printer-friendly

Sample Business Contracts

Nonstatutory Stock Option Agreement - Critical Path Inc. and William McGlashan Jr.

Sponsored Links


                               CRITICAL PATH, INC.
                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on May 8, 2002 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant are set
forth in this cover sheet, the attachment, the Company's 1998 Stock Option Plan
(the "Plan") and in the Optionee's employment agreement with the Company dated
August 1, 2001 as may be amended and in effect from time to time.

Date of Option Grant:   May 8, 2002
                     -----------------

Name of Optionee:       William McGlashan, Jr.
                 -------------------------------

Optionee's Social Security Number:
                                  ---------------

Number of Shares Covered by Option:       1,000,000
                                   ------------------

Exercise Price per Share:     $1.74
                         --------------

Vesting Start Date:     May 8, 2002
                   --------------------

      BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH IS ALSO
ENCLOSED.

Optionee:                     /s/ William McGlashan
          ______________________________________________________________________
                                   (Signature)

Company:  ______________________________________________________________________
                                   (Signature)

Title: ________________________________________


Attachment


<PAGE>

                               CRITICAL PATH, INC.
                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK        This option is not intended to be an incentive stock
OPTION                    option under section 422 of the Internal Revenue Code
                          and will be interpreted accordingly.

VESTING                   The option is immediately exercisable. The Shares
                          under this option will vest in accordance with the
                          vesting schedule indicated below:

NUMBER OF OPTIONS         VESTING EVENT

1,000,000                 Vesting in one-third of the Shares under this option
                          on the first anniversary of the Vesting Start Date
                          listed on the cover sheet to this Agreement and
                          vesting thereafter in equal quarterly installments
                          from the first anniversary of the Vesting Start Date
                          for a period of two (2) years subject to continued
                          employment with the Company during that period and all
                          other terms and conditions as described herein. Shares
                          that are not yet vested under this Agreement are
                          referred to as Restricted Shares.

                          Your option vesting will cease in the event that your
                          employment and service as a Company director both
                          terminate for any reason. Your option vesting will
                          also cease upon your voluntary resignation of
                          employment or upon a termination for Cause (as such
                          terms are defined in your employment agreement with
                          the Company).

Repurchase Right          If your employment and service as a Company director
                          both terminate for any reason, then your Shares will
                          be automatically repurchased by the Company to the
                          extent that they have not vested before the
                          termination date and do not vest as a result of the
                          termination. This means that the Restricted Shares
                          will immediately revert to the Company.  You will
                          receive a payment for Restricted Shares that are
                          repurchased equal to the price you paid per share.
                          The Company determines when your employment or service
                          terminates for purposes of computing your vested
                          Shares and the date of repurchase.



                                       1
<PAGE>
                          In the event of a Change in Control of the Company,
                          100% of your then-unvested Option Shares (meaning 100%
                          of your unvested Option Shares that are otherwise
                          scheduled to vest on each vesting date had a Change in
                          Control not occurred) shall become vested provided
                          that you are employed by the Company on the date the
                          negotiations or communications began (as determined by
                          the Board in good faith) which lead to the Change in
                          Control.

                          For purposes of this Agreement, a "Change in Control"
                          of the Company shall be defined as the occurrence of
                          any one of the following:

                             (i)   the consummation of a merger or consolidation
                                   of the Company with or into another entity or
                                   any other corporate reorganization, if more
                                   than 50% of the combined voting power of the
                                   continuing or surviving entity's securities
                                   outstanding immediately after such merger,
                                   consolidation or other reorganization is
                                   owned by persons who were not shareholders of
                                   the Company immediately prior to such merger,
                                   consolidation or other reorganization;

                             (ii)  the sale, transfer or other disposition of
                                   all or substantially all of the Company's
                                   assets;

                             (iii) the dissolution, liquidation or winding up of
                                   the Company;

                             (iv)  any transaction as a result of which any
                                   person is the "beneficial owner" (as defined
                                   in Rule 13d-3 under the Securities Exchange
                                   Act of 1934), directly or indirectly, of
                                   securities of the Company representing at
                                   least 20% of the total voting power
                                   represented by the Company's then outstanding
                                   voting securities.

                          For purposes of this section, the term "person" shall
                          have the same meaning as when used in sections 13(d)
                          and 14(d) of the Securities Exchange Act but shall
                          exclude: (A) trustee or other fiduciary holding
                          securities under an employee benefit plan of the
                          Company or a subsidiary of the Company; (B) a
                          corporation owned directly or indirectly by the
                          shareholders of the Company in substantially the same
                          proportions as their ownership of the common stock of
                          the Company; and (C) the Company.

                          A transaction shall not constitute a Change in Control
                          if its sole purpose is to change the state of the
                          Company's incorporation or to create a holding company
                          that will be owned in substantially the same
                          proportions by the persons who held the Company's
                          securities immediately before such transactions.



                                       2
<PAGE>
TERM                      Your option will expire in any event at the close of
                          business at Company headquarters on the day before the
                          10th anniversary of the Date of Grant, as shown on the
                          cover sheet. It will expire earlier if your employment
                          and your service as a Company director terminate, as
                          described in this Agreement.

REGULAR                   If your employment and your service as a Company
TERMINATION               director terminate for any reason except Cause, death
                          or Disability, then your option will expire at the
                          close of business at Company headquarters on the 90th
                          day after your termination date.

CAUSE                     If your employment or service as a Company director
                          terminates on account of Cause, then your option will
                          expire immediately and any unvested, exercised Shares
                          shall revert to the Company pursuant to its repurchase
                          right.

DEATH                     In the event of your death during the period of your
                          employment or service as a Company director, your
                          option will expire at the close of business at Company
                          headquarters on the date six months after the date of
                          death. During that six-month period, your estate or
                          heirs may exercise your option.

DISABILITY                If your employment and service as a Company director
                          terminate because of your Disability, then your option
                          will expire at the close of business at Company
                          headquarters on the date six months after your
                          termination date.

                          "Disability" means that you are unable to engage in
                          any substantial gainful activity by reason of any
                          medically determinable physical or mental impairment.

LEAVES OF ABSENCE         For purposes of this option, your employment does not
                          terminate when you go on a bona fide leave of absence,
                          that was approved by the Company in writing, if the
                          terms of the leave provide for continued service
                          crediting, or when continued service crediting is
                          required by applicable law.  Your employment
                          terminates in any event when the approved leave ends
                          if you fail or refuse to return to active service.

                          Consistent with the terms of this Agreement and your
                          Employment Agreement, the Company determines which
                          leaves count for this purpose, and when your
                          employment terminates for all purposes under the Plan.



                                       3
<PAGE>
RESTRICTIONS ON           The Company will not permit you to exercise this
EXERCISE                  option if the issuance of Shares at that time would
                          violate any law or regulation.

NOTICE OF EXERCISE        When you wish to exercise this option, you must notify
                          the Company by filing the proper "Notice of Exercise"
                          form at the address given on the form.  Your notice
                          must specify how many Shares you wish to purchase.
                          Your notice must also specify how your Shares should
                          be registered (in your name only or in your and your
                          spouse's names as community property or as joint
                          tenants with right of survivorship).  The notice will
                          be effective when received by the Company.

                          If someone else wants to exercise this option after
                          your death, that person must prove to the Company's
                          satisfaction that he or she is entitled to do so.

FORM OF PAYMENT           When you submit your notice of exercise, you must
                          include payment of the option price for the Shares you
                          are purchasing. Payment may be made in one (or a
                          combination) of the following forms:

                          - Your personal check, a cashier's check or a money
                            order.

                          - By delivery (on a form prescribed by the Committee)
                            of an irrevocable direction to a securities broker
                            to sell vested Shares and to deliver all or part of
                            the sale proceeds to the Company in payment of the
                            aggregate Exercise Price.

                          - By delivery (on a form prescribed by the Committee)
                            of your full-recourse promissory note.

WITHHOLDING TAXES         You will not be allowed to exercise this option unless
                          you make acceptable arrangements to pay any
                          withholding or other taxes that may be due as a result
                          of the option exercise or the sale of the Shares
                          acquired upon exercise of this option.

RESTRICTIONS              By signing this Agreement, you agree not to sell any
ON RESALE                 option Shares at a time when applicable laws or
                          regulations or Company or underwriter trading policies
                          prohibit a sale.

                          You represent and agree that the Shares to be acquired
                          upon exercising this option will be acquired for
                          investment, and not with a view to the sale or
                          distribution thereof.

                          In the event that the sale of Shares under the Plan is
                          not registered under the Securities Act but an
                          exemption is available which



                                       4
<PAGE>
                          requires an investment representation or other
                          representation, you shall represent and agree at the
                          time of exercise to make such representations as are
                          deemed necessary or appropriate by the Company and its
                          counsel.

                          Prior to any Change in Control of the Company, the
                          shares acquired under this option can be sold or
                          transferred only pursuant to an SEC Rule 10b5-1
                          trading plan that is pre-approved by the Board of
                          Director's Compensation Committee.

STOCK CERTIFICATES        Your Restricted Shares will be held for you by the
                          Company. After shares have vested, a stock certificate
                          for those shares will be released to you.

83(b) ELECTION            The acquisition of the Shares may result in adverse
                          tax consequences that may be avoided or mitigated by
                          filing an election under Code Section 83(b).  Such
                          election may be filed only within 30 days after the
                          date of purchase.  The form for making the
                          Section 83(b) election is attached.  YOU SHOULD
                          CONSULT WITH YOUR TAX ADVISOR TO DETERMINE THE TAX
                          CONSEQUENCES OF ACQUIRING THE SHARES AND THE
                          ADVANTAGES AND DISADVANTAGES OF FILING THE
                          Section 83(b) ELECTION.  YOU ACKNOWLEDGE THAT IT IS
                          YOUR SOLE RESPONSIBILITY TO FILE A TIMELY ELECTION
                          UNDER SECTION 83(b).

TRANSFER OF OPTION        Prior to your death, only you may exercise this
                          option. You cannot transfer or assign this option. For
                          instance, you may not sell this option or use it as
                          security for a loan. If you attempt to do any of these
                          things, this option will immediately become invalid.
                          You may, however, dispose of this option in your will.

                          Regardless of any marital property settlement
                          agreement, the Company is not obligated to honor a
                          notice of exercise from your spouse or former spouse,
                          nor is the Company obligated to recognize such
                          individual's interest in your option in any other way.

NO RETENTION RIGHTS       Your option or this Agreement does not give you the
                          right to be retained by the Company (or any
                          subsidiaries) in any capacity. The Company (and any
                          subsidiaries) reserves the right to terminate your
                          Service at any time and for any reason.

SHAREHOLDER RIGHTS        You, or your estate or heirs, have no rights as a
                          shareholder of the Company until a certificate for
                          your option Shares has been issued. No adjustments are
                          made for dividends or other rights if the applicable
                          record date occurs before your stock certificate is
                          issued, except as described in the Plan.



                                       5
<PAGE>
ADJUSTMENTS               In the event of a stock split, a stock dividend or a
                          similar change in the Company stock, the number of
                          Shares covered by this option and the exercise price
                          per share may be adjusted pursuant to the Plan. Your
                          option shall be subject to the terms of the agreement
                          of merger, liquidation or reorganization in the event
                          the Company is subject to such corporate activity,
                          except to the extent the foregoing conflict with or
                          are in any way inconsistent with Section 8 of your
                          employment agreement.

FORFEITURE                If, at any time within one year after termination of
                          employment, you engage in either of the following:
                          (i) your commission of a felony or an act constituting
                          common law fraud, in each case having a material
                          adverse effect on the business or affairs of the
                          Company or its affiliates or stockholders; or (ii)
                          your willful or intentional breach of Company
                          confidential information obligations, in each case
                          having a material adverse effect on the business or
                          affairs of the Company or its affiliates or
                          stockholders; then (1) this option shall terminate and
                          be forfeited effective the date on which you enter
                          into such activity, unless terminated or forfeited
                          sooner by operation of another term or condition of
                          this option or the Plan, (2) any stock acquired by you
                          pursuant to the exercise of this option during the
                          Forfeiture Period (as defined below) shall be
                          forfeited, and (3) any gain realized by you from the
                          sale of stock acquired through the exercise of this
                          option during the Forfeiture Period shall be paid by
                          you to the Company.  The "Forfeiture Period" shall
                          mean the period commencing six months prior to your
                          termination of employment and ending one year from
                          your termination of employment.

RIGHT OF SET OFF          By accepting this Agreement, you consent to a
                          deduction from any amounts the Company owes you from
                          time to time, to the extent of the amounts you owe the
                          Company under the paragraph above.  If the Company
                          does not recover by means of set-off the full amount
                          you owe it, calculated as set forth above, you agree
                          to pay immediately the unpaid balance to the Company
                          upon the Company's demand.

LEGENDS                   All certificates representing the Shares issued upon
                          exercise of this option shall have endorsed thereon
                          the applicable legends.

APPLICABLE LAW            This Agreement will be interpreted and enforced under
                          the laws of the State of California.



                                       6
<PAGE>
THE PLAN AND OTHER        The text of the Plan and your employment agreement are
AGREEMENTS                incorporated in this Agreement by reference. Certain
                          capitalized terms used in this Agreement are defined
                          in the Plan or your employment agreement.

                          This Agreement, the Plan and your employment agreement
                          with the Company dated August 1, 2001, as may be
                          amended and in effect from time to time, constitute
                          the entire understanding between you and the Company
                          regarding this option. Any prior agreements,
                          commitments or negotiations concerning this option are
                          superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT AND THIS AGREEMENT.



                                       7