefits
until the Payment Date at the levels in effect as of the date of termination
of your employment.
As a condition to entitlement to the compensation and benefits described
in this letter, and in partial consideration for the amounts to be received by
you in accordance with the Merger Agreement, you agree (i) to continue to
adhere to the provisions of the confidentiality and inventions assignment
agreement previously executed by you in connection with your employment with
the Company; and (ii) for a period of one year from the date of termination of
your employment, not to hire or solicit the employment of any person then
employed by the Company, or otherwise induce any such person to leave such
employment.
In addition, for a period of two years from the effective date of the
Merger, you will not compete with the Company, except as may be otherwise
agreed by you and the Company in writing. For the purposes of this agreement,
"compete" shall mean engaging in, or otherwise directly or indirectly being
employed by or acting as a consultant to, or being a director, officer,
employee, principal, licensor, trustee, broker, agent, stockholder, member,
owner joint venturer or partner of, or permitting your name to be used in
connection with the activities of any other business or organization which
engages in, the Business, as defined below. For this purpose, "Business"
means the development, production or marketing of microarrays, DNA sequencing
instruments, or fluorescent scanners. Notwithstanding the foregoing, you will
not be deemed to be competing with the Company if you become the registered or
beneficial owner of up to five percent of any class of capital stock of a
corporation engaged in the Business and registered under the Securities
Exchange Act of 1934, as amended, provided you do not actively participate in
the business of such corporation until such time as this covenant expires. You
acknowledge that due to the uniqueness of your services and the confidential
nature of the information you will possess, the covenants set forth herein are
reasonable and necessary for the protection of the business and goodwill of
the Company.
This new opportunity for our organization represents another significant
milestone in the Company's history. It reflects your loyal and committed
leadership and direction since the Company's formation, for which the Board of
Directors wishes to express its sincere gratitude.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. The terms and conditions set forth in
this letter may only be amended pursuant to a written document between the
Company (or its successor) and you.
If you agree to the terms and conditions set forth in this letter,
kindly so indicate by signing in the space provided below.
Very truly yours,
Molecular Dynamics, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman of the Board
Accepted and agreed to as of
the date first above written.
/s/ Xxx Xxxxxxx
----------------------------
Xxx Xxxxxxx
