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Separation Agreement and Release - Critical Path Inc. and Laureen DeBuono

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                           SEPARATION AGREEMENT AND RELEASE

      This Separation Agreement and Release ("Agreement") is made by and between
CRITICAL PATH, INC. (the "Company"), and LAUREEN DEBUONO ("Consultant")
(collectively referred to herein as the "Parties") as of the date last executed.

      WHEREAS, Consultant was employed by the Company as a full time consultant
with the title of Executive Vice President and Chief Executive Officer pursuant
to that certain Consulting Agreement dated as of August 16, 2001, and as amended
by an Addendum dated as of October 31, 2001 (together, the "Consulting
Agreement"); and

      WHEREAS, the Company and Consultant have each agreed as to Company's
termination of the Consulting Agreement, and this Agreement serves to terminate,
amend and replace such Consulting Agreement in its entirety.

      NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Consultant hereby agree as follows:

1. Termination. In accordance with Section 9 of the Consulting Agreement,
Company properly notified Consultant with sufficient notice of a termination of
employment on January 15, 2003 ("Effective Date"). Consultant has seven (7) days
following the execution of this Agreement to revoke the Agreement by sending a
written notice to the Company to the attention of General Counsel, Critical
Path, Inc., 350 The Embarcadero, 6th Floor, San Francisco, California
94105-1204. This Agreement shall not be effective until the revocation period
has expired, which shall be the eighth day after it is signed by Consultant,
assuming such Agreement was previously signed by the Company. Notwithstanding
the foregoing, Consultant's employment and provision of services to the Company
shall continue in his or her current position ("Transition Period") through
March 1, 2003, or for a period ending as may be amended between the parties
prior to such date ("Termination Date"). Consultant shall paid regular base
salary on the regular Company payroll schedule and continue to vest in all stock
options (see Section 3 below) on his or her regular vesting schedule and shall
accrue any other applicable employment benefits including Paid Time Off through
the Termination Date. During the Transition Period, Consultant shall provide
services in accordance with the duties and responsibilities of his or her
current position and facilitate an orderly transition of all pending work.

2. Consideration. On the Effective Date (as defined in Section 1) and in
accordance with the terms and conditions of the Consulting Agreement, the
Company agrees to pay Consultant One Hundred and Four Thousand dollars and zero
cents ($104,000.00), which equals two (2) months' fees as salary under with the
Consulting Agreement at the Consultant's current base salary ("Severance
Amount"). In addition, Consultant acknowledges receipt of Company's payment of
One Hundred and Four Thousand dollars and zero cents ($104,000.00) which equals
sixty (60) days' fees as salary at the Consultant's current base salary
("Statutory Payment") in lieu of notice of termination as required pursuant to
applicable federal and state law (together, the Severance Amount and the
Statutory Payment shall constitute the "Separation Amount"). Separation

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Amount payments will be paid less all applicable withholdings, in accordance
with the Company's standard payroll practices and Consultant's applicable tax
designations.

3. Vesting of Stock Options.

      As of the Termination Date, Consultant shall cease vesting in all such
Options previously granted to Consultant. Consultant's right to exercise the
Options shall be governed by the terms and conditions of the applicable Company
Stock Option Plans and Stock Option Agreement(s) between Consultant and the
Company, including periods after termination for the exercise of the Options,
except as expressly modified by this Agreement. Consultant confirms that he or
she has read and understood the terms and conditions of the Stock Option Plan
and his or her Stock Option Agreement and understands his or her
responsibilities contained therein, including the procedures for exercise of
stock options contained therein. Consultant understands that this Agreement
varies the expiration of such Options from that found in the applicable plan and
the right to exercise such Options shall instead expire on March 1, 2004 with no
further extension of such period being granted. Except as otherwise noted
herein, nothing in this Agreement is intended to otherwise supersede or modify
the terms and conditions of the Company's Stock Option Plans or any agreements
issued in connection with those plans. Company shall not be responsible for the
payment of any exercise price or taxes due in connection with the exercise of
such Options.

4. Benefits. Consultant acknowledges that she received no health insurance
benefits in accordance with her Consulting Agreement and therefore is in
eligible for extension of such benefits under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"). Nothing in this Agreement shall otherwise
supersede or modify the terms and conditions of the Company's benefits plans or
the application to Consultant.

5. Payment of Salary. On or before the Termination Date, the Company will pay
all earned but unpaid salary, wages, accrued Paid Time Off, mutually determined
bonuses, commissions and all other benefits due to Consultant up through the
Termination Date. Company will reimburse Consultant for all approved business
related expenses accrued through the Termination Date, to the extent that they
were incurred in accordance with the current Company travel and expense policies
and are properly submitted within ten (10) business days of the Termination
Date.

6. Release of Claims.

      a. Civil Code Section 1542. In connection with all releases effected by
this Agreement ("Release"), Consultant expressly waives any rights or benefits
under Section 1542 of the California Civil Code, or any other equivalent
statute. California Civil Code Section 1542 (or similar state statutes),
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 OF EXECUTING
      THE RELEASE, WHICH IF

<PAGE>

      KNOWN BY HIM [OR HER] MUST HAVE MATERIALLY AFFECTED HIS [OR HER]
      SETTLEMENT WITH THE DEBTOR.

Consultant fully understands that if any fact, with respect to any matter,
covered by this Release is found hereafter to be other than or different from
the facts now believed by them to be true, they expressly accept and assume that
this Release shall be and remain effective, notwithstanding such difference in
the facts.

      b. Release. Consultant agrees that the Separation Amount represents
adequate consideration for the purpose of this Release and such Separation
Amount constitutes settlement in full of all outstanding obligations owed to
Consultant by the Company, with the exception of payment of base salary and
earned but unpaid benefits through the Termination Date. Except for the promises
or obligations made or undertaken in this Agreement and in exchange for the
payments and other consideration provided hereunder, Consultant, on behalf of
himself or herself, and his or her respective heirs, family members, executors,
and assigns, hereby fully and forever releases, acquits, and discharges the
Company and its respective officers, directors, consultants, investors,
shareholders, administrators, affiliates, divisions, subsidiaries, predecessor
and successor corporations, and assigns, from, and agrees not to sue concerning,
any claim, duty, obligation or cause of action relating to any matters of any
kind, whether presently known or unknown, suspected or unsuspected, that he or
she may possess arising from any omissions, acts or facts that have occurred up
until and including the Effective Date of this Agreement including, without
limitation, any and all claims relating to or arising from Consultant's
employment relationship with the Company and the termination of that
relationship; any and all claims relating to, or arising from, Consultant's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for rights of rescission, personal tax
liabilities, fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law, and securities fraud under any state or
federal law; any and all claims for wrongful discharge of employment, wages or
other compensation, including but not limited to bonuses and commissions; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
defamation; negligence; personal injury; assault; battery; harassment; invasion
of privacy; false imprisonment; and conversion; any and all claims for violation
of any federal, state or municipal statute, including, but not limited to, the
Worker Adjustment and Retraining Notification Act of 1991, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination
in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair
Labor Standards Act, the California Fair Employment and Housing Act, and Labor
Code section 201, et seq., and all as may be amended from time to time; any and
all claims arising out of any other laws and regulations relating to employment
or employment discrimination; and any and all claims for attorneys' fees and
costs.

<PAGE>

      The Consultant agrees that the release set forth in this section shall be
and remain in effect in all respects as a complete general release as to the
matters released. The Consultant understands and agrees that this Release
extinguishes all claims by the Consultant whether known or unknown and foreseen
or unforeseen.

      c. Acknowledgment of Waiver of Claims under ADEA. To the extent
applicable, Consultant further acknowledges that he or she is waiving and
releasing any rights he or she may have under the Age Discrimination in
Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and
voluntary. Consultant and the Company agree that this waiver and release does
not apply to any rights or claims that may arise under ADEA after the Effective
Date. Consultant acknowledges that the consideration given for this waiver and
release Agreement is in addition to anything of value to which Consultant was
already entitled. To the extent the ADEA is applicable to Consultant, Consultant
further acknowledges that he or she has been advised by this writing, as
required by the ADEA, that (a) he or she has the right to and should consult
with an attorney prior to executing this Agreement (although he or she may
execute this Agreement voluntarily earlier); (b) he or she has at least
forty-five (45) days within which to consider this Agreement; (c) Consultant has
been advised that a roster of all individuals affected by the current reduction
in force plan of the Company is immediately available to Consultant upon request
from the Human Resources department; (d) he or she has seven (7) days following
the execution of this Agreement to revoke the Agreement by sending a written
notice to the Company to the attention of General Counsel, Critical Path, Inc.,
350 The Embarcadero, 6th Floor, San Francisco, California 94105-1204; and (e)
this Agreement shall not be fully effective until the revocation period has
expired, which shall be the eighth day after it is signed by Consultant,
assuming such Agreement was previously signed by the Company.

7. Confidentiality. The terms of this Agreement are highly confidential and the
Parties hereto each agree to use their best efforts to maintain in confidence
the existence of this Agreement, the contents and terms of this Agreement, and
the consideration for this Agreement (hereinafter collectively referred to as
"Settlement Information"). Each Party hereto agrees to take every reasonable
precaution to prevent disclosure of any Settlement Information to third parties,
and each agrees that there will be no publicity, directly or indirectly,
concerning any Settlement Information, except where such disclosure is required
by law. The Parties hereto agree to take every precaution to disclose Settlement
Information only to those employees, officers, directors, attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Settlement Information.

8. Proprietary Information and Inventions Agreement and/or Non-Disclosure
Agreement. Consultant acknowledges and is reminded of, and affirms his or her
agreement to abide by the terms and conditions of a previously executed
Proprietary Information and Inventions Agreement and/or a Non-Disclosure
Agreement (together the "Confidentiality Agreement") between the Parties.
Consultant further agrees and understands that he or she may not disclose to any
person or entity any confidential information in violation of the
Confidentiality Agreement, whether directly or indirectly,

<PAGE>

or use or misuse such information in any way. Consultant shall promptly return
all the Company property and confidential and proprietary information in his or
her possession to the Company on or before the Termination Date. A copy of this
Confidentiality Agreement shall be made available to Consultant upon request.

9. Cooperation. Consultant agrees to cooperate with Company in investigating,
preparing or testifying on any threatened or pending claims, actions,
proceedings, whether investigative, administrative, civil or criminal, involving
or affecting the Company or any of its subsidiaries or predecessor companies or
affiliates. Consultant's reasonable, pre-approved out-of-pocket expenses
associated with any such assistance shall be reimbursed in connection with these
activities.

10. No Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of all claims. No action taken
by the Parties hereto, or either of them, either previously or in connection
with this Agreement shall be deemed or construed to be (a) an admission of the
truth or falsity of any claims heretofore made or (b) an acknowledgment or
admission by either party of any fault or liability whatsoever to the other
party or to any third party.

11. Arbitration. The Parties agree that any and all future disputes or claims
arising out of the terms of this Agreement, their interpretation, its breach,
and any of the matters herein released, shall be subject to binding arbitration
in San Francisco County, California, before the American Arbitration Association
under its Employment Dispute Resolution Rules, or by a judge to be mutually
agreed upon. In addition to arbitration, the Company is entitled to enforce the
terms of this Agreement by seeking injunctive relief in any court of competent
jurisdiction. The Parties agree that the prevailing party in any arbitration
shall be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. The Parties agree that the prevailing party in
any arbitration or claim for injunctive relief shall be awarded its reasonable
attorney's fees and costs.

12. Non-Disparagement. Each party agrees to refrain from any disparagement,
defamation, libel or slander of the other, or tortious interference with the
contracts and relationships of the other. Consultant agrees that he or she will
refrain from disparaging the Company's business and any and all of its past or
present officers, director or other employees.

13. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Consultant
represents and warrants that he or she has the capacity to act on his or her own
behalf and on behalf of all who might claim through him or her to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents
that there are no liens, or claims of lien, or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

<PAGE>

14. No Representations. Neither party has relied upon any representations or
statements made by the other party hereto which are not specifically set forth
in this Agreement.

15. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision. Such
provision shall be modified by the court so as to be rendered enforceable
insofar as possible consistent with the intent of the Parties to all remaining
portions of the Agreement.

16. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Consultant concerning Consultant's
employment with and separation from the Company, and supersedes and replaces any
and all prior agreements and understandings, including but not limited to the
Consulting Agreement, whether oral or written, concerning Consultant's
relationship with the Company and his or her compensation by the Company, except
for the Confidentiality Agreement (as defined herein). Parole evidence shall be
inadmissible to show agreement by and between the Parties as to any term or
condition contrary to or in addition to the terms and conditions hereof. Any and
all such prior agreements and understandings with respect to the subject matter
herein, including agreements for compensation, including bonuses and
commissions, are also hereby terminated and of no further force and effect, and
Consultant hereby expressly disclaims any and all rights in connection with any
previous agreements, if any, whether oral or written.

17. No Oral Modification. This Agreement may only be amended in writing signed
by Consultant and the Chief Executive Officer of the Company.

18. Governing Law. This Agreement shall be governed by the laws of the State of
California. Both Parties submit to jurisdiction in California and further agree
that any cause of action arising under this Agreement shall be brought before an
arbitrator in a court in San Francisco County, California.

19. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

20. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. Consultant acknowledges
that: (a) he or she has read this Agreement; (b) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
his or her own choice or that he or she has voluntarily declined to seek such
counsel; (c) understands the terms and consequences of this Agreement and of the
releases it contains; (d) is fully aware of the legal and binding effect of this
Agreement.

<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.


Dated: January 15, 2003    By    /s/  William McGlashan
                             ---------------------------------------------
                             Name: William McGlashan, Jr.
                                   Chief Executive Officer


Dated: January 15, 2003    By    /s/ Laureen DeBuono
                             --------------------------------------------
                                     Laureen DeBuono