Exhibit 10.34
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into as of the 21
st day of May, 2006 (the “Effective Date”),
by and between Accelrys, Inc. , a Delaware corporation
(hereinafter, the “Company”), and Mark Emkjer ,
an individual (hereinafter, “Executive”).
RECITALS
WHEREAS, Executive has been employed by Company since
2002, pursuant and in accordance with the terms of an employment
agreement, dated December 3, 2002 (“2002
Agreement”).
WHEREAS, the Company and Executive desire to continue the
employment relationship on the terms set forth herein.
NOW, THEREFORE,
in consideration of their mutual
promises and intending to be legally bound, the parties agree as
follows:
1.
EMPLOYMENT .
(a) Title and Location
. The
Company shall continue to employ Executive as its President and
Chief Executive Officer upon the terms and conditions set forth in
this Agreement, and Executive hereby accepts such employment.
Executive will be based in San Diego, California.
(b) Duties and
Responsibilities . Executive’s duties,
powers and responsibilities in such capacity shall be those which
are customary for such position, as may be determined from time to
time and assigned by the Company’s Board of Directors.
Executive agrees to perform and discharge such duties well and
faithfully and to be subject to the supervision and direction of
Executive’s supervisor.
(c) No Conflicts
. Executive’s position
under this Agreement is a full-time position. Executive agrees to
devote Executive’s full business time, effort, attention and
energies to this position. Executive will not render any
professional services or engage in any activity that might be
competitive with, adverse to the best interest of, or create the
appearance of a conflict of interest with, the Company. Executive
agrees to abide by the policies, rules and regulations of the
Company as they may be amended from time to time.
(d) No Other Agreement
. Executive represents and
warrants the Executive is not bound by any employment, consulting,
noncompetition, confidentiality, finders, marketing or other
agreement or arrangement that would, or might reasonably be
expected to, prohibit or restrict Executive in any manner from
performing Executive’s duties and obligations
hereunder.
2. TERM .
The term of this
Agreement shall commence on the Effective Date and shall continue
thereafter until the effective date of termination set forth in
Section 13, below (“Term”).
3. COMPENSATION
. As
compensation for Executive’s services under this
Agreement:
(a) Base Salary
. The
Company will pay Executive a base salary of four hundred thousand
dollars ($400,000) per year (“Base Salary”), to be paid
semi-monthly in equal installments, less normally applicable
payroll deductions. Executive’s Base Salary will be subject
to annual review and adjustment by the Board or a duly appointed
committee thereof, in either case in its sole
discretion.
(b) Incentive Bonus
. Executive shall be eligible
to participate in the Company’s management incentive plan, as
may be implemented and modified by the Company at its sole
discretion. The Company and Executive agree that Executive’s
initial bonus target percentage will be eighty-five percent (85%)
of Executive’s Base Salary. Such amounts, payable to
Executive under this plan or any other bonus program, shall be
referred to herein as the “Incentive Bonus.” The
Incentive Bonus for any year will be paid after the conclusion of
the applicable fiscal year, based upon the Board of
Directors’ determination as to the amount of such bonus
earned pursuant to the terms of the management incentive plan,
provided Executive is employed by the Company or its successor on
that date.
(c) Vacation and Other
Benefits. Executive shall be entitled
to the benefit of paid vacation, holidays, group medical, accident
and long-term disability insurance and other fringe benefits and
tax qualified retirement plans as the Company shall make available
from time to time to its other similarly situated senior
executives. The Company may change or amend its benefits as it
deems appropriate from time to time.
4. TERMINATION AND
EFFECT OF TERMINATION . Executive’s employment
hereunder is AT WILL
and may be
terminated at any time by the Company for any reason. In the event
of termination of Executive’s employment, the Company shall
have no liability to Executive for compensation or benefits, except
as specified in this Section 4 or as required by the
Company’s benefits policy.
(a) Termination by the
Company for Cause . Executive’s employment
may be terminated by the Company for Cause at any time upon
delivery of written notice to Executive. Upon such a termination,
the Company shall have no obligation to Executive other than the
payment of all accrued, but unpaid, Base Salary and any unpaid
expenses or expense reimbursements prior to the effective date of
such termination. For purposes of this Agreement,
“Cause” means the occurrence of any one or more of the
following events or conditions:
(i) any
material failure on the part of Executive (other than by reason of
disability as provided in Section 4(e) below) to faithfully and
professionally carry out Executive’s duties or to comply with
any other material provision of this Agreement, which failure
continues for ten (10) days after written notice detailing such
failure is delivered by the Company; provided, that the Company
shall not be required to provide such notice in the event that such
failure (A) is not susceptible to remedy or (B) relates to the
same type of acts or omissions as to which notice has been given on
a prior occasion;
(ii)
Executive’s dishonesty (which shall include without
limitation any misuse or misappropriation of the Company’s
assets), or other willful misconduct, if such dishonesty or other
willful misconduct is intended to or likely to materially injure
the business of the Company;
(iii)
Executive’s conviction of any felony or of any other crime
involving moral turpitude, whether or not relating to
Executive’s employment;
(iv)
Executive’s insobriety or use of drugs, chemicals or
controlled substances either (A) in the course of performing
Executive’s duties and responsibilities under this Agreement,
or (B) otherwise affecting the ability of Executive to perform the
same;
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(v)
Executive’s failure to comply with a lawful written direction
of the Company or the Board of Directors; or
(vi) Any
wanton or willful dereliction of duties by Executive.
The existence of
any of the foregoing events or conditions shall be determined by
the Company in the exercise of its reasonable judgment.
(b) Involuntary Termination
by the Company without Cause or Resignation by Executive with Good
Reason . The Company may involuntarily
terminate Executive’s employment under this Agreement at any
time during the Term without Cause upon delivery of written notice
to Executive, and Executive may resign at any time during the Term
with Good Reason (as defined in Section 4(c), below). Except as
provided by Section 4(g) hereof concerning termination in
connection with a Change of Control (as defined in such Section
4(g)), if, during the Term, Executive’s employment is
terminated involuntarily by the Company without Cause pursuant to
this Section 4(b) or Executive resigns for Good Reason pursuant to
Section 4(c) during the Term, the Company shall:
(i) pay Executive all
compensation and benefits accrued, but unpaid, up to the effective
date of termination; and
(ii) provided that, and for so
long as, Executive complies with Executive’s obligations set
forth in Section 7, below, continue to pay Executive each month (in
accordance with the Company’s regular payroll practices) an
amount equal to one twelfth (1/12) Executive’s annual Base
Salary in effect as of the effective date of termination, for a
period of twenty four (24) months after the effective date of
termination;
(iii) pay Executive a pro-rata lump
sum amount, prorated for the number of full months during the
applicable fiscal year during which Executive had been employed by
the Company prior to his termination, of the bonus that would have
been payable to Executive had he remained employed throughout the
year. Such bonus will be based upon the percentage achievement
against objectives as determined by the Company’s board of
directors at the conclusion of the applicable fiscal year to have
been earned pursuant to the terms of the Company’s management
incentive plan; and
(iv) provided that, and for so long
as, Executive complies with his obligations set forth in Section 7,
below, pay Executive, each month for a period of twenty four (24)
months, in accordance with the Company’s regular payroll
practices, one twelfth (1/12) of an amount obtained by multiplying
Executive’s target bonus percentage in effect as of the
effective date of termination (expressed as a decimal) times
Executive’s annual Base Salary in effect as of such date of
termination;
(v)
Reimburse or otherwise pay Executive’s Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA) payments for medical and
dental insurance under the Company’s applicable plans for the
lesser of (x) twenty four months from the effective date of
termination or (y) the date upon which Executive becomes eligible
for medical coverage from a new employer. Executive shall notify
the Company no later than 15 days after becoming eligible for such
coverage.
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(c) Termination by
Executive for Good Reason . Executive may terminate his employment under
this Agreement during the Term for Good Reason upon the provision
of advance written notice to the Company specifying in reasonable
detail the events or conditions upon which Executive is basing such
termination. The Company will be given the opportunity, but shall
have no obligation, to “cure” such events or conditions
within thirty (30) days after the provision by Executive of such
notice. Subject to the provisions of Section 4(g) hereof
(concerning termination in connection with a Change of Control), if
the Company elects in a written notice to Executive not to cure
such events or conditions or otherwise fails to so cure such events
or conditions within such thirty (30) day period, Executive may
terminate Executive’s employment with the Company for Good
Reason effective at the end of such 30 day notice
period.
For purposes of
this Agreement, “Good Reason” means any one or more of
the following events or conditions:
(i) the Company’s breach
of any of the material terms of this Agreement;
(ii) the Company’s
relocating its office at which Executive is principally employed on
the Effective Date of this Agreement, to a location which is more
than fifty (50) miles from both Executive’s residence and the
offices of the Company at which Executive is principally employed
on the date of execution of this Agreement, and requiring Executive
to commute to such location without Executive’s written
consent;
(iii) a material diminution in
Executive’s title, duties or responsibilities or conditions
of his employment from those in effect on the date of execution of
this Agreement; or
(iv) a
reduction of more than 10% in Executive’s annual Base Salary
then-in-effect without Executive’s consent (other than such a
reduction applicable generally to other senior executives of the
Company)
Solely for purposes of Section 4(g) below,
“Good Reason” also means a reduction in the
Executive’s target bonus
(d) Termination by
Executive without Good Reason (Voluntary Resignation) .
Executive may
voluntarily resign his position and terminate his employment under
this Agreement without Good Reason at any time. Upon such a
termination, the Company shall have no obligation to pay
compensation and provide benefits to Executive other than the
payment of all accrued, but unpaid, Base Salary and any other
unpaid expenses or expense reimbursements prior to the effective
date of such termination.
(e) Disability .
If Executive
becomes disabled for more than one hundred eighty (180) days in any
twelve (12) month period, the Company shall have the right to
terminate Executive’s employment upon written notice to
Executive. Executive shall be deemed disabled for purposes of this
Agreement either (i) if Executive is deemed disabled for purposes
of any long-term disability insurance policy paid for by the
Company and at the time in effect, or (ii) if in the exercise of
the Company’s reasonable judgment, due to accident, mental or
physical illness, Executive cannot perform Executive’s
duties. In the event that during the Term, the Company shall
terminate Executive due to disability, as described above,
Executive shall be entitled to receive the benefits set forth in
Section 4(b) (i.e., as if Executive were terminated by the Company
without Cause).
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(f) Death .
In the event of
the death of Executive, this Agreement shall automatically
terminate and any obligation to continue to pay compensation and
benefits shall cease as of the date of death, except for the
payment of all accrued, but unpaid, Base Salary and any other
unpaid expenses or expense reimbursement prior to the date of
death.
(g) Change of Control
Termination Without Cause or Resignation for Good Reason
.
(i) Benefits . Subject
to Section 4(i) below, in the event
Executive’s employment under this Agreement is terminated by
the Company involuntarily without Cause at any time during the
period commencing two (2) months before and ending eighteen (18)
months after the occurrence of a Change of Control during the Term,
or Executive terminates employment with the Company for Good Reason
at any time during the period commencing two (2) months before and
ending eighteen (18) months after the occurrence of a Change of
Control during the Term, the Company shall, in lieu of providing
Executive with any amounts or benefits otherwise payable under this
Agreement:
(A) pay Executive all
compensation and benefits accrued, but unpaid, up to the effective
date of termination; and
(B) provided that, and for so
long as, Executive complies with his obligations set forth in
Section 7, below, pay Executive each month, in accordance with the
Company’s regular payroll practices an amount equal to two
twelfths (2/12) Executive’s annual Base Salary in effect as
of the effective date of termination; for a period of twelve months
after the effective date of termination; and
(C) pay Executive a pro-rata lump
sum amount, prorated for the number of full months during the
applicable fiscal year during which Executive had been employed by
the Company prior to his termination, of the bonus that would have
been payable to Executive had he remained employed throughout the
year. Such bonus will be based upon the percentage achievement
against objectives as determined by the Company’s board of
directors at the conclusion of the applicable fiscal year to have
been earned pursuant to the terms of the Company’s management
incentive plan; and
(D) provided
that, and for so long as, Executive complies with his obligations
set forth in Section 7, below, pay Executive, each month for a
period of twelve (12) months, in accordance with the
Company’s regular payroll practices, two twelfths (2/12) of
an amount obtained by multiplying Executive’s target bonus
percentage in effect as of the effective date of termination
(expressed as a decimal) times Executive’s annual Base Salary
in effect as of such date of termination.
(E)
Reimburse or otherwise pay Executive’s COBRA payments for
medical and dental insurance under the Company’s applicable
plans for the lesser of (x) twenty four months from the effective
date of termination or (y) the date upon which Executive becomes
eligible for medical coverage from a new employer. Executive shall
notify the Company no later than 15 days after becoming eligible
for such coverage.
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Anything
contained in this Section 4(g)(i) to the contrary notwithstanding,
Executive shall not be entitled to any of the benefits set forth in
this Section 4(g)(i) if Executive resigns and terminates such
employment voluntarily (other than for Good Reason) or is
terminated by the Company (including without limitation any
Acquiring Company) for Cause.
For purposes of
Sections 4(g)(i) and (ii) hereof, the term the
“Company” shall include any Acquiring Company (as
defined below) and all obligations of the Company under such
Section shall be assumed by any Acquiring Company.
(ii) Stock Options
. Subject to Section 4(i)
below, in the event Executive’s employment under this
Agreement is terminated by the Company involuntarily without Cause
at any time during the period commencing two (2) months before and
ending eighteen (18) months after the occurrence of a Change of
Control or Executive terminates his employment with the Company for
Good Reason at any time during the period commencing two (2) months
before and ending eighteen (18) months after the occurrence of a
Change of Control:
(A)
notwithstanding anything to the contrary contained in any stock
option or other equity award plan of the Company (“Equity
Incentive Plan”), any and all stock options (“Stock
Options”), stock appreciation rights (“SARs”),
restricted stock units or restricted stock (collectively
“Equity Rights”) which were granted by the Company to
Executive prior to the Term or during the Term shall immediately
accelerate and become vested and exercisable upon the date of
termination of Executive’s employment. SARs or Stock Options
granted after execution of this Agreement may be exercised during
the earlier of (1) one (1) year following the date of termination
or (2) the expiration of the term of the SAR or Stock Option, and
the Company shall take all actions necessary or advisable to give
effect to this Section 4(g)(ii)(A); and
(B) all Equity
Rights held by Executive which were granted to Executive prior to
the execution of this Agreement, including those which have been
accelerated as set forth in section 4(g)(ii)(A), above, shall be
exercisable pursuant to the terms of the agreement(s) under which
they were granted, subject to and including, without
limitation, the post termination exercise provisions set
forth in sections 4(g)(ii) of the 2002 Agreement
(“
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